Atomic carbon, a reactive intermediate abundant in the interstellar medium (ISM) can participate in various energetically demanding reactions in its extremely long living (69 min) first excited singlet state (D-1). Several studies on reactions of oxygen containing species with carbon atoms have been reported, however mechanistic details of the title reaction remain obscure. We report here quantum chemical studies on reactions of methanol with P-3 and D-1 carbon atoms at the CCSD(T)/cc-pVTZ level of theory, with which experimentally well known facile CO production, intermolecular acetaldehyde formation, and intermolecular dimethoxymethane production mechanisms are explained. Energetics of the fragmentation, O-H insertion, C-H insertion, and O-C insertion channels on the triplet and singlet surfaces are studied. The CO production mechanism by C (D-1) is identified as an oxygen abstraction and a triplet PES seems non-operative. Presenting novel features for the intermolecular reaction channels, current findings may be applicable to C + ROR reactions.