Skip to main content

Thousands of people lied to the IRS to get EV tax credits on gasoline cars


Car buyers may have claimed more than $70 million in electric car tax credits using ineligible vehicles, Bloomberg reports, citing a report from a United States Treasury Department watchdog. The program awards a tax credit of up to $7,500 for the purchase of new electric cars and lower amounts for plug-in hybrids.

The questionable tax-credit claims were found in 16,510 tax returns from a five-year period through 2018, according to an audit from the Treasury Inspector General for Tax Administration (TIGTA). Returns from almost 240,000 taxpayers were reviewed as part of the audit, encompassing $1.4 billion in credits, according to Bloomberg. Exactly how taxpayers claimed credits for ineligible vehicles was redacted from the version of the audit obtained by Bloomberg, but the audit found that the Internal Revenue Service (IRS) isn’t equipped to identify false claims.

“Although the IRS has taken steps to address some of TIGTA’s previous recommendations to improve the identification and prevention and erroneous credit claims, many of the deficiencies previously identified still exist,” according to the audit.

Auditors made four recommendations to the IRS, which agreed with the findings, according to Bloomberg. The agency will also reportedly undertake a program to recover erroneously issued tax credits.

The credit program was created to jump-start sales of electric cars and plug-in hybrids. As the full credit can virtually erase the price premium electric cars often have over gasoline models, it has become a powerful tool for increasing sales. Some states and local municipalities offer their own incentives alongside the federal tax credit.

The most a car buyer can claim is $7,500, for an all-electric car. Plug-in hybrids qualify for lesser amounts, based on the size of their battery packs. A tax filer’s personal financial situation may also affect the amount of the credit. The amount is also keyed to the number of qualifying cars a manufacturer has sold. Once an automaker reaches 200,000 sales, the credit begins to phase out. Beginning with the second calendar quarter after an automaker hits the 200,000-unit mark, the credit is halved until it disappears entirely.

Tesla was the first automaker to trigger a phase-out of the tax credit, and its electric cars now qualify for a credit of just $1,875. General Motors hit the limit shortly after Tesla, so as of October 1, a new Chevrolet Bolt EV qualifies for the same $1,875 credit as the Tesla vehicles. Tesla’s tax credit will disappear at the end of 2019, while GM has until the end of March 2020.

Editors' Recommendations

Stephen Edelstein
Stephen is a freelance automotive journalist covering all things cars. He likes anything with four wheels, from classic cars…
There’s a huge Black Friday sale on Thule roof cargo boxes
thule rooftop cargo boxes deals amazon november 2023 box on car

It's almost winter, which means snowy day trips and skiing, and if you pack your whole family inside one vehicle, it can be difficult to get the rest of your critical belongings (such as bikes and kayaks) to your destination. In theory, you could buy a larger car. Many families get a minivan for the explicit purpose of relieving this kind of pressure. But that's pretty extreme when you could simply expand the storage space of your current car. And with Black Friday sales like this one, putting dozens of Thule rooftop cargo boxes on big discounts, now is a good time to consider doing so. We're seeing deals were you could save $100 (or even more) or Thule rooftop cargo boxes and accessories. Just tap the button below to access the curated collection, then keep reading for our take in how to shop the sale.

Why you should shop the Thule rooftop cargo box sale
One of the first things we want you to know before you shop the Thule collection is some features that aren't immediately apparent just by looking at the cargo boxes. For example, you may be highly concerned about driving off and having your belongings (including embarrassing items like underwear) go everywhere because the box flies open. Thule boxes, however, typically snap shut with an audible click. You know your items are secure. Alternatively, items like their

Read more
Honda recalls more than 300,000 vehicles over seat belt safety issue
2015 Honda Accord Sport

Honda has recalled more than 300,000 of its 2023-2024 HR-Vs and Accords over a safety issue, according to a document posted by the National Highway Traffic Safety Administration (NHTSA).

The issue concerns a missing seat belt part, which means that in the event of a crash, the belt “will not properly restrain the occupant, increasing the risk of injury,” the NHTSA said.

Read more
How to watch Tesla’s Cybertruck delivery event today
Tesla's Cybertruck.

Tesla CEO Elon Musk behind the wheel of a Cybertruck. Tesla

It’s been a long time coming, but Tesla is about to deliver the Cybertruck to its first customers.

Read more