In the U.S., thousands of car buyers may have erroneously received more than $70 million in tax credits for plug-in hybrids and electric cars – even though their vehicle was not actually eligible. An audit report has now revealed several loopholes in the scheme that could affect over 16,000 tax returns from 2014 to 2018.
The previous government under Barack Obama had initiated the scheme as a sales incentive. Buyers of PHEV and BEV who were admitted after 31 December 2009 were to receive a tax credit of up to $7,500. The audit found that the US Internal Revenue Service (IRS) lacks an effective process to prevent imporper claims under the programme: “Although the IRS has taken steps to address some of TIGTA’s previous recommendations to improve the identification and prevention of erroneous credit claims, many of the deficiencies previously identified still exist.”
A plan to start a programme to recover the erroneous credits “among other steps” is already in motion, following four recommendations made to the IRS by the Treasury watchdog.
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