DIDN’T GET THE $7,500 FEDERAL TAX CREDIT!

[mongo]

This is what I thought. The tax credit is taken at the time of sale, and in traditional dealerships the $7,500 is deducted from the sale. Not sure how Tesla handles this since they don't have a dealership. The dealership applies the credit themselves from the government.

Tesla qualifies as dealer/seller based on IRS/IRA rules. Doesn't need to be every location.
Seller/ registered portal user inputs VIN and buyer SSN into portal. Portal says approved. Seller gives $7,500 to buyer, buyer (usually) gives $7,500 back to seller as downpayment.
IRS credits seller $7,500 within 3? days.

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[cybercricket]

To make such a claim would be tax fraud, plain and simple. There can be no wheels attached to a battery that qualifies for the credit. And good luck getting Tesla to certify it for that purpose and provide the necessary paperwork. Claim it if you want but live knowing that such fraud survives the normal 3-year look back for audit purposes.

The term some people may not understand is "the letter of the law." Where in the USC does it say anything about the wheels ? That's right, it doesn't say anything about the wheels. Where does it say Tesla's "certification" or any paperwork is needed ? Again, doesn't say anything like that. While I'm open to constructive input on the topic, I'd like to discourage people from spreading BS.

 

[mongo]

The term some people may not understand is "the letter of the law." Where in the USC does it say anything about the wheels ? That's right, it doesn't say anything about the wheels. Where does it say Tesla's "certification" or any paperwork is needed ? Again, doesn't say anything like that. While I'm open to constructive input on the topic, I'd like to discourage people from spreading BS.

Yeah, the definitions of the current energy credit are so broad you can drive a Cybertruck through them.
Other sections of tax code are more restrictive.

 

[pricedm]

To receive the commercial EV tax credit ownership can be individual, corporate, partnership, any form of titling. The only requirement is that it be used in a business as a tool of that business. You can by a CT and take the credit personally as long as you have a Schedule C, Schedule F, LLC, even K-1 income from a business in which you actively participate (no passive investments help here). It may be a little “safer” from an IRS perspective to register in a corporate name, but it is not required.

I appreciate this, and #72 from @M0unt41nm4n as I'm over the adjusted MGI $150k income cap for tax year 2024. I have W2 income plus $20k short-term rental business (sole P) and a family "farm" in LLC. Farm consistently records a loss, so I will likely shift my STR to LLC with two members, and then do the S-corp tax route. This should allow me to "game the system" so I can claim $7500 commercial tax credit. Or just quit my W2 job in 2025 and take the "retail" point-of-sale tax credit.

 

[PungoteagueDave]

The term some people may not understand is "the letter of the law." Where in the USC does it say anything about the wheels ? That's right, it doesn't say anything about the wheels. Where does it say Tesla's "certification" or any paperwork is needed ? Again, doesn't say anything like that. While I'm open to constructive input on the topic, I'd like to discourage people from spreading BS.

USC is the controlling legislation but the IRS regs that come later are the specific implementation. The legislation empowers them to do whatever is required to implement the law, including reporting, forms, instructions, etc. In my experience the IRS can get it wrong, and I will "use" the law to ignore forms and instructions, usually with attachments explaining my position.

 

[cybercricket]

USC is the controlling legislation but the IRS regs that come later are the specific implementation. The legislation empowers them to do whatever is required to implement the law, including reporting, forms, instructions, etc. In my experience the IRS can get it wrong, and I will "use" the law to ignore forms and instructions, usually with attachments explaining my position.

I partially agree with you. Congress often delegates implementation details of certain laws to the executive agencies, especially in those contexts where things change rather quickly. One good example of that is the Technology Branch of the ATF, which is enabled to issue opinions that carry the weight of law when it comes to certain "fun things." However, that's not a universal rule. Many laws the Congress is very specific about, and despite those laws intersecting with the regulatory authority of some agencies, those agencies don't have the authority to override the actual laws Congress created. Long story short - it should be looked at on a case by case basis. In this particular situation I don't see how USC is delegating any rule-making authority to the IRS when it comes to the Home Energy credits. As @mongo pointed out there is some vagueness in the text there, but not in the sense that IRS has a say.

 

[mongo]

USC is the controlling legislation but the IRS regs that come later are the specific implementation. The legislation empowers them to do whatever is required to implement the law, including reporting, forms, instructions, etc. In my experience the IRS can get it wrong, and I will "use" the law to ignore forms and instructions, usually with attachments explaining my position.

So then, are you ignoring the forms to force your clients to return excess transfer credit? If so, what is your justification?

In case the truncated URL is causing confusion, the quoted text is from
Topic H — Frequently asked questions about transfer of New Clean Vehicle Credit and Previously Owned Clean Vehicles Credit

...
https://www.irs.gov/newsroom/topic-...it-and-previously-owned-clean-vehicles-credit
Q4. What if a buyer has insufficient tax liability to fully use a transferred credit? (added Oct. 6, 2023)

A4. The amount of the credit that the electing taxpayer elects to transfer to the eligible entity may exceed the electing taxpayer's regular tax liability for the taxable year in which the sale occurs, and the excess, if any, is not subject to recapture from the dealer or the buyer.

 

[yohst]

I try to follow the CyberTruck Owners Forum, but I don’t read everything. All the ads and all the posts are overwhelming.

I use NextDNS, no more ads.

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