Consumers Make $33 Million in Errors With Vehicle Tax Credits

A report by SAndra Block of USA Today here states that about 20% of federal tax credits claimed for alternative and plug-in electric vehicles during the first seven months of 2010 were erroneous, costing U.S. taxpayers more than $33 million. The report is credited to the Treasury Department's inspector general for tax administration said Thursday.

The report states that:

"The tax credits are designed to encourage consumers to buy energy-efficient vehicles, such as General Motors' Chevy Volt and the Nissan Leaf, which typically cost more than conventional gas-powered vehicles. The Obama administration recently announced plans to have 1 million advanced-technology vehicles on the road by 2015.

Taxpayers who purchase eligible vehicles can receive a tax credit worth up to $7,500. The inspector general's report found, though, that most of the erroneous credits were claimed for vehicles that weren't eligible for the tax break. Ineligible vehicles owned by taxpayers who claimed the credit included the Hyundai Sonata, the Buick Enclave and a bicycle, the report found."

So what are they going to do about it? Other than try to make the forms easier to read than the ingredients on an OxyElite Pro bottle, it will require VIN numbers on the forms with a new line for new forms. It also appears they are going to try and recover the claims. From the report: "The IRS also plans to recover erroneous claims by reversing credits and conducting audits."

Lovely. Bet you can't wait to get audited.