IRS Offers Fix for Dealer Flub That Halted EV Owners’ Tax Returns

A few weeks back, we reported that the IRS was rejecting some EV owners’ tax returns over a widespread dealership flub. Some auto retailers missed the window to report EV transactions to the federal government, jeopardizing tax credits worth up to $7,500 and leaving buyers’ entire tax returns in limbo. Now, buyers left frustrated by the Clean Vehicle Tax Credit problems have received good news from the National Automobile Dealers Association: The IRS has made it easier for dealers to retroactively report 2024 EV sales to eligible customers, as NPR writes.

Last year, the IRS implemented a new portal to allow dealers to report EV sales that were eligible for point-of-sale tax credits, making verification of buyers’ tax returns a simple point-and-click process. That’s where some transactions hit a snag, with issues most commonly related to buyers’ IRS form 15400. This report informs the IRS that the vehicle was eligible for the credit at the time of purchase and tells the appropriate bean counters whether you claimed the rebate at purchase (an option not available under the previous program) or planned to claim it when you filed your taxes (as was the norm prior to 2024).

But in many cases, dealers failed to report those sales within the three-day period mandated by the feds, leaving buyers in the lurch when their 2024 returns were rejected over the discrepancy.

To clear the logjam, the IRS has taken two steps. For starters, it has rescinded the three-day reporting requirement, allowing dealers to retroactively report eligible sales. Secondly, it is working to register dealers who never bothered to enroll in the portal in the first place, paving the way for their customers to properly claim their credits.

These concessions are welcome, but they do nothing for customers who are stuck with deadbeat dealerships. Even with the reporting window extended indefinitely, dealers must still register for the portal and report their customers’ purchases, and the IRS is not in a position to compel a stubborn dealership to do either. In cases where customers were misled, intentionally or otherwise, there’s not much relief to be found here.

And if you’re stuck on your EV credit paperwork, don’t forget that you can always call the IRS for assistance (800-829-1040). No better place to get the answer than straight from the source!

Got a tip? Send it in: tips@thedrive.com

The post IRS Offers Fix for Dealer Flub That Halted EV Owners’ Tax Returns appeared first on The Drive.