Background

Car donation scams have become more and more prevalent in the US over the last 10 years.

In the early 1990s, Americans found a new use for their older cars that has become increasingly popular—raising money for good causes by donating the cars to charity. The idea behind car donation programs is simple: used car donations become a giving alternative that result in a handsome income tax write-off for the donor, while also providing a simple way for both individuals and businesses to dispose of unwanted vehicles.

 Federal tax law allows people to deduct the “fair market value” of a car that is donated to charity.  The problem is that there is no conclusive way to tell what the fair market value is as auto Blue Books are just the starting point for determining value. The Internal Revenue Service (IRS) says that the full Blue Book price should only be deducted when the vehicle is in perfect condition and has low mileage.

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