A funny thing has been happening with the $7,500 plug-in electric vehicle tax credits that GM has been dangling before prospective buyers of its Chevrolet Volt: In many cases dealers rather than customers have been getting the tax breaks.
The tax credits are supposed to go to buyers of the vehicles to stimulate demand for alternative energy cars. But instead, dealers have been able to claim the tax credits by selling the Volt to each other and then reselling the vehicles as used cars to customers, with low mileage on the odometer. Technically, the tax credits are supposed to go to the buyers, but it isn’t illegal for the dealerships to claim them. However, they are supposed to inform customers that the tax credit is not available to them when someone else is claiming the credit for that car.
Last week, the
Nevertheless, as Mark Modica of the National Legal and Policy Center first noted on the
GM told
Be that as it may, it’s easy to imagine that many auto dealers would be less than forthcoming about whether the tax credits could be claimed, and would encourage customers to go ahead and claim the tax credits anyway.
It isn’t clear if the IRS has the ability to closely track which vehicles have had the tax credit claimed more than once. The NLPC noted that the
If double-claiming of tax credits for hybrid electric plug-in vehicles becomes a problem, the IRS may decide to not only revise the forms, but also start requiring taxpayers to document that they bought the vehicles as new and that the dealer has certified that the tax credit hasn’t already been claimed. That could be an extra record-keeping burden for accountants and tax preparers to worry about, but it could also keep their clients from being penalized for claiming tax credits that a dealer has already claimed for himself.