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Re: Electric drive vehicle credit 8936 decreased/rejected by

Posted: Mon Apr 30, 2012 7:42 am
by oakwcj
GaslessInSeattle wrote:It sounds like it's not so random. our refund status on the IRS web site has been "Your tax return has been received and is being processed" for many months. We filed in early February and it's getting kind of nerve wracking. It appears that a few things could be adding to the delay. Our tax person has called and found that they are "investigating" the claim and that the main red flag is the EV credit. Our accountant told us we are in IRS limbo land, where it takes many weeks, sometimes months to get shuffled around. From the talk she had with an IRS rep last week, we will likely have to come up with the invoice and prove we actually bought the car but won't even be given the chance till 30 days passes from the time the investigation started or something like that. I have never had such a large return as we have better planned withholdings in the past. In hind sight, our accountant suggests trying to avoid ever having a refund over $10,000, as it automatically flags your account.

for folks buying this year, I would consider claiming more exemptions as you go if you can to keep the actual refund from being large... at the very least, you won't be wringing your hands for months waiting for a big refund check.


oakwcj wrote:
mwalsh wrote:I don't know about that, but I do know that the IRS is sitting on my tax return for this year. I've had private discussion with someone else in the same situation and who has contacted them - he's waiting on "an investigator" being assigned to his "case"! :shock:
I don't think it's quite that ominous. The IRS randomly selects some returns claiming certain large tax credits. They go to the "examination" -- not the "investigation" -- department to be looked at by an "examiner." The only problem I have with the process is that it is taking way too much time.
The "flag" is the EV credit. The selection process appears to be random. My refund is under $10k, so there goes that theory. Just because there are three people on this forum whose returns are being "investigated" doesn't mean that the process isn't random. My return is very simple: standard deduction, no Schedule C, etc. My tax lawyer friend told me that there have been cases of fraudulent claims for the EV credit in the past few years and that the IRS apparently decided to take a closer look at a sample. While it's infuriating to endure the long delay, we can probably blame the House Republicans for cutting the IRS budget for that.

Re: Electric drive vehicle credit 8936 decreased/rejected by

Posted: Mon Apr 30, 2012 7:57 am
by Weatherman
oakwcj wrote: My tax lawyer friend told me that there have been cases of fraudulent claims for the EV credit in the past few years and that the IRS apparently decided to take a closer look at a sample. While it's infuriating to endure the long delay, we can probably blame the House Republicans for cutting the IRS budget for that.
Speaking of which... Here's the report from the Treasury Department about the abuses. It's an interesting read:

http://www.treasury.gov/tigta/auditrepo ... 1011fr.pdf" onclick="window.open(this.href);return false;


There is a section in there on individuals claiming "excessive numbers of vehicles on the Form 8936", and stating they are for "personal use". If the car is for personal use, you can use the tax credit to reduce AMT. However, if the credits are for business use, the business portion of the credit cannot be used to reduce AMT.

Re: Electric drive vehicle credit 8936 decreased/rejected by

Posted: Mon Apr 30, 2012 8:13 am
by thankyouOB
Weatherman wrote:
Speaking of which... Here's the report from the Treasury Department about the abuses. It's an interesting read:

http://www.treasury.gov/tigta/auditrepo ... 1011fr.pdf" onclick="window.open(this.href);return false;


There is a section in there on individuals claiming "excessive numbers of vehicles on the Form 8936", and stating they are for "personal use". If the car is for personal use, you can use the tax credit to reduce AMT. However, if the credits are for business use, the business portion of the credit cannot be used to reduce AMT.
brilliant find.
how did you do it?

Re: Electric drive vehicle credit 8936 decreased/rejected by

Posted: Mon Apr 30, 2012 8:17 am
by Weatherman
thankyouOB wrote:brilliant find.
how did you do it?
Google is my friend. ;)

Re: Electric drive vehicle credit 8936 decreased/rejected by

Posted: Mon Apr 30, 2012 8:20 am
by EdmondLeaf
Very interesting report, and assure that EV credit, if EV is for personal use, can't be reduced by TMT or AMT. Not sure why IRS reduced EV credit for OP
A vehicle claimed for personal credit has a tax advantage because the amount can be used to reduce the AMT.

Re: Electric drive vehicle credit 8936 decreased/rejected by

Posted: Mon Apr 30, 2012 9:34 am
by TLeaf
I wonder how many of these people intentionally falsified their returns and how many people simply didn't take the time to understand the nature of the credit but proceeded with it anyways based on "common wisdom" (e.g.- "I was told that my 2007 Zap Zebra would qualify for the full $7,500"). It seems that a majority of people don't delve into the tax code very deeply (same "what, me worry?" mentality as can be found with elections, global warming, programming VCRs and other complex issues), so I wouldn't doubt that there's a fair share of the latter..

FWIW- My paper-filed tax return took roughly 8 weeks to get processed and paid..

Re: Electric drive vehicle credit 8936 decreased/rejected by

Posted: Mon Apr 30, 2012 10:11 am
by Bassman
Filed TurboTax electronically with the EV Credit Form 8936 and a Schedule C (wife has a flower shop). My LEAF is for personal use only. Got the refund within three weeks, but due to lower tax liability, only got about $5600 instead of $7500.

Re: Electric drive vehicle credit 8936 decreased/rejected by

Posted: Mon Apr 30, 2012 12:20 pm
by mwalsh
oakwcj wrote: The "flag" is the EV credit. The selection process appears to be random. My refund is under $10k, so there goes that theory. Just because there are three people on this forum whose returns are being "investigated" doesn't mean that the process isn't random. My return is very simple: standard deduction, no Schedule C, etc. My tax lawyer friend told me that there have been cases of fraudulent claims for the EV credit in the past few years and that the IRS apparently decided to take a closer look at a sample. While it's infuriating to endure the long delay, we can probably blame the House Republicans for cutting the IRS budget for that.
In my opinion their time would be better spent finding and eliminating the completely fake tax returns filed in order to get refunds! :x

Re: Electric drive vehicle credit 8936 decreased/rejected by

Posted: Mon Apr 30, 2012 1:07 pm
by oakwcj
mwalsh wrote:
oakwcj wrote: The "flag" is the EV credit. The selection process appears to be random. My refund is under $10k, so there goes that theory. Just because there are three people on this forum whose returns are being "investigated" doesn't mean that the process isn't random. My return is very simple: standard deduction, no Schedule C, etc. My tax lawyer friend told me that there have been cases of fraudulent claims for the EV credit in the past few years and that the IRS apparently decided to take a closer look at a sample. While it's infuriating to endure the long delay, we can probably blame the House Republicans for cutting the IRS budget for that.
In my opinion their time would be better spent finding and eliminating the completely fake tax returns filed in order to get refunds! :x
Of course. But they hardly have to spend any time on the EVSE credit. The VIN is on the form. All they have to do is cross-check with the DMV database. It's ridiculous to have a humanoid "investigator" look at these things if the cross-check confirms that you've registered an EV.

Re: Electric drive vehicle credit 8936 decreased/rejected by

Posted: Mon Apr 30, 2012 1:12 pm
by smkettner
Weatherman wrote:Here's the report from the Treasury Department about the abuses. It's an interesting read:
http://www.treasury.gov/tigta/auditrepo ... 1011fr.pdf" onclick="window.open(this.href);return false;

There is a section in there on individuals claiming "excessive numbers of vehicles on the Form 8936", and stating they are for "personal use". If the car is for personal use, you can use the tax credit to reduce AMT. However, if the credits are for business use, the business portion of the credit cannot be used to reduce AMT.
I have posted the effect several times. Although I did not know why the credit was reduced. Thanks for the tip.
I skipped Leaf business deduction in 2011 for this reason. I will put Leaf into business service for 2012 and see if IRS tries to claw the money back.