Dealer screwed up tax credit paperwork (Post 62)

[KennyB123]

This has been one of the most frustratingly painful threads I've ever tortured myself to read through. DesertEV, your reading comprehension is severely lacking.

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[flyct]

bought mine last September. my dealer didn't file anything and no one had ever heard about any such requirement. just filled out the 8036 when I filed. credit came though without any problems.

Rules for purchases after Jan 1st, 2024 changed.

 

[TaxmanHog]

POST #47 !!

Folks, there were old ways that some members are stuck thinking still apply and new ways, it's all about how to do this right in the present and future years.

132448793th reason to can the franchise agreements for dinosaur dealerships in favor of competent Model-e franchises, come on Farley, & Bill Ford PULL THE PIN !

 

[RickLightning]

In reality, I expect no consumer to be denied a tax credit. With the info supplied in your return, the IRS knows who sold the vehicle, and goes back to the dealership with penalties / fines.

 

[DesertEV]

This has been one of the most frustratingly painful threads I've ever tortured myself to read through. DesertEV, your reading comprehension is severely lacking.

This has been one of the most frustratingly painful threads I've ever tortured myself to read through. DesertEV, your reading comprehension is severely lacking.

The dealership should have put this in the deal for him, but didn’t and yes OP knew that, but that affects how much you finance and it is crazy that the dealer would not do this for him or anyone.. Then they don’t file it after saying they would file it. A lot of dealers use excuses or just don’t know much about the EVs in general and that is definitely true when it comes to handling the tax credit.

 

[TaxmanHog]

I don't know for certain what the penalty for failure to report is in this situation, but IMHO it needs to be steep enough to compel the actors to sh!t or get off the pot.

Maybe ~$15,000 is reasonable????

 

[Whammy Bar]

 

[Etsquared]

Totally confused about what you're looking for. There is no paperwork required from the dealer, if the dealer is not fronting the tax credit. You just fill out a form 8936 when filing your 2024 tax return.

Not exactly, dealer needs to submit paperwork that includes your SSN otherwise no credit will convey at tax time

 

[climateguy]

Although the dealer is required to submit certain information to the IRS, there doesn't appear to be any penalty that the IRS will impose on that dealer, except that the IRS does not issue the credit:

“At the time of sale, a seller must give you [ the buyer ] information about your vehicle's qualifications. Sellers must also register online and report the same information to the IRS. If they don't, your vehicle won't be eligible for the credit.” (See IRS: Clean Vehicle Tax Credits).

This applies whether the buyer is going to assign the credit to the dealer at the time of sale, or if the buyer is going to claim the credit when filing the next tax return.

It seems to be Buyer Beware.

The IRS does warn buyers that it isn’t just up to the dealer to make sure this has been done. The date the newly purchased vehicle is driven off the dealer’s lot is regarded by the IRS as the date the vehicle is put into service. Before putting the vehicle into service, i.e. leaving the dealer's lot:

"Buyers purchasing a new or used clean vehicle must walk away from dealership with an IRS Energy Credits Online accepted Clean Vehicle (CV) Time-of-Sale report." See IRS: Information for Consumers Purchasing a New or Used Clean Vehicle)

One key word in the above is "accepted". Its an online process. IRS acceptance means the dealer has provided all required information and signed subject to perjury that the dealer believes everything provided is true, and, that the IRS formally acknowledges it has received this info. Its automated. The acceptance comes back to the dealer right away.

In case of a screwup, all may not be lost.

Some of the language in IRS publications indicates they have or are thinking of having some sort of process to deal with buyers who did not know that the IRS must accept a dealers CV Time-of-Sale report or there is no tax credit. (Eg. See IRS: How to claim a clean vehicle tax credit)

It seems the IRS should not deny the tax credit to buyers who were assured by the dealer that all relevant reporting requirements had been satisfied when they were not.

But it looks like they can.

 

[DesertEV]

Although the dealer is required to submit certain information to the IRS, there doesn't appear to be any penalty that the IRS will impose on that dealer, except that the IRS does not issue the credit:

“At the time of sale, a seller must give you [ the buyer ] information about your vehicle's qualifications. Sellers must also register online and report the same information to the IRS. If they don't, your vehicle won't be eligible for the credit.” (See IRS: Clean Vehicle Tax Credits).

This applies whether the buyer is going to assign the credit to the dealer at the time of sale, or if the buyer is going to claim the credit when filing the next tax return.

It seems to be Buyer Beware.

The IRS does warn buyers that it isn’t just up to the dealer to make sure this has been done. The date the newly purchased vehicle is driven off the dealer’s lot is regarded by the IRS as the date the vehicle is put into service. Before putting the vehicle into service, i.e. leaving the dealer's lot:

"Buyers purchasing a new or used clean vehicle must walk away from dealership with an IRS Energy Credits Online accepted Clean Vehicle (CV) Time-of-Sale report." See IRS: Information for Consumers Purchasing a New or Used Clean Vehicle)

One key word in the above is "accepted". Its an online process. IRS acceptance means the dealer has provided all required information and signed subject to perjury that the dealer believes everything provided is true, and, that the IRS formally acknowledges it has received this info. Its automated. The acceptance comes back to the dealer right away.

In case of a screwup, all may not be lost.

Some of the language in IRS publications indicates they have or are thinking of having some sort of process to deal with buyers who did not know that the IRS must accept a dealers CV Time-of-Sale report or there is no tax credit. (Eg. See IRS: How to claim a clean vehicle tax credit)

It seems the IRS should not deny the tax credit to buyers who were assured by the dealer that all relevant reporting requirements had been satisfied when they were not.

But it looks like they can.

Great info. The dealers that don’t submit and provide that documentation to the buyer - would you agree that they hold some responsibility in that? They should be aware that they have to submit that at sale within three days and provide a copy to the buyer.

 

[broteus7]

Following this thread because I'm in the exact same situation. Did you buy from Santa Monica Ford by chance?

The dealership is essentially operating on the 2023 method where the consumer files for the tax credit when it's time to file taxes. The dealership had until some time in January 2024 to submit VINs to the IRS. Purchases in 2024 required dealerships to report the sale to the IRS within 3 days.

My dealership originally told me the IRS is slow in approving the dealerships to use the website so I can file next year and claim it then with the bill of sale. Problem is that the dealership is still required to report the sale to the IRS on their website. I've been trying to get the sales rep to contact me because they need to give the buyers Form 15400 (I think) and they won't return my call. I've contacted the IRS to get clarification but they just repeat whatever the website says without actually addressing my question.

The 3 day deadline may be more of a guideline (because I think a bunch of people will be in this situation and if there is a slow response time of approving dealerships to use the website) so I'm hoping it'll be okay considering I bought back in March and have been patiently waiting after talking with the IRS a few weeks ago.

I'm tempted to see if I can get a lawyer involved but I'm not even sure if they can really do much.

 

[TaxmanHog]

One more point you all might not understand, some dealers will NOT be approved because they have other issues, i.e. non-compliance with general filing requirements or other "IRS" matters, some of these business' might be timid about coming into full compliance with all outstanding issues which preclude them from participating. Unfortunately, this leaves unknowing buyers in a lurch.

Ideally the IRS seeks to have as many fully automated processes working in concert, but there are always exceptions to every ideal design, I'd hope a manual bypass is still available, i.e. the individual needs to file the claim at the end of the year, if/when the e-file system rejects the initial claim, an appeals process should open to allow for manual verification of a qualified sale, I'd still subject the non-compliant seller to penalties for burdening everyone and creating inefficiencies in the process.

 

[climateguy]

What I've found when dealing with other US government departments, such as Treasury, or Homeland Security regarding immigration issues, is that although they may have very draconian sounding documents stating you must do this or that, when it comes down to it, if you didn't intend to violate whatever seems to have you in hot water, their bark is worse than their bite.

I don't know about the IRS. Many people have a fear about the IRS. For one thing, if you are in a dispute with Treasury about some rule they have that might mean you owe them some money, Treasury has to prove to a court you owe them money before they can seize it. The IRS can seize first, and you have to prove to a court that the IRS has to pay you back. The IRS has this unusual power.

But if I had not known about this 3 day reporting rule, and someone in the IRS was telling me too bad you can't get a $7,500 clean vehicle tax credit, I would be attempting to verify this with higher ups in the IRS. I would be publicizing what happened, so others might become more aware before they end up in the same boat, and also to try to put pressure on the dealer to make up my loss. I don't know about lawyers - a few threatening letters might cost more than $7500....

 

[TaxmanHog]

I don't know about the IRS. Many people have a fear about the IRS. For one thing, if you are in a dispute with Treasury about some rule they have that might mean you owe them some money, Treasury has to prove to a court you owe them money before they can seize it. The IRS can seize first, and you have to prove to a court that the IRS has to pay you back. The IRS has this unusual power.

Not all enforced collections actions are subject to judicial review prior to being executed, shrewd individuals with good representation will exercise all rights of appeal and make claims where judicial remedies are available, 33 years as a Revenue Officer and now retired.

 

[Joe.....Montana]

Sadly, this is why when I was looking to purchase lightning one of the first questions I asked (called four different dealers) was whether or not the $7,500 was taken off upfront and if they would be able to provide proof of sale document (per IRS website). Three dealerships said yes and seemed to know what I was talking about. One had no clue and told me they didn't have to do anything, it was up to me to make sure I would qualify. I wasn't going to assume the dealerships would have any clue, so I triple checked the IRS website, luckily, when I checked the IRS even had a box that said "Attention: New Requirement!" that laid out the new rules (post Jan 1) that said "Clean Vehicle Tax Credit must be initiated at time of sale. Buyers are advised to obtain a copy of the IRS's confirmation that a "point of sale" report was submitted." I took a photo of the notification box.

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