If you want to get a tax deduction for your car donation to a charity, the IRS says that charity must be a section 501(c)(3) organization. To confirm that the charity is indeed 501(c)(3), you’ll need to confirm that it is listed in IRS Publication 78, Cumulative List of Organizations.
Publication 78 is updated annually. Please note that religious organizations like monasteries, churches, synagogues, and mosques and not required to have 501(c)(3) classification to receive donated vehicles, and so may not be listed in Publication 78. You can download Publication 78 as a pdf document (you’ll need the free computer program Abode Reader to read the file), or you can now search Publication 78 online from the IRS website.
Having the address of the organization you are investigating is helpful. There are thousands of charities across the United States that are qualified to take donated cars, so many of the names sound similar. Having an address to verify you’ve got the right charity is a good idea.
If you have are not sure if the charity or religious organization you want to donate your car to is qualified, just call IRS Customer Account Services toll-free at 844-939-0838. That number is put you indirectly to the division for Tax Exempt and Government Entities and give you access to an IRS agent who is an expert and an authority about whether the charity is qualified to accept the car and have you still get a tax deduction.
Keep in mind that just because the charity is qualified, does not necessarily mean you are qualified to get the tax deduction. For more information, see our article on car donation tax deduction.
Where to Donate Your Car
There are a number of large organizations that are set up to accept cars across the United States and then give the cars to pre-screened charities. This way is easier, as you do not have to check the 501(c)(3) status of the charity first, and you usually can just call and have your car picked up free of charge within 48 hours.
The trouble is that some of these car donation companies end up giving barely 10% of your car’s value to the charity. What happens instead is that the company tows your car away, gives you cursory documentation for a tax deduction, and then sells your car at an auction. After the company has paid for the towing, and taken their cut (they spend huge amounts of money on advertising), they send a token check to a charity.
Because these semi-shady companies can look so much like the competitors (companies that give a much larger portion of your donation to the charity), we thought we’d review a few of the best options, so you can get to know them before you make your final decision on where to donate your car. Of course, it is still best to donate the car directly to the charity of your choice and to bring the car to them (towing is expensive, and some junk cars are barely valuable enough to cover the towing charges).
Kars 4 Kids Review (http://www.kars4kids.org)
Donation Charities Center Review (http://www.donateacar.com)
1-800 Charity Cars (http://www.800charitycars.org)
Donate a Car 2 Charity (http://www.donateacar2charity.com)