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Discussion Starter #1
We received our tax refund from the IRS for year 2017, and they removed our $7500 electric vehicle tax credit without providing any information as to why. Our CPA has minimal experience with electrical vehicle purchases and does not know if that refund is supposed to come separately, but believes that it should not. Our CPA says the return was received and accepted.

We have a couple of lines of evidence that this is a new car - we have the assurance from the dealer, we have the manufacturer's certificate of origin, and we have an in-service warranty date of 2017. We've verified the VIN is correct on form 8936, though there was a letter left off the name (fortw instead of fortwo).

So is there something unusual about this tax credit in that a refund comes from a different source? That doesn't seem to make any sense in case we actually owed money - we shouldn't have to pay it only to get a refund from another source. Am I missing something here?

Thanks.
 

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MY08 cabrio MY09 cabrio Brabus MY15 ED
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The VIN # should have overridden any misspelled vehicle name?

Unfortunately, like you CPA I do not believe the refund comes separately as it is a reduction in your taxes due.

What did/does the CarFax say with regard to FIRST title on your "leftover" 2015 Smart Electric Drive, from whom did you purchase and was the MCO an original or copy?
 

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Discussion Starter #3
We both thought the VIN should override the name, and the MCO did appear to be an original.

I did log into the IRS website and there's a notice that states there were some questions about our tax return and that we should be receiving a set of follow-up questions within the next 30 days, and that part or all of our tax refund may be withheld as a result.

I wonder if this is because it's a 2015 vehicle only being sold in 2017? Otherwise, if this had been previously registered/sold, it's going to be an ugly and drawn out situation with the dealership to get it resolved.
 

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Your Federal Tax Credit is different from say, a State Incentive, like the $2500, incentive in California, that they mail to you after you apply.
The Federal $7500, is a CREDIT, against your tax on line 47, of your Form 1040.
Here is how you do it. On line 54, you enter your $7500, credit from your Form 8936, (after writing 8936, in box-"c").
Now, subtract this from line 47.


Hear is the Good news and the Bad news:


Two examples might be,
1- Line 47, says you owe $8000, you subtract
the $7500, on line 54, and you send the IRS, $500.


2- Line 47, says you owe $6,000, you TRY to subtract your $7500,
on line 54, HOPING to get a refund of $1500. The IRS, says No !
The $7500, is a one time tax Credit you may use to offset what you owe
BUT, if you owe less than $7500, the difference is not refundable nor
may you carry it forward to next year.


I hope this helps !
 

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Discussion Starter #5
Optimist, our tax liability before the $7500 tax credit was in excess of that amount, so we were able to claim the entirety of the tax credit. Due to different sorts of payouts revolving around my retirement last year, we were entitled to a tax refund even without the $7500 EV tax credit, and what we received from the IRS was a payment of that amount sans the $7500.

It'll be interesting to see what "questions" they have about our claim for the $7500 tax credit.
 

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MY08 cabrio MY09 cabrio Brabus MY15 ED
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I wonder if this is because it's a 2015 vehicle only being sold in 2017?
As a one who "cooked the books" back in Corporate America - the above scenario SHOULD have triggered an audit flag. The "bean counter" in me would be asking for evidence of an original copy of the MCO. :nerd:
 

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Good luck !
If line 56, on your return is a positive number, you should
receive the benefit. Let's say that line 47, is $7500, and lines,
48-54, total $7500, (just your form 8936 credit). Then your Tax Bill is zero.
You are eligible to receive a refund of all payments you may have listed in lines 64-73.
 

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No 500k limit I can find anywhere. (Maybe that’s CA tax rules). Maybe dealer filed for the credit prior...

(Actually, it’s probably the typo that set them off...)
 

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Discussion Starter #10
Is it you earned over 500k last year???
I only wish, but no. I find it hard to believe that a typo on the name would set it off when the VIN was correct. I would imagine they would use the VIN and refer to the name just for validation - anything that close should suffice. This is govmint work, right?
 

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I only wish, but no. I find it hard to believe that a typo on the name would set it off when the VIN was correct. I would imagine they would use the VIN and refer to the name just for validation - anything that close should suffice. This is govmint work, right?


I don’t know who, or what, reads them. I suspect a computer program. Any way they can keep more money I suspect they may try. I always remember hearing somewhere that Harvard Law graduates get hired by the IRS....

My apologies for the confusion. I overheard the 500k limit in the Tesla Model 3 reservation line. I actually overheard limit so I had to ask how much because of my wife’s income....
 

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Keep us posted on your results. I may be in a similar situation. I bought my brand new 2014 and had it delivered in 2017, so I claimed the $7500 credit on my 2017 tax return. No notices for me from the IRS yet. If it happens, I'll let you know. For my other 2014 EV, I had it delivered in August of 2015. No issues on the credit on that one, but the dates were not as far apart.

Len
2014 EV Coupe 14,500 miles
2014 EV Cabriolet 4,500 miles
 

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Discussion Starter #14
Since we're going out of the country for an extended period next month, I decided to call the IRS and using the super-secret combo of choices to actually be directed to a representative (which was only about a two minute wait today), I found out that our $7500 tax credit will be issued within the next couple of days, without us having to provide any further documentation or information. Yay!

Best of luck to everyone else in the same situation!
 

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Good news for you and me too I hope. :)

Len
2014 EV Coupe 14,500 miles
2014 EV Cabriolet 4,500 miles
 

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If anyone is in southern California, SoCal Edison also has a little known $450 credit if you buy an electric car. New or used doesn't matter.
 

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We received our tax refund from the IRS for year 2017, and they removed our $7500 electric vehicle tax credit without providing any information as to why. Our CPA has minimal experience with electrical vehicle purchases and does not know if that refund is supposed to come separately, but believes that it should not. Our CPA says the return was received and accepted.



We have a couple of lines of evidence that this is a new car - we have the assurance from the dealer, we have the manufacturer's certificate of origin, and we have an in-service warranty date of 2017. We've verified the VIN is correct on form 8936, though there was a letter left off the name (fortw instead of fortwo).



So is there something unusual about this tax credit in that a refund comes from a different source? That doesn't seem to make any sense in case we actually owed money - we shouldn't have to pay it only to get a refund from another source. Am I missing something here?



Thanks.


I haven’t read all the posts, but will be interested in following the thread. My accountant informed me that the IRS uses the VIN for matching, with no other documentation needed. He was able to verify acceptance of my VIN while sitting with me, in real time. My return was processed electronically, and I received the expected credit.
 

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Well the VIN is the main identifying piece of information about the car on the IRS form. You also have to enter the year and make of the car along with the date it was placed in service.

Len
2014 EV Coupe 14,500 miles
2014 EV Cabriolet 4,500 miles
 

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Discussion Starter #19
I haven’t read all the posts, but will be interested in following the thread. My accountant informed me that the IRS uses the VIN for matching, with no other documentation needed. He was able to verify acceptance of my VIN while sitting with me, in real time. My return was processed electronically, and I received the expected credit.
We gave our information and documentation to our accountant, who took it back with him and electronically filed it the following day. He passed along to us the confirmation that the IRS received and accepted the transmission as a whole, but nothing specific about the acceptance of a VIN nor even a specific form like the 8936.

I looked at the form 8936 that was filed and everything looks to be complete, so I don't know why it took some extra days to get it all verified.
 
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