Erroneous claims for vehicle tax credits cost U.S. taxpayers over $33 million

Article by Christian Andrei, on February 8, 2011

After determining that 20% of the claims for federal tax credits for alternative and plug-in electric vehicles in the first seven months of 2010 were erroneous, the Treasury Department's inspector general for tax administration said that this cost U.S. taxpayers over $33 million.

These tax credits were put in place to urge consumers to buy energy-efficient vehicles, such as General Motors' Chevy Volt and the Nissan Leaf, which are priced higher than conventional gas-powered vehicles.

Recently, the Obama administration revealed plans to have 1 million advanced-technology vehicles on the road by 2015. Taxpayers who buy eligible vehicles can get a tax credit of up to $7,500.

The inspector general's report found that most of the erroneous credits were claimed for vehicles that weren't even eligible for the tax break.

The report said that among the vehicles claimed that were not eligible for the credit included the Hyundai Sonata, the Buick Enclave and a bicycle. In addition, the report discovered that 29 prisoners received a total of $49,926 in vehicle credits even when they were in prison at the time they claimed them.

The report said the IRS doesn’t have sufficient procedures to make sure that information given by individuals claiming the credits met qualifying requirements for vehicle year, placed-in-service date, and make and model.

In the inspector general's review of electronically filed tax returns, individuals who erroneously claimed the same vehicle for multiple plug-in electric and alternative motor vehicle credits or claimed an excessive number of vehicles for personal use credits were also named. [via USAToday]

Topics: united states

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