Individual Criticizes Interim Guidance on Charitable Donations of Vehicles

From: Stinson, Randall K [ Randall.K.Stinson@boeing.com ]

2. It is extremely unfair to taxpayers, a penalty and a burden on them, to change the tax laws in the middle of the year, provide no mass public notice and then make the law retroactive to the beginning of the year. I obtained a current copy of publication 526 from your website before actually donating my auto to charity. In it, it prescribed the (then) current guidelines for my contribution and my claim. There was no public notice on your website about this new change at the time. I did not find out about this change until it was broadcast on the NBC Today Show after Thanksgiving! And then it was my wife who caught the show and told me about it. I would STILL not know about it were it not for that, and I would still be using publication 526 as my guide! We donate a lot of cash and non-cash items to charities every year. My bottom line in this is that these kinds of changes should be made public before they become effective, and should get the largest public dissemination possible! Making laws like this retroactive is nothing short of punitive!

3. You invited comments as to the FMV guidance for claims. According to Kelly Blue Book my auto was worth $1300 if used for dealer trade in value. The private party sale value was $2705 and the retail sale value (the resell by the dealer) is listed at $4185. In my estimation, for tax purposes the FMV should be set somewhere between dealer trade in and private party sale, which would be most fair. However, I do understand that it is problematic that the charitable organization only makes "x" amount of dollars on the auction and that people claiming FMV in their donations causes a void between what is claimed and what is actually donated. It is quite understandable, yet the "act of charity" versus the value of the donation should be be taken into account when itemizing deductions. Were it that our property was sold at a loss, we could claim a capital loss on our taxes for deduction purposes, so where is this any different? My auto sold at auction for drastically lower than I thought it would and will be claiming $500 on my tax forms this year, much much lower than the lowest FMV I could have used ($1300). But then again, who ever said tax laws were supposed to be fair?

You invited comments and these are mine. I do not like these tax laws, the breaks always go to the poor and to the extremely wealthy, and all others are at your mercy, but as usual, I will always be true to the spirit of the law. Thank you at least for your invitation.