Tax Credit Fail

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JasonF

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#1
I'm disappointed annoyed to report that even though I purchased my Model 3 in July of 2018, the IRS has denied my EV credit, and ordered me to re-pay the full amount ($7500) to them immediately with penalties. They said that I didn't produce sufficient evidence that the Model 3 qualifies for the EV credit.

I don't want anyone to try and give me legal advice because that would probably get this board in trouble. I would, however, like to know if anyone else experienced this, and what you did about it. Is this a widespread issue?
 

SoFlaModel3

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#2
I used TurboTax and just completed the required form — no issues at all. I even had 2 on the same return for $15,000.
 

Bigriver

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#3
From my experience an IRS notice can seem more threatening than it is. I once had a typo or something mis-entered on one line, and they recalculate everything per their perception of the truth. So if there was a typo or something not filled in how they wanted it, it’s easy for them to recalculate everything for you minus the $7500, plus penalties and interest at this time. I think it should be relatively easy to clear up, as the model 3 purchased anytime in 2018 clearly qualifies.
 

MelindaV

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#5
I am still waiting for my refund after the return was initially kicked into the audit pile. In July (or maybe it was August), I got the request to provide additional information - sent the purchase agreement and window sticker and waiting now to hear back.
 

FRC

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#6
If we can assume that your total tax was more than $7500, then either you made a clerical error in your return, or the IRS has misinterpreted your information. The IRS regularly makes mistakes, but in this instance my money is on taxpayer error(wrong form, wrong line, wrong source info). As an ex-CPA, I would never consul a taxpayer to handle any issue directly with the IRS(you can never be sure what critical information you may innocently divulge). I would take my return, my source documents(including your MVPA), and the IRS notice to a CPA or trusted tax service. Don't panic, this is likely easily remedied.
 
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SPIKE's M3AWD

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#7
Here are a few reasons you would not qualify for the $7,500 EV tax credit:
1. You leased the vehicle
2. The vehicle is pre-owned
3. Your tax liability is less than $7500
 

M3OC Rules

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#8

SPIKE's M3AWD

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#9

JasonF

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#10
I am still waiting for my refund after the return was initially kicked into the audit pile. In July (or maybe it was August), I got the request to provide additional information - sent the purchase agreement and window sticker and waiting now to hear back.
That's the stage I was in right before I got the notice that the Tesla purchase agreement isn't sufficient proof, and my credit has been denied. Part of why I asked here, I thought maybe I was supposed to get some additional form or documentation from Tesla that I didn't know about to use as proof.
 

M3OC Rules

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#11
I am still waiting for my refund after the return was initially kicked into the audit pile. In July (or maybe it was August), I got the request to provide additional information - sent the purchase agreement and window sticker and waiting now to hear back.
Perhaps you should have sent in your 9600 posts on this forum.
 

Needsdecaf

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#12
That's the stage I was in right before I got the notice that the Tesla purchase agreement isn't sufficient proof, and my credit has been denied. Part of why I asked here, I thought maybe I was supposed to get some additional form or documentation from Tesla that I didn't know about to use as proof.
LOL, what would constitute sufficient proof then? A note from Elon?

Seriously, that's ridiculous. Don't panic, just get in touch with them however they asked you to and politely ask them what you need to provide in order to satisfy the terms of the credit.

I"m assuming that none of these terms posted above qualify in your case?

Here are a few reasons you would not qualify for the $7,500 EV tax credit:
1. You leased the vehicle
2. The vehicle is pre-owned
3. Your tax liability is less than $7500
I used TurboTax and just completed the required form — no issues at all. I even had 2 on the same return for $15,000.
Same here. No one even asked to see my purchase agreement. I'm not sure how they verify purchase.
 

MelindaV

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#13
LOL, what would constitute sufficient proof then? A note from Elon?

Seriously, that's ridiculous. Don't panic, just get in touch with them however they asked you to and politely ask them what you need to provide in order to satisfy the terms of the credit.

I"m assuming that none of these terms posted above qualify in your case?





Same here. No one even asked to see my purchase agreement. I'm not sure how they verify purchase.
here's the exact language from my audit:

"To be allowed the Plug-In Electric Drive Motor Vehicle Credit you must provide documentation that qualifies you for this credit. Please provide a copy of the valid sales contract and the manufacture's certification, or the domestic distributor's certification if a foreign manufacturer, for each vehicle claimed on the Form 8936. In addition to certification, the following requirements must be met to qualify for the credit:
a. You are the owner of the vehicle. If the vehicle is leased, only the lessor and not the lessee, is entitled to the credit.
b. You placed the vehicle in service during your tax year.
c. The original use of the vehicle began with you.
d. You acquired the vehicle for use or the lease to others, and not for resale, and
e. You used the vehicle primarily in the United States."

I sent them my purchase/sales agreement, window sticker, registration, etc... I contacted both my local store and Tesla corporate and nobody had any clue to what the manufactures certification was beyond the window sticker, so if the IRS is looking for something beyond that, I and those I spoke to at Tesla didn't know what it would be.
 

Needsdecaf

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#14
Only thing I can think of is the Title / Manufacturer's Certificate of Origin. Beyond that, the only certification could possibly be that Tesla qualifies for the program under IRS rules? But why should you have to provide proof of that to the IRS. They should know that.

Very odd.
 

Nautilus

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#15
I'm intrigued by why the IRS is clamping down. I get that there's a X% fraud rate (or erroneous claims), but I thought the way they prevented double dipping of two people claiming the refund for the same car was by tracking VINs (since that is a required piece of info on Form 8936). If you file for the tax credit with a VIN that is already in the IRS database of cars that have qualified for the credit from someone else, then you get flagged.