Electric drive vehicle credit 8936 decreased/rejected by IRS

[oakwcj]

I just spoke to the IRS to be sure that the letter, form 8936, and my bill of sale for the LEAF that I faxed two weeks ago had been received and associated with my account. I was told that they had, but that it will probably take another six weeks until my case gets reviewed by a human. I said that there was at least one other case of "8936" being transposed to "8396." The agent said that she would report this screwup to her supervisor so that they could investigate how it happened and how they can prevent it from happening again. On the bright side, the IRS pays interest in these situations.

 

[GaslessInSeattle]

... On the bright side, the IRS pays interest in these situations.

You bring up an interesting point, perhaps the IRS is trying to avoid having to pay interest by opening up the cases at a rate they can quickly handle. I have had not a single official correspondence from the IRS since we filed back in mid February. Every time I call they tell me there is no required time table to send me any kind of initial notice and they have no idea if and when I will hear anything, I may just see the deposit in my account any day or not. They are sitting on a lot of our money and it makes me very angry :x !!

 

[tzzhc4]

did anyone with this problem file on paper?

that is to say, are all those in limbo or denied electronic filers?

I filed electronic

 

[tzzhc4]

I'm in the same boat as Ready2plugin. Been almost 2 months since my e-filed tax return was accepted, and it's still being processed. Wonder if we've made it to the FAQ's though.....

Our e-file was help for about 1.5 months before we got the letter about the "adjustment".

 

[thankyouOB]

weatherman found this and posted it way way back in this thread:
Speaking of which... Here's the report from the Treasury Department about the abuses. It's an interesting read:

http://www.treasury.gov/tigta/auditreports/2011reports/201141011fr.pdf" onclick="window.open(this.href);return false;

The way I read the document is that e-filers taking EV, EVSE and other stimulus act credits got added scrutiny.
folks who are concerned about what happened to their refunds should read this memo. it is not short.

 

[oakwcj]

... On the bright side, the IRS pays interest in these situations.

You bring up an interesting point, perhaps the IRS is trying to avoid having to pay interest by opening up the cases at a rate they can quickly handle. I have had not a single official correspondence from the IRS since we filed back in mid February. Every time I call they tell me there is no required time table to send me any kind of initial notice and they have no idea if and when I will hear anything, I may just see the deposit in my account any day or not. They are sitting on a lot of our money and it makes me very angry :x !!

It doesn't work that way. If the IRS doesn't pay a refund within 45 days of the filing of the return, or the due date of the return, whichever is later, it pays 3% interest, compounded daily. For most people, that means that they will pay interest from April 17, 2012, until the refund is issued. If you don't have an urgent need for the money, it's probably better than the interest rate you'd be getting from a bank or money market fund.

 

[JimSouCal]

If you don't have an urgent need for the money, it's probably better than the interest rate you'd be getting from a bank or money market fund.

The prior year I amended my return, the IRS took a long time to pay, and the interest rate was enough to generate a tidy check--which they sent me a form that added to my income *this year*. If what you say is true, the IRS can take their time as far as I am concerned.

 

[oakwcj]

If you don't have an urgent need for the money, it's probably better than the interest rate you'd be getting from a bank or money market fund.

The prior year I amended my return, the IRS took a long time to pay, and the interest rate was enough to generate a tidy check--which they sent me a form that added to my income *this year*. If what you say is true, the IRS can take their time as far as I am concerned.

Yes, they will send you a 1099-INT, because the interest they pay is income to the recipient.

 

[planet4ever]

weatherman found this and posted it way way back in this thread:

Speaking of which... Here's the report from the Treasury Department about the abuses. It's an interesting read:
http://www.treasury.gov/tigta/auditreports/2011reports/201141011fr.pdf" onclick="window.open(this.href);return false;

The way I read the document is that e-filers taking EV, EVSE and other stimulus act credits got added scrutiny.

Not quite right. The three forms they were auditing were 8834 (low speed), 8910 (conversions), and 8936 (that's us). These are all EV credits, not EVSE or "other".

I guess that's why my refund sailed right through and I got it in three weeks, despite submitting a paper return. I leased, so I only applied for the Form 8911 EVSE credit.

Ray

 

[Ellen]

This is shaping up to be an interesting tax year for those of us who bought Leafs last year.

We e-filed on the filing deadline, claiming the credit and showing an overpayment (for a lot less than $7500), which we asked to be applied to 2012 estimated tax.

The IRS responded in May to inform us that they had no record of estimated tax payments for 2011, so we owed tax and penalties. Since then, they found the estimated tax payments, and on June 8 they issued a refund check for the very same amount that was supposed to be applied to estimated tax, plus interest.

The very same day that the IRS issued the refund check, they also generated an Income Tax Examination Report that has many pages of calculations, and that concludes with the pronouncement that we underpaid $7500 in tax and now owe the IRS that amount, plus interest. The report appears to indicate that we didn't file Form 8936 (although it's definitely part of the package of "for your records" forms generated by TurboTax), and the IRS is now requesting a copy of the sales contract and manufacturer's certification that the vehicle qualifies.

I'm not looking forward to the next conversation with the IRS, as we now have to sort out both the issue of the estimated tax and the problem related to this tax credit -- and I'm wondering if there will be any more letters from the IRS in the coming weeks.

PS - One page in the Examination Report is entitled "Other Credits Not From Form 3800, 8396, 8801, 8859". That's the page that says we don't qualify for the EV credit. I had to read it several times to figure out that it's not an error -- it refers to credits NOT on form 8396. The IRS didn't transpose the digits, but the similarity of the two numbers sure is confusing the rest of us.

 

[GaslessInSeattle]

we filed back in February and have yet to get a single official piece of communication from the IRS about our return. Each call I've made results in a totally different story to the point where I've stopped calling and am trying to not think about it. The long and short of it seems to be that we are or are likely about to be selected for "examination". As of this year they have 120 days from the time they acknowledge receipt of the return to issue a formal response, yep, that's 4 months, which for us should mean that we will either get examined or get our refund by the end of July. calls from our CPA, our congressman and ourselves have resulted in zilch. We are being much more careful this year to not overpay our taxes!!!!!!!!!!!!!

 

[JimSouCal]

we filed back in February and have yet to get a single official piece of communication from the IRS about our return. ... As of this year they have 120 days from the time they acknowledge receipt of the return to issue a formal response, yep, that's 4 months, which for us should mean that we will either get examined or get our refund by the end of July. ...

Same here. I just have not bothered to call them. Thankfully, this years return on my end was straightforward so any audit should be easy--likely a paper audit that just means documentation... Or then again a check may just show up.

I have this passing thought that there may be a number of intentionally fraudulent claims taking the EV credit as a form of protest. Not a lick of fact, but it did occur to me...

 

[mwalsh]

With respect to this (and probably with a whole bunch of other stuff too) the IRS clearly has no clue what they're doing. :?

 

[TEG]

Wow, reading this thread I am glad that mine went through fine.

I used TurboTax, and e-Filed with the 8936 credit. The refund had come through as expected without any problems.

I don't recall exactly when I filed but it was around March, and I got the direct deposit refund back within a month.

 

[Ready2plugin]

Wow, reading this thread I am glad that mine went through fine.

I used TurboTax, and e-Filed with the 8936 credit. The refund had come through as expected without any problems.

I don't recall exactly when I filed but it was around March, and I got the direct deposit refund back within a month.

Glad to see it worked for some. I filed the same way and still "in process". I did the "Audit Defense" with TurboTax for the first time, hopefully I will not have to use it.

 

[LTLFTcomposite]

I have this passing thought that there may be a number of intentionally fraudulent claims taking the EV credit as a form of protest. Not a lick of fact, but it did occur to me...

Protest likely has nothing to do with it. In tax year 2009 they were offering up to $8k credit for first time home buyers. Funny thing happens when you offer up a form that basically says "here fill this out and we'll send you 8 grand"... tons of fraud, you can bet it's happening again on this. Just like the visa cash cards after Katrina, people won't hesitate to get in line for free money.

 

[thankyouOB]

I have this passing thought that there may be a number of intentionally fraudulent claims taking the EV credit as a form of protest. Not a lick of fact, but it did occur to me...

Protest likely has nothing to do with it. In tax year 2009 they were offering up to $8k credit for first time home buyers. Funny thing happens when you offer up a form that basically says "here fill this out and we'll send you 8 grand"... tons of fraud, you can bet it's happening again on this. Just like the visa cash cards after Katrina, people won't hesitate to get in line for free money.

and all those farmers who say they grow soy beans.

 

[davewill]

... "here fill this out and we'll send you 8 grand"... tons of fraud, you can bet it's happening again on this. Just like the visa cash cards after Katrina, people won't hesitate to get in line for free money.

I was surprised when I heard that the form didn't require VIN and proof of purchase/registration to cut down on the fraud. I guess that wouldn't work well with eFile.

 

[GaslessInSeattle]

We've actually passed on the invoice through the advocate and still nothing.

... "here fill this out and we'll send you 8 grand"... tons of fraud, you can bet it's happening again on this. Just like the visa cash cards after Katrina, people won't hesitate to get in line for free money.

I was surprised when I heard that the form didn't require VIN and proof of purchase/registration to cut down on the fraud. I guess that wouldn't work well with eFile.

 

[mwalsh]

... "here fill this out and we'll send you 8 grand"... tons of fraud, you can bet it's happening again on this. Just like the visa cash cards after Katrina, people won't hesitate to get in line for free money.

I was surprised when I heard that the form didn't require VIN and proof of purchase/registration to cut down on the fraud. I guess that wouldn't work well with eFile.

It did require VIN. I remember imputing it.