Congressman Ted Deutch has signed on as a cosponsor of H.R. 860, an amendment to the Internal Revenue Code that promotes charitable donations of qualified vehicles. Six years ago, Congress enacted changes in the tax code related to charitable donation of vehicles.  While those changes were focused on addressing abuses within the system, they inadvertently created a serious new problem causing car donations to plummet and thousands of charities to reduce services across the country. Until 2005, a taxpayer could deduct the fair-market value of vehicles donated to charity if that amount was less than $5,000.  Otherwise, an appraisal was required.  Unfortunately, some taxpayers were gaming the system and IRS oversight was insufficient to detect or police these abuses.  In response, Congress limited deductions for vehicles worth over $500 to the amount for which the charity resold the donated vehicle, regardless of appraised value. For potential donors, this created uncertainty and confusion.  To donate a vehicle in good condition, a donor had to hand over his or her car, keys, and title without any idea – for weeks or even months – how much it may eventually sell for or how it might affect his or her tax liability. In the first year after the law changed, the IRS reported a 67 percent decline in the number of vehicles donated to charities and an 80 percent decline in their value.  This contradicted reassurances during the 2004 debate that the changes would not adversely affect charitable revenues. HR 860 would allow tax deductions based on fair market value up to $2,500 and require an appraisal over that threshold, while preserving all of the necessary tracking and enforcement safeguards enacted in 2004.  This would protect against abuse without scaring away donations altogether. You can read H.R. 860 here.