Let’s 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’s 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’t 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 “still exist.”
The future of this tax credit is really anybody’s 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 “Driving America Forward Act.” 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 “Driving America Forward” 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 “cheaters,” 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.