Electric Vehicle Tax Credit Scheme for Wealthy Spurs Massive Fraud on IRS

‘Despite recognizing this fraud eight years ago, it has not only persisted but become even more widespread…’

30 Free Market Groups Urge Congress Not to Expand Electric Vehicle Subsidies 1

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(Joshua Paladino, Liberty Headlines) Sixteen Republican senators sent a letter to IRS Commissioner Charles P. Rettig on Monday for information regarding to enforcement of the widely abused electric-vehicle tax credit.

The letter follows a September 2019 audit report by the office of the Treasury Inspector General for Tax Administration (TIGTA) that revealed $72 million in fraudulent claims for the electric-vehicle tax credit.

The report also found that the IRS does not have an “effective processes to identify and prevent erroneous claims,” according to the letter.

Sens. James Lankford, R-Okla.; Ron Johnson, R-Wisc.; Chuck Grassley, R-Iowa; John Barrasso, R-Wyo.; and Jim Inhofe, R-Okla., wrote the letter, which cited long-running incompetence at the IRS regarding electric vehicle tax subsidies.

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“Notably, in 2011, TIGTA released an audit finding $33 million in tax credits for plug-in electric drive motor vehicles—one in five of every claimed tax credit—were awarded to individuals who owned vehicles that did not qualify,” the senators wrote. “In other words, despite recognizing this fraud eight years ago, it has not only persisted but become even more widespread.”

Since the electric vehicle tax credit serves as a subsidy for wealthy Californians and is prone to abuse, President Donald Trump assured that Congress’s 2020 spending bill did not expand the program.

The senators asked the IRS to provide information about the “total number and dollar amount of electric vehicle tax credits claimed, broken down by state and household income” and about the fraudulent claims.

They asked whether the IRS had performed an audit of the program, and, if it has, to provide a report on the audit to Congress.

TIGTA’s audit recommended that the IRS implement a system to either “identify vehicle makes and models or require the Vehicle Identification Number on forms used to claim” the electric vehicle tax credit.

The senators requested information related to the implementation of this verification system.