Errors in Dealers' Paperwork Are Causing Buyers to Lose Their EV Tax Credits with the IRS | Carscoops

      Some dealerships failed to complete the necessary paperwork properly, which has left owners, who were relying on tax rebates, to face the consequences.

      Buyers throughout the United States are experiencing tax return rejections due to errors in paperwork.

      While the vehicles qualify for rebates, mistakes were made by dealers in the documentation process.

      It remains uncertain how many buyers are missing out on their tax rebates, although the IRS might provide a resolution.

      Electric vehicles and plug-in hybrids are expected to deliver savings on energy expenses and sometimes even at the point of sale. However, while federal incentives have facilitated broader adoption, their continuation is not guaranteed and they could potentially vanish soon. In 2024, many purchasers considered these rebates when making their buying decisions, only to later discover that errors in dealership paperwork left them without their benefits.

      It appears that tax regulations related to electric vehicles undergo changes nearly every year, which was certainly true for 2024. One significant alteration allowed buyers to access their rebate at the time of purchase. For this process to function smoothly, dealers needed to participate in the program and utilize a specific portal to report when buyers availed themselves of the rebate during the sale.

      However, according to NPR, thousands of dealers did not comply with these requirements. Those who failed to enroll were still obligated to provide buyers with the necessary documentation to claim their tax rebate at year-end. Unfortunately, in many instances, the forms provided were outdated and, thus, ineffective.

      Kristina Meier, who purchased a PHEV minivan last September, stated that her dealer supplied forms that were valid in 2023 but not in 2024. If the dealer does not submit the paperwork accurately and on schedule, customers, despite adhering to all other requirements, are ineligible for the tax rebate.

      A Slim Chance for Resolution

      Dealers are required to submit paperwork to the IRS within three days after the sale, making it currently impossible for Meier and others in her situation to claim their tax rebates. Nonetheless, there is still a slight possibility for resolution: the IRS has permitted retroactive submissions in the past.

      If the agency allows this again, it may enable buyers like Meier to receive their tax rebate despite the dealer's initial errors. However, whether this will actually occur is still uncertain. Currently, it is unknown how many buyers are impacted by this issue, but increased vocalization from those affected may improve the likelihood that the IRS will take action.