The Brammo Buying Experience > Taxes, Incentives, Advantages

IRS EV tax credit problems

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Richard230:
According to a short blurb from the AP in my newspaper today: "A Treasury Department inspector general report says that nearly 13,000 taxpayers erroneously claimed about $33 million in credits for plug-in electric and alternative vehicles during the first six months of 2010. The  inspector general says about 20% of the $163.9 million in credits were claimed in error. The report did  not indicate whether or not the taxpayers made the claims out of confusion or purposely took advantage of incentives for which they were not qualified."

Unfortunately, the report did not indicate what mistakes were made in taking the credit. I sure would like to know how so many people managed to screw up their EV credit tax forms. It does seem odd though that so many people have apparently taken this credit. I had no idea so many plug-in vehicles had been sold in 2009, or are there that many people who will just fake the purchase and hope that they don't get caught? That might put the rest of us who actually bought an EV on the IRS hot seat.  Meanwhile........

This is all very timely for me, as I just had my 2010 income tax return prepared today. As it turns out, my tax preparer spent as much time trying to figure out how to interpret the IRS claim instructions and trying to get the IRS computer program to properly enter the 10% credit for the purchase of my GPR-S as she did to prepare the rest of my return. Not only was the IRS form computer program not allowing her to enter the credits where it made logical sense in accordance to the instructions, but Electric Motorsport is not in the IRS database as an EV manufacturer and had to be entered under the category of "other". (I didn't ask if Brammo was in their database, but it probably is as Brammo is a lot more organized than EMS and doesn't try to pretend that they don't actually make electric motorcycles.)

Anyway, she finally was able to fight the program and get the form (hopefully) filled out correctly, but I sure hope I don't get audited because I took this credit.  Completing the IRS EV credit form should be simple, but it apparently is a lot more complicated than it needs to be.

Kelly Olsen:
That is really weird. How could that many people get it wrong? Either your car plugs into a wall or it doesn't. But there were probably very few, if any, real plug in cars sold last year except for the NEV's (electric cars that go under 25 MPH.)

And speaking as a former elected politician I can tell you that most government workers do not think it is their job to make anything clear or easy for the public.

Richard230:
I don't know if this is going to help anyone or not, but here is how my low-cost "tax preparer" (not an accountant) filled out my IRS form 8910 "Alternative Motor Vehicle Credit" claim form.;

 Part 1 "Tentative Credit", Line 1: 2010 GPR-S Electric Motor Sport (a slight error in the company name).  Line 2", date vehicle placed in service: 01/01/2010 (a slight error there too - the date should have been 01/10/2010). Line 8, "maximum plug-in conversion credit amount allowable": $4000 (conversion?)  Line 10, "Tentative credit": $880.

Part II "Credit for Business/Investment Use Part of Vehicle": 0%

Part 111, "Credit for Personal Use Part of Vehicle", Line 16: $880. Line 17: $880. Line 21: $880 (enter on Line 53 of Form 1040)

Now this was a "slam bang thank you ma'am" return. I signed the form without even seeing my return and it got prepared and mailed off within 4 hours. I got my copy dropped off during the late afternoon, so I didn't get a chance to comment on my return before it hit the mail. Still, the credit form was filled out better than the one last year (for my 2008 GPR-S purchase) and I haven't been called on the carpet that one  - yet. So I am making no guarantees that any of this is the correct way to fill out the credit form. And you get what you pay for.   ::)

protomech:
http://www.usatoday.com/money/perfi/taxes/2011-02-03-erroneous-electric-vehcile-tax-credits_N.htm

The article links to a pdf report breaking out the discrepancies.

9621 individuals claimed $27.1 million for ineligible vehicles. The IRS has a list of eligible plug-in hybrids, electric vehicles, and "alternative" vehicles (?), anything not on the list was flagged. In some cases these may be legitimate claims that were filed improperly, for example claiming a closed-loop hybrid with an eligible credit as a plug-in hybrid.
129 individuals claimed $2.1 million in multiple credits for a single vehicle.
14 individuals claimed $1.4 million for > 5 vehicles each, the suggestion was that these may be instances of vehicles purchased for small business operations being claimed under a personal tax credit.

Richard230:
It looks like my tax preparer used the wrong form. She used the form for a conversion and not the one for a new DOT approved EV.

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