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Millions of Dollars in Potentially Erroneous Qualified Plug-In Electric Drive Motor Vehicle Credits Continue to Be Claimed Using Ineligible Vehicles

September 30, 2019
By Treasury Inspector General For Tax Administration

Thousands of people have falsely claimed electric vehicle tax credits, costing tax payers more than $71 milliion.

The federal government enacted the Energy Improvement and Extension Act of 2008 creating the Qualified Plug-In Electric Drive Motor Vehicle Credit (Plug-In Credit). The American Recovery Act of 2009 later amended the credit for vehicles purchased after December 31, 2009. These credits, of up to $7,500, help taxpayers offset the purchase of a qualifying plug-in electric drive vehicle. The Treasury Inspector General For Tax Administration (TIGTA) office undertood an audit to assess whether the U.S. Internal Revenue Service (IRS) is adequately monitoring Plug-In Credit claims made on federal tax forms determine the extent to which, if any, fraud was being perpetrated upon the public. TIGTA found the IRS does not have effective processes to identify and prevent erroneous claims for the Plug-In Credit. As a result, IRS allowed erroneous claims of approximately 18,000 Plug-In Credits, potentially costing taxpayers more than $82 million.