- March 12, 2026
Form 1098-C compliance is essential for IRS compliance in the evolving world of charitable giving. When nonprofit organizations accept vehicle donations, such as a car, boat, or airplane, valued at more than $500, they must file Form 1098-C, which directly affects their tax deduction. The 30-day furnishing requirement, accurate VIN reporting, and proper documentation of gross proceeds when the vehicle is sold are subject to strict reporting rules imposed by the IRS.
Incorrect filings, unnecessary administrative burdens, and IRS penalties may result from missing the Form 1098-C deadline for submitting incorrect information. Nonprofits need to understand whether e-filing is required, when and how to file Form 1098-C appropriately. Every little detail matters, from the IRS submission requirements to recipient copy deadlines. This guide provides more details on Form 1098-C filing requirements for 2026, key deadlines, mistakes to avoid, and how to file easily with Tax2efile for fast, secure, and compliant filing.
Table of Contents
What is Form 1098-C?
Form 1098-C, contributions of motor vehicles, boats, and airplanes, which is filled out by charities and provide information about the donated vehicles valued at more than $500, is received. It is used to report the donation details to the IRS to identify the amount of your charitable contribution deduction, and the contributor receives the written acknowledgement required to claim a tax deduction.
Who Must File Form 1098-C?
Form 1098-C must be filed by an organization that receives a motor vehicle, boat, or airplane with a value more than $500 as donation. This includes charitable organizations, nonprofit and tax-exempt organizations, religious, educational, and community organizations, and any beneficiary organizations that transfer, sell, or makes significant use of the property donated.
When is Form 1098-C Required?
The IRS rule takes in effect when the donated vehicle is claimed within 30 days from the date of sale (sold without significant use) or date of contribution (charity uses the vehicle) with a value of more than $500. Unless the charity makes “significant intervening use “of the vehicle, the donor can only deduct the gross revenues from the sale, reported typically in Box 4C.
If the vehicle sold is less than $500, the donor’s deduction is limited to the lower of the fair market value or $500.
**Important: Donor’s ability to claim deduction can affect, when missing the 30-day window.
Information Required to Complete Form 1098-C
Before filing Form 1098-C, gather the required information.
- Donee’s name, address, contact details, and Taxpayer Identification Number (TIN)
- Donor’s name, address, contact details, and TIN
- Date of Contribution
- 17-digit Vehicle Identification Number (VIN) for cars, Hull ID for boats, or Aircraft ID.
- Sale or donation-related information
- Value and description of goods and services provided in exchange of vehicle.
Step-by-Step Procedure to File Form 1098-C
- Ensure that the vehicle qualifies and exceeds $500 and obtain Form 1098-C from the charity by January 31.
- Complete Form 1098-C sections with donor info (Box 1), vehicle description (Box 2 & 3) (year, make, model, and VIN), fill the donated date, and certify how the vehicle will be used (Box 4 or 5).
- Provide Copy B to the donor within 30 days of sale. When you e-file using an IRS-authorized platform like Tax2efile, the donor copy is sent immediately.
- Attach Copy B of Form 1098-C to Form 8453, U.S. Individual Income Tax Transmittal for an IRS e-file Return, and mail the forms to the IRS; or include Copy B of Form 1098-C as a PDF attachment if your software application allows it.
- Non-charitable contributions are required to file Form 8283, if your donation exceeds $500.
Mistakes, Deadlines, Time Extension, and Penalties of Form 1098-C
Mistakes
- Mismatching the gross revenues from the sale of donated property rather than the fair market value, when submitted.
- Missing or incorrect donor’s name, address, and TIN.
- Filing after the 30-day deadline.
- Incorrect VIN
- Failure to file Form 8283
Penalties
- Section 6720 imposes penalties for late filing, incorrect information, and failure to furnish statements to donors to the IRS.
- For vehicles sold (box 4a): penalty is the larger of gross proceeds or sales price × 39.6%
- For vehicles kept (box 5a/5b): penalty is the larger of $5,000 or claimed value × 39.6%
Time Extension
- File Form 8809 to request an automatic 30-day extension to submit your form to the IRS.
- To provide recipient copies of Form 1098-C, file Form 15397 to request a one-time 30-day extension to submit recipient copies.
Deadlines
- Recipient Copy: Must be sent within 30 days of the sale or contribution date.
- Paper Filing with the IRS: March 2, 2026
- E-filing with the IRS: March 31, 2026
Note: If the due date falls on the weekend or a federal holiday, it is extended to the next business day.
Form 1098-C filing is more than just a regular compliance activity and a crucial step in maintaining transparency, safeguarding donor trust, and make sure your organization complies with the IRS reporting requirements. Nonprofits can prevent expensive mistakes and administrative burden by being aware of the rules, adhering to the 30-day providing deadlines, and closely checking facts like VINs, donor information, and gross earnings. Using a reliable e-filing platform like Tax2efile helps organizations by guiding step-by-step filing, built-in error checks, instant IRS submission, bulk upload options for nonprofits, and secure data handling, which helps to stay worry-free and compliance.
FAQs
What is the difference between Form 1098-C and other 1098 forms?
Form 1098-C specifically reports charitable vehicle donations, whereas other 1098 forms report different types of transactions like mortgage interest (Form 1098) or tuition payments (Form 1098-T).
If a donor thinks a classic or a unique car is valued more than the charity’s final sale price, how should they manage the valuation process?
Special Guidelines for Fair Market Value: If you believe the value of a classic vehicle exceeds the charity’s sale price, you might need an independent appraisal. If your deduction exceeds certain thresholds, the IRS may require additional documentation and approval.
Are there any exceptions to filing Form 1098-C?
Yes, exceptions apply only if: the donated vehicle is valued at $500 or less, the donor receives no deduction, and if the donated property is not a motor vehicle, boat, or airplane.
Who is required to file Form 15397?
Any issuer or transmitter who cannot provide recipient statements by the original due date should file Form 15397. This includes employers, businesses, payroll providers, financial institutions, and tax professionals responsible for issuing forms like 1098s, W-2s, or 1099s. Filing the form helps avoid late furnishing penalties when additional time is needed.
Does Form 15397 extend the IRS filing deadline?
No. Form 15397 does not extend the deadline to file information returns with the IRS. It only extends the deadline to furnish copies to recipients. To request an extension for filing returns with the IRS, you must use Form 8809. This distinction is critical to remain IRS compliant and avoid penalties.
Do nonprofits need to file Form 1098-C with the IRS?
Yes. In addition to furnishing the form to the donor, charitable organizations must file Form 1098-C with the IRS to report the vehicle donation and certify how the donated property was handled.