Does giving you car to charity cause a red flag at the IRS?

Well, only to the degree that there is a recent (last year or two) change and the procedure to get a dedcution for doing so now is exacting and needs to be followed. Only qualified charities actually have the ability to provide you all of what you need. If it's done correctly, it isn't a problem. In the case of a contribution of a “qualified vehicle” (defined below), generally an auto, boat, or airplane (other than inventory), the claimed value of which exceeds $500, no deduction is allowed unless the taxpayer (1) substantiates the contribution by a contemporaneous written acknowledgement from the donee organization containing specified information and certification(s) and (2) includes the acknowledgement with the tax return on which the deduction is claimed. For the deduction limit for contributions of qualified vehicles. Code Sec. 170(f)(12)(A)(i) . The content and timing of the acknowledgement depend on whether the donee organization: ... sold the vehicle without significant intervening use or material improvement. ... didn't sell the vehicle before significant intervening use or material improvement, ; or ... sold the vehicle below fair market value (or gratuitously transferred it) to needy individuals in furtherance of the donee's charitable purpose. A donee organization may provide the acknowledgment to a donor in any reasonable manner. Copies B and C of Form 1098-C may be used for this purpose. If the claimed value of the vehicle is at least $250 but not more than $500, the substantiation requirements for charitable contributions of $250 or more apply. A qualified appraisal is generally required for charitable contributions of property valued at more than $5,000. However, qualified vehicles that are sold without significant intervening use or material improvement are exempted from that requirement if the required acknowledgement is provided. Charities often hire third parties to run their vehicle donation programs. IRS has approved a charity's use of a third-party agent to solicit donations of used cars, sell the cars, transfer the sales proceeds to the charity (less the agent's fee), and provide the required written acknowledgement of the donation. Since many charitable donations are made near the end of the year, it may not be possible for a taxpayer to claim a charitable deduction for a donated vehicle on a return filed by the original due date.