Good Bye $7,500 tax credit!

[whitex]

Let's be honest with ourselves here.

Those of us who can afford 100-200K sportscars need that subsidy less than those in the 30-50K market.

Define "need", because one could easily argue that nobody in the market for a Taycan as a daily commuter needs anything fancier than a Nissan Leaf.

If the purpose of the subsidy is to encourage electrification, there should be no income cap. I see limiting incentives to domestic manufacturing if that's the goal, but income cap or price cap makes no sense in that case. Price cap makes sense if the goal is to incentivize cheap EV's. The only way income cap makes sense is if the purpose is to help poor people get cars, but then there should be just a handout to poor people, the poorer the more they get, for any car they buy (no price caps, or even EV restriction).

I find it ironic they called it the Inflation Reduction Act. I guess the current administration economists believe that the way to fight inflation is to pump billions of free money into the economy. Scary for this kind of thinking to come from an administration in power. On the "bright side", think of all the additional IRS audits they will be able to perform, now that this bill is doubling the the IRS budget. I know, I know, the Democrat's message is that all those agents are only to go after billionaires, yea right. I can almost guarantee most people claiming binding contract and delivery next year, will automatically trigger an audit of their taxes, if for no other reason but for the fact that IRS will have over 100,000 new-hire agents, brand new, needing some simple audits to perform to train on, but of course with a quota to justify their paycheck. Denying $7,500 credits sounds like very low hanging fruit.

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[Tooney]

Those of us who can afford 100-200K sportscars need that subsidy less than those in the 30-50K market.

Re: need
"From each, according to his ability, to each, according to his need."

 

[Kayone73]

On the "bright side", think of all the additional IRS audits they will be able to perform, now that this bill is doubling the the IRS budget. I know, I know, the Democrat's message is that all those agents are only to go after billionaires, yea right. I can almost guarantee most people claiming binding contract and delivery next year, will automatically trigger an audit of their taxes, if for no other reason but for the fact that IRS will have over 100,000 new-hire agents, brand new, needing some simple audits to perform to train on, but of course with a quota to justify their paycheck. Denying $7,500 credits sounds like very low hanging fruit.

If your assertions on the IRS budget/hiring boost is true, your reasoning is not unsound and falls in line with the way a large government institution functions.

1. I'm glad I was able to already claim my full EV tax credit on my 2021 taxes

2. The 'binding purchase agreement' I obtained on my Rivian R1S order may just end up in the bin as I do a pretty aggressive (but as far as I can tell legal) tax planning strategy since I run my primary income thru a personal corporate entity first and maximize all the tax deductions I have access to.

I am fine with not inviting an unwanted IRS audit on my next year's tax returns

 

[fgwinn]

...Denying $7,500 credits sounds like very low hanging fruit.

Since audits will take place a couple of years after the relevant tax return the amount "returned" will be increased by interest and penalties. I could see the IRA assessment being closer to $10K.

 

[whitex]

Since audits will take place a couple of years after the relevant tax return the amount "returned" will be increased by interest and penalties. I could see the IRS assessment being closer to $10K.

Cases like this I'm sure will be used as proof that doubling the IRS budget was a good "investment" and a win for the majority of American people (since majority of US citizens pay no federal income tax at all - 61% in 2020, 57% in 2021). Perhaps making the EV rebate rules ambiguous is done on purpose, provide the IRS new-hires with training audits, get people to buy EV's, claw back the incentive, and make some money on penalties and interest. Genius!

 

[Kayone73]

Cases like this I'm sure will be used as proof that doubling the IRS budget was a good "investment" and a win for the majority of American people (since majority of US citizens pay no federal income tax at all - 61% in 2020, 57% in 2021). Perhaps making the EV rebate rules ambiguous is done on purpose, provide the IRS new-hires with training audits, get people to buy EV's, claw back the incentive, and make some money on penalties and interest. Genius!

The conspiracy side of my brain wants to agree with you.

 

[malogos]

Does "binding purchase agreement" include a deposit to be on a waiting list for an allocation (but no actual allocation)?

edit, based on https://www.irs.gov/businesses/plug-in-electric-vehicle-credit-irc-30-and-irc-30d, the answer is no.

 

[bosbruce]

Well based on the FAQ from the IRS, if you submitted a non-refundable deposit with your dealer then you’re covered under transitory status into the new law, so you’ll be able to take advantage of the tax credit. Good news for some, not for all.

https://www.irs.gov/businesses/plug-in-electric-vehicle-credit-irc-30-and-irc-30d

I did submit a > 5 % non-refundable deposit months back but was too busy taking daughter to college last week to notice this new bill had one key bit taking effect immediately. I am not 100% clear that this meets the full requirements as per IRS IRC 30D ... It seems to ... anyone talk to a tax expert and fully convinced this will work ? : For example, if a customer has made a non-refundable deposit or down payment of 5 percent of the total contract price, it is an indication of a binding contract. If my dealer had been paying attention last week I could have signed a proper non-binding contract as Lucid and others were pushing people to do... Absurd that this new law has 1 component screwing all foreign EV manufacturers with so little warning and IMO everything should be made active 1/1/2023 ...

 

[bosbruce]

Let's be honest with ourselves here.

Those of us who can afford 100-200K sportscars need that subsidy less than those in the 30-50K market.

Agreed, but for me I plan on keeping the Taycan 4S for a year and losing that $7500 would be enough for me to not throw money out on the luxury sports car I don't need.

 

[Tooney]

Biden Administration Promises to Review New EV Credit Impact on South Korea

 

[buhhy]

Woohoo the 30C EVSE tax rebate is back! Up to $1000 of tax credit for personal EVSE installations until 2032.

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