Audit Reveals EV Tax Credit Abuse

Blaming lack of adequate oversight procedures on the part of the Internal Revenue Service, government auditors are reporting that one-fifth of the plug-in electric and alternative motor vehicle tax credits claimed in the first half of last year weren’t deserved.

The Treasury Inspector General for Taxpayer Administration said some 12,920 taxpayers filed claims in the period analyzed, January 1 to July 24. About $33 million of the $163.9 million in credits was bogus because taxpayers “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.” It didn’t amount to a huge sum of money, but the audit also included the startling fact that “approximately 29 prisoners also received $49,926 in vehicle credits even though they were in prison all of Calendar Year 2009.”

image via Tesla Motors

The government offers tax credits of up to $7,500 on the purchase of electric vehicles and plug-in hybrids, as well as credits for other alternative-fuel vehicles.

The agency said its audit was undertaken per requirements of the Recovery Act. It recommended that the IRS take steps to recover erroneous credits and develop procedures to disallow credits in the future through “a coding system to identify vehicle makes and models or (by requiring) the Vehicle Identification Number on the forms used” to make the claim.

Pete Danko is a writer and editor based in Portland, Oregon. His work has appeared in Breaking Energy, National Geographic's Energy Blog, The New York Times, San Francisco Chronicle and elsewhere.