FREDERICK, Md. -

Congress has proposed a bill that could encourage more vehicle donations to charities, and the National Auto Auction Association is urging its members to voice their support.

About seven years ago, Congress changed the donation law, which ultimately discouraged the number of donations. After this change, donations plummeted 67 percent, according to the IRS.  Donators had to wait until a vehicle was auctioned, and then they could only get the auction price as a write-off on their taxes.  

Now, if passed, H.R. 860 — also known as the “Promoting Charitable Donations of Qualified Vehicles Act of 2011” — would allow donators to take as high as $2,500 in fair market value as a tax deduction when then they offer vehicles to charity.

If the donation amount comes in above $2,500, then the donator or charity has the option of getting an appraisal on their vehicle.

“The current law does not allow for a tax deduction until a vehicle is auctioned and then only for the auction sale price,” the association stressed.

“This bill would maintain IRS reporting requirements for both taxpayers and charities without scaring away donors,” officials added.

NAAA is asking members to take the letter from this link and send it to their respective Congressperson and call for their support.