NEW YORK (CNN/Money) - Uncle Sam may begin playing repo man when it comes to Americans donating their old cars to charity.
The Treasury Department said Tuesday it will include a series of provisions aimed at closing tax loopholes in the 2005 budget, including a plan to impose additional appraisal requirements and deduction limits for car donations. Treasury said the proposal, which also includes a clamp down on deductions for patents and intellectual property, would generate $4.7 billion in revenue over a 10-year period.
"The laws must ensure that those who would shirk their civic responsibilities cannot do so by exploiting unintended loopholes, and the IRS must ensure that taxpayers do not engage in abusive tax avoidance transactions," said Treasury Secretary John Snow in a statement.
In a report from the General Accounting Office, about 16 percent of the tax returns filed in 2000 claimed deductions for donated vehicles. That amounted to $654 million the government didn't receive because of the deductions.
In addition, the GAO found charities received less than 5 percent of the value donors claimed on their tax returns due to costs from preparing and reselling vehicles.
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