EV Buyers Are Getting Tax Returns Rejected After Dealers Screwed Up Credit Paperwork

When the Inflation Reduction Act overhauled the process of claiming electric vehicle purchase credits, it seemed like a win for everybody. Dealers would get bodies in showrooms and customers would (often, anyway) have an easier time claiming their discounts thanks to a new point-of-sale rebate system. But as we’ve seen before, it’s never that simple. With U.S. filers now submitting their 2024 taxes to the IRS, a surprising number of EV buyers are finding that their Clean Vehicle Tax Credit claims are being rejected, and often it’s the dealer’s fault. That’s because many are missing the window for reporting vehicle sales to the IRS, and customers are finding out only after their returns are rejected.

This story is getting national attention, but one need only go so far as social media to find examples of customers looking for help from those who successfully obtained their rebates. And often it seems to boil down to one of two stories: Either the dealership failed to report the sale within the window prescribed by the IRS, or worse, the dealer wasn’t even authorized to offer the discount in the first place because it refuses to participate in the program.

And the response from these dealers largely seems to be, “Oh, well.”

At the center of the issue for many is the new IRS form 15400, which was introduced last January. This report informs the IRS that the vehicle was eligible for the Clean Vehicle Tax Credit at the time of purchase, making it easy for the agency to validate a buyer’s claim. The form also tells the appropriate bean counters whether you claimed the rebate at purchase (an option not available under the previous EV tax credit) or planned to claim it when you filed your taxes (AKA the old-fashioned way).

If your dealer simply whiffed on the paperwork, that seems to be only a minor speed bump. As one user describes here on the F-150 Lightning subreddit, the IRS already has a procedure in place for claiming credits for unreported sales. The buyer needs only to submit a form (#8936 Schedule A, per the post) along with their VIN and proof of purchase. With this info, the IRS can manually verify the sale.

But the customers with real problems are those whose dealers don’t participate in the credit program at all, with some claiming they were misled or offered phony paperwork by non-participating dealers or individual sales representatives who were either ignorant of the new process or flat-out misrepresenting their dealership’s enrollment. One user even claims they were given a dummy form 15400 by a non-participating dealership. Some of these situations are leaving customers with no recourse short of litigation.

The IRS has acknowledged the various issues and has been communicating with dealerships and its support staff to help taxpayers troubleshoot their filings. In the meantime, customers should be cautious when purchasing or leasing an eligible EV. Don’t let a lazy or ignorant dealer screw you out of $7,500.

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