The leaders of the Senate Finance Committee are asking Volkswagen about the federal tax credits given to buyers of its vehicles for owning energy-efficient cars, amid revelations that the automaker programmed its devices to cheat emissions tests.
[IMGCAP(1)]Senate Finance Committee chairman Orrin Hatch, R-Utah, and ranking Democratic member Ron Wyden, D-Ore., sent a letter Tuesday to Volkswagen AG and Volkswagen Group of America, asking the automaker about the use of “defeat devices” in diesel passenger cars and the subsequent certification of information to the Internal Revenue Service in order to meet requirements for federal tax credits and increase sales of these vehicles.
The letter comes as the House Energy and Commerce Committee plans to hold a hearing Thursday to ask VW executives and Environmental Protection Agency officials about the scandal. The EPA announced last month that Volkswagen installed defeat devices on nearly 500,000 vehicles in the U.S., including the Jetta, Beetle, Passat and Golf, along with the Audi A3. VW is recalling the cars, and has admitted that up to 11 million vehicles worldwide may have the devices installed in what has become known as the "diesel dupe." The devices had software that detected when the vehicle was undergoing an emissions test and would reduce emissions during the test, but then begin emitting more pollution when the vehicle was back on the road.
Created by Congress in 2005, the Alternative Motor Vehicle Tax Credit included an advanced lean-burn technology motor vehicle credit, which was available to purchasers of new, qualifying vehicles.
Volkswagen certified to the IRS that several of its 2009 and 2010 models qualified for the $1,300 per vehicle credit, Hatch and Wyden noted, and sales figures suggest that over $50 million in tax subsidies went to purchasers of these vehicles.
Recent findings by the U.S. government show that Volkswagen manipulated emission control systems for as many as 482,000 diesel vehicles sold in the U.S. through the use of auxiliary emission control devices, classified by the U.S. government as “defeat devices.”
[IMGCAP(2)]“The vehicles in which Volkswagen installed ‘defeat devices’ included those that the company certified as qualifying for the advanced lean-burn technology motor vehicle credit,” Hatch and Wyden wrote. “While investigations are ongoing, the Volkswagen Supervisory Board has confirmed that the company installed ‘defeat devices’ on as many as 11 million vehicles marketed as model years 2009 through 2015. This activity raises questions of whether Volkswagen made false representations to the U.S. government in its certification for federal tax subsidies.”
Hatch and Wyden pointed out that in 2008, Volkswagen certified to the IRS that the 2009 Volkswagen Jetta TDI Sedan and SportWagen qualified for $1,300 in tax credits per vehicle sale. On October 6 of that year, the IRS acknowledged Volkswagen’s certification. Other 2010 Turbocharged Direct Injection Volkswagen and Audi vehicles were later certified for eligibility. Volkswagen sold at least 60,000 of these vehicles by July 1, 2010, after which the credit amount was reduced in half until December 31 of that year.
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