According to the attorney general’s office, Los Angeles-based People’s Choice Charities claimed that 100 percent of the net proceeds from the sale of donated cars would go to the donors’ chosen charities, but 97 percent of the donations were spent on administrative costs, such as towing and car repairs, and advertising. An audit conducted by the attorney general’s office found that from 2007 to 2012, People’s Choice Charities reported it had donated more than $700,000 to other nonprofits, while actually only donating $174,000.

The lawsuit claimed People’s Choice Charities also developed a “cash back” program whereby vehicle donors could receive money in return for their “donation,” effectively transforming a charitable organization into an unlicensed used car dealership in violation of state law.

Similarly, attorneys said Ventura-based Cars 4 Causes used 87 percent of its donations to pay for items such as advertising and administrative costs, including staff salaries, while only 13 percent was directed to actual charities. From 2009-2014, the organization reported that $15.9 million was donated to charity, but in reality, it only gave $5.4 million to charity, attorneys said.

Meanwhile, Cars 4 Causes turned down many requests from individuals in need seeking a car, including single mothers, college students, and seniors, all while paying thousands towards staff salaries and millions to advertisers, the lawsuit said.
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If you want to Donate your car for tax credit is a precise and unique way to quickly get rid of your car with a good purpose. Donating a car to charity can be a great way to get a tax deduction. All you need to do is called charity that willing to accept your old vehicle and towing it away. However, doing a little planning will ensure that you can maximize your tax savings from donations. Remember, the tax deduction for your car donation is limited to the sales price not the dealer price.

Use the sales price for charity as the amount of your tax deduction. If you want to claim the fair market value for donate car for tax credit, you must specify the deduction. For example, if the charity sells the car at auction for $ 2500, your deduction is limited to $ 2,500, even if the fair market value is $ 3,500. However, if the charity sells the car at a discount for those who in need or save the car for internal purposes, then you can claim a tax deduction for the fair market value.

To determine this, you can use the reputable used car prices guide to calculate your deduction using the current fair market value. However you need to ensure that the selling price listed is for the same vehicle with yours, so make sure you check out the model and year, and whether it sold under the same conditions and had similar accessories to your vehicle.

City council campaign organization or clubs may be nonprofit, but donating a car for them would not provide tax benefits for you. In addition, you cannot give a car donation to an individual, no matter how poor they are. For example, giving your used car to a poor single mother cannot be put into a charitable donation unless you donate a car to the temple and they give it, because of their own decisions, to that single mother, then you can claim a deduction taxes. Only use quality charities that can provide such benefits, including religious organizations, educational institutions, and nonprofit hospitals.