Govt Paid Millions in EV Tax Credits for Ineligible Vehicles

Published: Oct. 9, 2019, 3 p.m.

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Let\\u2019s just be real: Doing your taxes is complicated and hard, and even the most honest of individuals can find themselves making a mistake here and there. And if you do, that\\u2019s what the auditors are for, right?

Unless nobody is paying attention. A recent audit conducted by a U.S. Treasury Department watchdog revealed that some-$82 million in credits were bestowed upon American taxpayers over a five year period for electric and plug-in electric vehicles purchases that didn\\u2019t actually qualify for the EV tax credit.

Developed in 2009 to help support the ramp-up of electrics, the government program allows buyers of certain vehicles to claim a dollar-for-dollar credit on their taxes, depending on which models they buy. Manufacturers who hit a certain threshold in sales of these electrics see the credits for their buyers drop incrementally until they are phased out altogether.

According to Forbes, erroneous credits first started surfacing way back in 2011. After this same watchdog published the results of an investigation at that time, the IRS began requiring taxpayers to list their model year and VIN. And yet, the agency appears to have continued to fail spectacularly at tracking the vehicles in the program. In fact, the report blames a lack of controls and reviews for the massive blunder, and says many of the deficiencies identified back in 2011 \\u201cstill exist.\\u201d

The future of this tax credit is really anybody\\u2019s guess. President Trump wants to kill it. Meanwhile, industry stakeholders, including those currently most impacted by the phase-out like Tesla and GM, have rallied around a proposal called the \\u201cDriving America Forward Act.\\u201d If enacted, this would allow for an increased number of vehicles to be sold before the phase-out is triggered, leveling the playing field for some companies in the twilight of the current credit program.

But \\u201cDriving America Forward\\u201d may not be necessary if taxpayers can continue to write off whichever vehicles they want and nobody bothers to check their eligibility.

And as for the EV tax credit \\u201ccheaters,\\u201d they may yet get their comeuppance: According to Automotive News, the IRS is planning to develop a program that will try to recover the erroneously awarded credits.

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