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My 2010 IRS tax refund arrived, but the $7500 Volt credit had been "adjusted" away!

28K views 44 replies 20 participants last post by  fishhawk 
#1 ·
My 2010 IRS tax refund arrived, but the $7500 Volt credit had been "adjusted" away!

My federal income tax refund for 2010 was credited to my bank account on
March 11th, but it was $7500 lower than I expected it to be. Coincidentally
$7500 is the amount of the "Qualified Plug-in Electric Drive Motor Vehicle
Credit" I claimed for purchasing a Chevy Volt in December.

I called the IRS and waited on hold for about half an hour. What she said
was that an "adjustment" of $7500 had been made on line 53 of form 1040,
which is the plug-in credit line. The adjustment was made "in process," she
said, whatever that means.

She couldn't tell me why the $7500 was adjusted away. All she could tell
me is that a notice is scheduled to be sent to me on March 21st that will
give some kind of explanation and a person's name I should be able to
contact. She was unable to divulge the contents of this notice, nor tell
me anyone I might be able to contact before I receive the notice.

The Volt is indeed included on the IRS's list of qualifying vehicles at
http://www.irs.gov/businesses/article/0,,id=219867,00.html so I'm not
sure why it would be disallowed. (I did spell "Chevy," not "Chevrolet"
or "General Motors," on the form—please tell me that wasn't it.)

I wonder if this might have something to do with the plug-in tax credit
abuse story that hit the newspapers and TV news last month. (See
http://news.yahoo.com/s/ap/20110203/ap_on_re_us/us_electric_cars_tax_credits - "The IRS
said it was 'taking aggressive steps to recapture the credits people
erroneously claimed.'")

Is anyone else having similar trouble? This is very frustrating.
 

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#2 ·
Bummer - hope it does get worked out.

This is why it should only be credited at the point of purchase and not rely on the taxpayer to endure the stresses and errors that are the IRS annual tax process.
 
#4 ·
Which might be another plus for the lease???

My accountant figured my rebate based on my 2010 return and it would only be $5200.
 
#7 · (Edited)
#9 ·
Only aplying it to taxes not paid and not to tax over paied dosent make sense.

But the news story angle may, as they may now require that your include a copy of your purchase proving it was purchased as new and not as used or leased (see some other posts about this to prevent multipule calims) as proof, so may be the March 31st letter will be requesting a proof of your actual new purchase.
 
#10 ·
they may now require that your include a copy of your purchase proving it was purchased as new and not as used or leased (see some other posts about this to prevent multipule calims) as proof, so may be the March [21st] letter will be requesting a proof of your actual new purchase.
That's what I was thinking, but a few people on the GM-Volt forums have reported receiving the $7500 credit, so now I don't know what to think.
 
#11 · (Edited)
I received my refund on 3/18 and indeed it was $7500 lighter than I expected. I checked the IRS website and it said that I would be getting a notice on why the discrepancy. From all I see on my return, I certainly am eligible for the credit, but let's see what the IRS says. Hmmmmm......

Volt 63

Update 3/21.... I called the IRS this morning and they were able to confirm what I already know. They said that I'll need to wait until I receive my notice to see what the real issue is. Per the web site, my notice will be dated 3/28. What a bunch of CRAP! VERY frustrating!!
 
#14 · (Edited)
My letter from the IRS arrived today. Here's what it says:
We have disallowed the amount claimed as Qualified Plug-in Electric
Drive Moter Vehicle Credit on line 53 of Form 1040. To qualify for
the credit, your vehicle must have been placed in service after
December 31, 2008 and before January 01, 2010.
Now obviously my vehicle was put into service after January 2010
(In fact it was December 2010) but a $7500 credit is supposed to
apply, right? Could I have claimed the credit on the wrong form?

I used form 8936 ("Qualified Plug-in Electric Drive Motor Vehicle Credit")
and the title of the form is exactly the same as mentioned on this
page on the IRS web site at http://www.irs.gov/businesses/article/0,,id=219867,00.html
which lists the 2011 Chevrolet Volt as a qualifying vehicle.

What the heck?
 
#15 ·
IRS Form 8834 vs. Form 8936

I did find a couple of web sites that explain how to fill out form 8834, not 8936.

  • 8834 - Qualified Plug-in Electric and Electric Vehicle Credit
  • 8936 - Qualified Plug-in Electric Drive Motor Vehicle Credit

If you look at the two forms, they are very similar. At the top of each form are some notes that explain when to use the other form:

  • 8936 says "Claim the credit for certain two- or three-wheeled or low-speed four-wheeled plug-in electric vehicle on Form 8834."
  • 8834 says "Claim the credit other plug-in electric vehicle on Form 8936."

So I don't think it would have been correct to claim the Volt credit on form 8834, even though the instructions say it is for vehicles acquired after February 17, 2009, and before January 1, 2012. (Form 8936's instructions don't mention any acquisition date requirements, though vehicles acquired before 2010 have slightly different qualification rules than those acquired after 2009.)

The text at http://www.irs.gov/businesses/article/0,,id=219867,00.html matches the title form 8936, and form 8834 keeps using 2-wheel/3-wheel/low-speed terms which do not apply to the Volt.
 
#19 · (Edited)
did you figure out the problem? Some people are getting the credit and some people are not (at least not at first pass). 7500 is nothing to scoff at, so I'm sure you and others must be doing some probing to find out the situation?
Now that we have actually received the notice from the IRS, I was actually able to discuss it with them.

The first time I called, the first person transferred me to a tax law person, but that person soon hung up on me. (See footnote 1.)

The second time I called, the first person could discuss things with me without transferring me to someone else. She listened to what I had to say and said I should send a letter to the IRS with:
Then I must wait up to 30 days for a response. I was hoping for better, but what can ya do?

--

footnote 1: The first tax law person hung up on me ostensibly because I was abusive. However I do not believe I was. The thing is, I'd guess 90% of people who think they weren't abusive but get hung up upon probably actually were abusive, so my claim that I wasn't doesn't carry much weight, does it? All I can say is that I never raised my voice, I didn't utter insults or profanity, and I didn't consider this one rep responsible for the IRS's error.
Evidently all phone calls are recorded, so I did ask the second rep to flag the first call for review by a supervisor. I'm not sure why I did this since it wasn't a big deal, though I would have preferred not to have had to wait another half-hour on hold when I called back.

footnote 2: Evidently the form 8936 I filed wasn't scanned into the IRS's system, even though the rest of the forms I filed were. This is why I have to mail in a copy of the form anew. When I asked why form 8936 would have been omitted from the scanning process, the rep said that "the new system" was supposed to scan every form filed. (The presumption here is that the old system didn't always do this, which seems weird, but I didn't follow up on this.) I don't know if my return was scanned with the new system or the old one.
 
#22 ·
I submitted my returns in mid-February. I used Turbo-Tax, but had to mail the forms in because of the Alternate Energy Refueling Credit. I made sure I waited to be certain I had the latest forms. I downloaded all from the IRS website. Is there a lesson here somewhere?
 
#23 · (Edited)
My tax preparer (my wife) used Form 8910 Alternate Motor Vehicle Credit to apply for the credit. We haven't filed yet, but she is a professional tax preparer, so I'm assuming Form 8910 will work.

Edit: After reading the instructions for Form 8910, it looks to me like 8936 should be the form to use. I'll have "my preparer" check for sure.
 
#30 ·
My tax preparer (my wife) used Form 8910 Alternate Motor Vehicle Credit to apply for the credit. We haven't filed yet, but she is a professional tax preparer, so I'm assuming Form 8910 will work.
I think 8910 is for traditional (not plug-in) hybrids. Also I believe that credit has expired for most manufactures (see, I think, http://www.irs.gov/newsroom/article/0,,id=157632,00.html).


When did you submit your taxes?
I mailed mine on February 8th.

I essentially did them by hand. For form 8936 I downloaded the IRS's pdf (the finalized version), filled in the blanks in the reader app, then printed it out.
 
#25 ·
So I'll be trying to claim the credit next year (as will many others here I'm sure). I'd like to get something straight, if anyone can provide insight. Let's say I make 100,000 per year and typically get a 1500 tax refund. Will I be able to get the credit?

One thing I may do is when I do my taxes in the upcoming week is to do a version of the taxes where i claim the credit just to see what TurboTax calculates. However, I was wondering what others peoples take is given the parameters above.

Reason I (and perhaps others) need to know now is that if I need to be "in the red" to get the full benefit of the credit then I need to do some things to put myself in the red (such as getting my employer to withold less from my paychecks).

Disclaimer - Yes I realize that anyone answering this question is not providing tax advice, but is rather providing an opinion or personal guess and any losses I incur from following their opinion/guess are my sole responsibility.

Thanks in advance.
 
#27 ·
Let's say I make 100,000 per year and typically get a 1500 tax refund. Will I be able to get the credit?
You get credit from your tax liability of $7500. If your total tax liability is less than $7500, you can only get credit for up to your liability. It doesn't matter what your refund was going to be in the first place, just on how much your total liability is.

So GE (which is reported to have paid $0 in federal taxes last year) shouldn't be able to get the credit.
 
#28 ·
Received 7500 Tax Credit

I received my tax credit today (4/1/2011), all $7,500 of it, deposited into my bank account. I did my taxes with Turbo Tax and inputted the info as turbo tax wanted it. I paper filed and sent it in 3/8/2011. I purchased VIN #567 on December 28, 2010, and took delivery Jan 6, 2011.
Les
 
#31 · (Edited)
I received my tax credit today (4/1/2011), all $7,500 of it, deposited into my bank account. I did my taxes with Turbo Tax and inputted the info as turbo tax wanted it. I paper filed and sent it in 3/8/2011. I purchased VIN #567 on December 28, 2010, and took delivery Jan 6, 2011.
Les
My refund was the same; $7500. Except purchase was 12/27 and took delivery 1/12/11. Since I paid the sales tax on 1/10/11 I did not claim that on my 2010 taxes. The reason was I would not reach the full $7500 rebate if I used that deduction. The IRS would not accept my electronic filing so I had to file by snail mail. I kept watching for a refund check and was surprised when I started to do my bill paying that the refund had been deposited in my checking account. I don't remember giving them my account number, but must have, maybe when I was trying to file electronically.

The reason they gave for not accepting my electronic filing was that there was a disconnect between my filing info and the Social Security data base. I called SS and asked them to check for the reason. Seems my wifes birthdate was off by one day. In checking they said at one time it was right in their files but had been changed, probably when they were digitizing their microfiche files. But get this, they could not correct it without my wife coming to their office with her proof of birth and current drivers license. I fully expected her SS to be withheld this month since we massaged the system but it did get deposited; Murphy must have been asleep.
 
#34 ·
Excellent News!!! Today, my Dealer, Ourisman Chevrolet in Bowie, MD delivered the check for my Maryland Excise Tax Credit! A FULL $2K! Ourisman continues to be a pleasure to deal with.

On the Federal Front, I have appealed to the IRS for the 2010 $7500 Tax Credit for the Volt. I have re-sent the IRS Form 8936 with a letter of explanation by certified mail. They've since received it, but I don't know what the next step will be. "Patience Grasshopper!"

We'll see.....

Volt 63
 
#36 ·
status update

I called the IRS today. They say, "We're working on it, call back in late May."

I sent in my response to the CP12 on March 29, so today was a couple days
shy of the 30 days in which they are supposed to respond. The guy I talked
to says it will take 8 weeks, though, hence his advice to call back in late May.

He did say what the previous reps have said, which is that they have no
record that I ever filed the form 8936 with my return. They have scanned
copies of all the other forms, but not the 8936.

The rep I talked to today seemed to be presuming that I simply did not send
the 8936 with the rest of my return. I don't think this is likely, though, or else
the CP12 would have said something like "you claimed a $7500 credit but we
don't know why," when in fact it said "We have disallowed the amount claimed
as Qualified Plug-in Electric Drive Moter Vehicle Credit on line 53 of Form 1040.
To qualify for the credit your vehicle must have been placed in service after
December 31, 2008 and before January 01, 2010.
" (I should have pointed this
out during today's call, but I doubt it would have helped my cause any.) My theory
is that the person who is responsible for issuing the CP12 somehow neglected to
scan my form 8936 into the system.
 
#37 ·
I don't know what the cp12 your talking about is BUT in had the exact same thing happen to me. I checked where's my refund and it said that I was only getting some of my money back. In called the IRS and they told me that I miss calculated me refund. After a very long investigation ( going over line by line of my return) it turns out that the IRS totally ignored the 8936 and for some reason took it off my 1040. I had to resend everything and finally got my money last week. Very frustrating!
I called the IRS today. They say, "We're working on it, call back in late May."

I sent in my response to the CP12 on March 29, so today was a couple days
shy of the 30 days in which they are supposed to respond. The guy I talked
to says it will take 8 weeks, though, hence his advice to call back in late May.

He did say what the previous reps have said, which is that they have no
record that I ever filed the form 8936 with my return. They have scanned
copies of all the other forms, but not the 8936.

The rep I talked to today seemed to be presuming that I simply did not send
the 8936 with the rest of my return. I don't think this is likely, though, or else
the CP12 would have said something like "you claimed a $7500 credit but we
don't know why," when in fact it said "We have disallowed the amount claimed
as Qualified Plug-in Electric Drive Moter Vehicle Credit on line 53 of Form 1040.
To qualify for the credit your vehicle must have been placed in service after
December 31, 2008 and before January 01, 2010.
" (I should have pointed this
out during today's call, but I doubt it would have helped my cause any.) My theory
is that the person who is responsible for issuing the CP12 somehow neglected to
scan my form 8936 into the system.
 
#41 ·
On May 20, 2011, the IRS sent me a letter
Thank you for your correspondence received Apr. 02, 2011.

We haven't resolved this matter because we haven't completed all the
research necessary for a complete response. We will contact you
again within 45 days to let you know what action we are taking. You
don't need to do anything further now on this letter.
Then today I received another letter (dated June 7, 2011)
Thank you for your amended return.

We have adjusted your account as you requested.

If you need forms, schedules or publications to respond to this
letter, you can obtain them by visiting the IRS website at www.irs.gov
or by calling 1-800-TAX_FORM (1-800-829-3676).

If you used a preparer to complete your return, and you do not have
an authorized power of attorney on file, please provide the preparer
with a copy of this letter and the corrected form 1040X. Inform the
preparer that we replied directly to you.

If the adjustment results in a refund and you don't owe any other
taxes or other legal debts that we are required to collect, you will
get a refund of your overpayment in four to six weeks.
So they amended my return somehow, to what end I don't know.
(I never sent in a "corrected form 1040X," of course, but only a copy
of form 8936 to replace the one they lost when processing my return.)

They included a second page, which at first I thought would detail which
numbers on which forms had been changed, but it is actually an exact
copy of the page I quoted above—odd.

So dare I hope they did things correctly and see what happens in 4-6
weeks, or do I need to call and wait on hold to verify that they plan to
send me $7500?
 
#42 ·
So dare I hope they did things correctly and see what happens in 4-6
weeks, or do I need to call and wait on hold to verify that they plan to
send me $7500?
Actually, upon checking my bank account, it seems that $7543.69 was credited a few days ago.
I'm not sure why they would say 4-6 weeks, then, but I'm not complaining.

What the extra $43.69 is for, I can't say. (I didn't think the IRS paid interest.)
 
#44 ·
WOO-HOO!! The IRS just deposited my complete refund as well. Better late than never. Thanks to all the GM-Volt.com contributors for their information and assistance. We early adopters are taking big risks in buying a new Volt, but with all the info you guys provide, it sure makes the ride easier!

Now,...off to lower that car payment!!

Volt 63
 
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