SEC. 884. DONATIONS OF MOTOR VEHICLES, BOATS, AND AIRPLANES.
(a) IN GENERAL.‹Subsection (f) of section 170 (relating to disallowance of deduction in certain cases and special rules), as amended by this Act, is amended by inserting after paragraph (11) the following new paragraph:
(12) CONTRIBUTIONS OF USED MOTOR VEHICLES, BOATS, AND AIRPLANES.‹
(A) IN GENERAL.‹In the case of a contribution of a qualified vehicle the claimed value of which exceeds $500
(i) paragraph (8) shall not apply and no deduction shall be allowed under subsection (a) for such contribution unless the taxpayer substantiates the contribution by a contemporaneous written acknowledgement of the contribution by the donee organization that meets the requirements of subparagraph (B) and includes the acknowledgement with the taxpayer¹s return of tax which includes the deduction, and
(ii) if the organization sells the vehicle without any significant intervening use or material improvement of such vehicle by the organization, the amount of the deduction allowed under subsection (a) shall not exceed the gross proceeds received from such sale.
(B) CONTENT OF ACKNOWLEDGEMENT.‹ An acknowledgement meets the requirements of this subparagraph if it includes the following information:
(i) The name and taxpayer identification number of the donor.
(ii) The vehicle identification number or similar number.
(iii) In the case of a qualified vehicle to which subparagraph (A)(ii) applies
(I) a certification that the vehicle was sold in an arm¹s length transaction between unrelated parties,
(II) the gross proceeds from the sale, and
(III) a statement that the deductible amount may not exceed the amount of such gross proceeds.
(iv) In the case of a qualified vehicle to which subparagraph (A)(ii) does not apply
(I) a certification of the intended use or material improvement of the vehicle and the intended duration of such use, and
(II) a certification that the vehicle would not be transferred in exchange for money, other property, or services before completion of such use or improvement.
(C) CONTEMPORANEOUS.‹For purposes of subparagraph (A), an acknowledgement shall be considered to be contemporaneous if the donee organization provides it within 30 days of
(i) the sale of the qualified vehicle, or
(ii) in the case of an acknowledgement including a certification described in subparagraph (B)(iv), the contribution of the qualified vehicle.
(D) INFORMATION TO SECRETARY.‹A donee organization required to provide an acknowledgement under this paragraph shall provide to the Secretary the i nformation contained in the acknowledgement. Such information shall be provided at such time and in such manner as the Secretary may prescribe.
(E) QUALIFIED VEHICLE.‹For purposes of this paragraph, the term Œqualified vehicle¹ means any
(i) motor vehicle manufactured primarily for use on public streets, roads, and highways,
(ii) boat, or
(iii) airplane. Such term shall not include any property which is described in section 1221(a)(1).
(F) REGULATIONS OR OTHER GUIDANCE.‹The Secretary shall prescribe such regulations or other guidance as may be necessary to carry out the purposes of this paragraph. The Secretary may prescribe regulations or o ther guidance which exempts sales by the donee organization which are in direct furtherance of such organization¹s charitable purpose from the requirements of subparagraphs (A)(ii) a nd (B)(iv)(II).
(b) PENALTY FOR FRAUDULENT ACKNOWLEDGMENTS.
(1) IN GENERAL.‹Part I of subchapter B of chapter 68 (relating to assessable penalties), as amended by this Act, is amended by inserting after section 6719 the following new section:
SEC. 6720. FRAUDULENT ACKNOWLEDGMENTS WITH RESPECT TO DONATIONS OF MOTOR VEHICLES, BOATS, AND AIRPLANES. Any donee organization required under section 170(f)(12)(A) to furnish a contemporaneous written acknowledgment to a donor which knowingly furnishes a false or fraudulent acknowledgment, or which knowingly fails to furnish such acknowledgment in the manner, at the time, and showing the information required under section 170(f)(12), or regulations prescribed thereunder, shall for each such act, or for each such failure, be subject to a penalty equal to
(1) in the case of an acknowledgment with respect to a qualified vehicle to which section 1 170(f)(12)(A)(ii) applies, the greater of
(A) the product of the highest rate of tax s pecified in section 1 and the sales price stated o n the acknowledgment, or (B) the gross proceeds from the sale of such vehicle, and
(2) in the case of an acknowledgment with respect to any other qualified vehicle to which section 2 170(f)(12) applies, the greater of
(A) the product of the highest rate of tax specified in section 1 and the claimed value of the vehicle, or
(2) CONFORMING AMENDMENT.‹The table of sections for part I of subchapter B of chapter 68, as amended by this Act, is amended by adding at the end the following new item: Sec. 6720. Fraudulent acknowledgments with respect to donations of motor vehicles, boats, and airplanes..
(c) EFFECTIVE DATE.‹The amendments made by this section shall apply to contributions made after December 31, 2004.