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Auto Donations Plummeted After IRS Rules Rewritten
June 19, 2008

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Rules barring taxpayers from deducting the fair-market value of automobiles donated to charity led to a 67 percent decline in such gifts between 2005 and 2006, the Chronicle of Philanthropy reported June 12.

A report from the Internal Revenue Service (IRS) found that vehicle donations plunged from about 900,000 in 2004 to 297,000 in 2005, the year the new law took effect. Under the new IRS rules, donors are only allowed to deduct the amount of money the charity received for selling the car.

The IRS also reported that deductions claimed by donors fell from $2.4 billion in 2004 to $470 million in 2005.