IRS Auditing Me for Taking EV Tax Credit

[RocketGhost]

Got a letter from the IRS saying that the VIN on my tax return "is either ineligible or invalid." They want me to submit the VIN and a copy of the vehicle sales contract. There's also six yes/no questions: did I lease it, am I the owner, did I buy it to use or lease to others and not for resale, did I place the vehicle in service during the tax year, did the original use begin with me, and do I use it primarily in the US.

I had claimed the credit on my 2024 taxes. I did not transfer the credit to the dealer to take at point of sale.

During the purchase the dealer reported the sale on the IRS portal and I got a copy of Form 15400 before I left that shows IRS confirmation that the truck did qualify for the credit and it was properly reported. I double checked and the VIN on my tax return, the VIN as reported to the IRS by the dealer, and the actual VIN of the truck all match and are correct.

What's interesting is that folks reported that if they tried to claim the credit and the sale wasn't reported and verified by the IRS their tax returns were rejected. I e-filed mine and it was not rejected.

It just seems odd that there were several layers of verification that were passed and yet they think the VIN is invalid or ineligible. Fortunately I have plenty of documentary proof that it was eligible for the credit, so I don't think there will be a problem unless there's more to it than I know at the moment or the IRS has made a mistake and they dig their heels in and won't admit it.

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[TaxmanHog]

Don't sweat it, supply all the documents, and if anything goes awry, exercise your appeal rights.

 

[RickLightning]

I wonder if the dealership also claimed it.

 

[Lightning Rod]

The government is out of control with this anti EV, anti-green, anti-renewable energy shit that they are on.

 

[RocketGhost]

I wonder if the dealership also claimed it.

I don't see how that would be possible. They never owned the truck (as a titled/registered owner). You can't claim the credit for someone else's truck.

And they didn't transfer the credit to themselves, I have the IRS paperwork that shows they did not. But the issue isn't who got the money, the issue is that the IRS thinks/suspects the truck does not qualify for the credit in the first place.

 

[RocketGhost]

The government is out of control with this anti EV, anti-green, anti-renewable energy shit that they are on.

The thought has crossed my mind that the administration is directing the IRS to take a very hard look to "find" fraud with the EV tax credit.

I can see how people who legitimately got the credit may have a hard time fighting an audit if they don't have documentation. It would be touted as fraud when in reality the taxpayer just couldn't or wouldn't fight.

 

[TaxmanHog]

The thought has crossed my mind that the administration is directing the IRS to take a very hard look to "find" fraud with the EV tax credit.

I don't know for certain, but on occasion, the IRS does what is called a TCMP {tax compliance measurement program also called NRP {National Research Program}.

They pull a representative sample of returns within a certain segment of filing criteria, they look with "limited Scope" at the core issue, generally not looking at other matters ie. they won't dig deeper for little or no reasonable cause not a full blown audit.

The issues might have arisen for GIGO {garbage in garbage out} information returns, which I find highly unlikely given the extensive automation involved in the initial claim filing process, but data brownouts can occur, when it happens it might be good reason to take a sample to ensure all is proper.

Again, exercise your appeal rights if the outcome is not as you expect it to be.

 

[TaxmanHog]

By the By, what was the form letter number on the initial contact letter, was it CP2000, CP2501 something else?

The information returns compliance review cycle is now in process for all returns filed for tax year 2024, ALL tax returns are data-matched with information returns, when there is a gap in validating information the return is flagged for review, many types of issues crop up, under reporting of income (wages, interest, dividends, stock sales, other income) or over stating certain deductions, and qualification for specific types of tax credits like the clean vehicle tax credit.

 

[Dan C]

I had the same problem. Turns out I had one digit on the vin wrong. Took almost two years and many letters an phone calls to straighten out

 

[JMD359]

Sounds like your Vin number got entered wrong . I don’t think this has anything to do with the current administration being anti-anything. Personally, I’m glad we were out of the green movement bull crap. Also glad the tax credit went away even though I took advantage of it twice. I feel like it caused the dealers to keep the prices higher because they knew you were getting 7500 back . Also gonna force the manufacturers to make a better product and sell it based on its merit, not on tax credit.. since our government got out of the charger business charger installations have been going so much better, there are so many new chargers popping up so quickly now, when Biden was in office, everything took so much longer, eliminating the red tape seems to have done more to boost EV charger installations than getting rid of the incentives to
Help while the red tape was in place .

 

[oldman_74]

I am having the same issue with a high efficiency A/C we installed. The IRS did not move the qualifying manufactures ID from my E filed tax return for to their system. So the system kicked it back and reduced our return by the amount of the credit. . I am sure once you provide paperwork they will allow the credit.

 

[TaxmanHog]

I am having the same issue with a high efficiency A/C we installed. The IRS did not move the qualifying manufactures ID from my E filed tax return for to their system. So the system kicked it back and reduced our REFUND by the amount of the credit. . I am sure once you provide paperwork they will allow the credit.

Pet Peeve, after filing your "tax return" your might receive a 'tax refund"

I believe the OP had already benefited from the approved credit and received a refund or net lower liability to pay.

 

[Randys Lightning]

Got a letter from the IRS saying that the VIN on my tax return "is either ineligible or invalid." They want me to submit the VIN and a copy of the vehicle sales contract. There's also six yes/no questions: did I lease it, am I the owner, did I buy it to use or lease to others and not for resale, did I place the vehicle in service during the tax year, did the original use begin with me, and do I use it primarily in the US.

I had claimed the credit on my 2024 taxes. I did not transfer the credit to the dealer to take at point of sale.

During the purchase the dealer reported the sale on the IRS portal and I got a copy of Form 15400 before I left that shows IRS confirmation that the truck did qualify for the credit and it was properly reported. I double checked and the VIN on my tax return, the VIN as reported to the IRS by the dealer, and the actual VIN of the truck all match and are correct.

What's interesting is that folks reported that if they tried to claim the credit and the sale wasn't reported and verified by the IRS their tax returns were rejected. I e-filed mine and it was not rejected.

It just seems odd that there were several layers of verification that were passed and yet they think the VIN is invalid or ineligible. Fortunately I have plenty of documentary proof that it was eligible for the credit, so I don't think there will be a problem unless there's more to it than I know at the moment or the IRS has made a mistake and they dig their heels in and won't admit it.

Mine was rejected because it was a Platinum, ridiculous.

 

[chl]

Sometimes the IRS letters don't fully explain what the issue is - they send out a form letter that seems closest to what the issue is. And there was a lot of reduction in force at the IRS thanks to Elon's 'doge' purge so experienced people took early retirement etc.

Wasn't there an income limit as well for the tax credit? I guess you checked that you qualified under that limit?

I also claimed the credit in 2024. I had a different problem before I filed - the dealership had not given me the paperwork!

So before I filed my 2024 return, I checked that the IRS had received the documentation on line - @TaxmanHog explained how to access it.

Then a week or so later, the IRS sent me a letter that acknowledged the claim for the credit, actually I got two of those letters.

Sure hope I don't need the paperwork from the dealership some day for some audit...omg.

Always something...

 

[chl]

Sounds like your Vin number got entered wrong . I don’t think this has anything to do with the current administration being anti-anything. Personally, I’m glad we were out of the green movement bull crap. Also glad the tax credit went away even though I took advantage of it twice. I feel like it caused the dealers to keep the prices higher because they knew you were getting 7500 back . Also gonna force the manufacturers to make a better product and sell it based on its merit, not on tax credit.. since our government got out of the charger business charger installations have been going so much better, there are so many new chargers popping up so quickly now, when Biden was in office, everything took so much longer, eliminating the red tape seems to have done more to boost EV charger installations than getting rid of the incentives to
Help while the red tape was in place .

Now if only we could get out of the oil industry tax payer subsidies bull crap!

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