Vehicle Donations: Benefits to Charities and Donors, but Limited Program Oversight

GAO-04-73 Published: Nov 14, 2003. Publicly Released: Dec 12, 2003.

Highlights

Donating a vehicle to charity enables a donor to support a charitable cause, dispose of an unwanted vehicle, and receive a tax benefit. More charities are turning to vehicle donation programs as a means for raising funds. As a result, our objectives were to: (1) determine the number of charities with vehicle donation programs, and the number of taxpayers claiming deductions for vehicle donations; (2) compare the proceeds received by charities from vehicle donations to what donors claimed for those deductions; and (3) describe related Internal Revenue Service (IRS) and state compliance activities.

Recommendations

Recommendations for Executive Action

Agency Affected	Recommendation	Status
Internal Revenue Service	In conjunction with IRS's ongoing National Research Program study, which is to be completed in December 2004, the Commissioner of the Internal Revenue should assess (1) whether the Ogden compliance program should be modified to take advantage of the leads generated by the program and (2) the feasibility and usefulness of maintaining and recording the receipt of Form 8282 as recommended by IRS's donated property task force.	Closed – Implemented In November 2006, IRS began screening substantial deductions claimed by individuals and per partner or shareholder. Returns with a known value discrepancy between what the taxpayer deducted and what the charity received are referred to the field. Providing high value leads to field offices is in line with the spirit of the recommendation. IRS completed the second part of the recommendation by May 2006. Starting with forms received in 2005, IRS is transcribing Forms 8282 and maintaining the transcribed forms in a searchable database.