The 18 Month "free ticket"

Car donation scam artists are know to take advantage of the slow operation of state law.

In many states, such as California, virtually anyone can create a charity and offer tax breaks for vehicles without government scrutiny for 18 months and often longer. Even then, authorities rely on an honor system and rarely audit charities.

The problems are further compounded by the practice of reselling unsafe donated vehicles without recourse to buyers, because charities are exempt from the regulations policing car dealers. The IRS says that the rampant fraud from some of these programs is potentially costing the US Treasury hundreds of millions of dollars per year.

Yet the IRS does not flag donors for audit—even though the agency presumes donors routinely inflate the value of their donated vehicles.

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