IRS rejected my $2500 PIP credit.

So weeks of righteous indignation and the usual suspects rants about IRS we find the tax preparer sent the wrong form.

A lesson to carry forward.

 

Well, I just got my latest rejection letter from my friends at the IRS...... It seems that this time I was rejected because I did not include a copy of my registration and a copy of the title (which my credit union is in possession of right now). I don't recall anyone else mentioning this requirement. Did I miss something somewhere?

 

I have to say this sounds like a crazy and very complicated way of running a government subsidy for electric vehicles. I realise that you have the complications of state credits too, but over here in the UK the government subsidy is claimed by the supplier and deducted from the price of the car when bought new; the purchaser isn't involved at all. Surely that would have been an easier way to handle the Federal credit, at least, over there?

 

Except that the US law says that the rebate is a credit against taxes owed...and there isn't a way for a dealer to know or verify if a buyer qualifies.

Mike

 

As noted, it's done as a tax credit in the year of purchase rather than a price subsidy so it has to be attached to the declaration. This year's cluster was caused by the late budget agreement by Congress delaying the issue of forms and a change from previous years to ensure that people send evidence of ownership of the car.

As an ex-pat I view the US self-declarative tax system as an inefficient pile of poo as well and much prefer the British system of deduction-at-source with exceptional self-declaration. You only have to watch all the commercials at tax time to understand that something is very, very wrong.

 

Good Heavens! BTW, you're not in the Tea Party, are you? (Just kidding- what a frustrating experience.)
As to your question about sending in a copy of the title, I don't believe that was necessary in my case. I did include in the documentation I sent to my CPA copies of the sales contract, which of course included the VIN and registration info. Since my return was filed electronically I doubt very much if copies of the documents were sent, rather just the form was submitted.

 

Have you gotten a faster response and credit if you bought a Chevy Volt? lol. Just messing with you.

 

I have no idea what they are talking about. My tax preparer just filled out the appropriate e-form (8936) and e-filed it along with the rest of my forms, and everything was accepted without question. One has to be REAL careful to file the correct form. There is some other form when the car is used for business, and there are several closely related now-expired programs.

 

I use my car in business, but Form 8936 allowed for both business and personal use. The credit was split between the two using the percentages of business vs. personal use of the vehicle.

 

I don't understand that - you don't get a title if its financed so how can that be a requirement ?

 

Yes, I realise that if you make it a tax credit, then it has to be handled this way. My query was why it should be a tax credit in the first place. Very few people who pay less than $2500 tax are going to be buying one, and the admin costs are so much higher than if it is a grant the dealers reclaim.

 

Well, today the IRS deposited the $2500 into my account. They even threw in an extra $21.88 (interest?). Zippeedooo!!! Hmmmm, I wonder if that $21.88 is taxable?

 

I think it is Double taxed!

 

Congratulations! $$$

 

So did they do this without the title ? You mentioned before it didn't go through as your credit union had that...
I'll be in the same boat as I did the 0% 5yr financing

 

I had my credit union send me a copy of the title, and I sent that to the IRS, along with a copy of my registration.

 

that's a really good point, if I had not converted a IRA to a Roth I would not have gotten the full value of the credit. That is exactly what is wrong with the law. Washington giveth and taketh away, at the same time. I filed by paper this year, because I could see that none of the on line people were prepared for the 2500 rebate, I enclosed a work order from the dealer with my name mileage and VIN # along with my 1040 paperwork. No problems.

 

That so called credit should be continuous until used up. Why buy a Hybrid/ Electric with a 7500 credit, if only a portion can be used? Washington should get its head out of its behind.

 

...believe Plug-In America has been lobbying for changing the tax credit to a direct credit, but I have not heard any recent updates on the status.

 

I'm definitely have a lot of learning to do when it comes to stuff like this...but what is the difference between a tax credit, a direct credit, and a tax rebate?