Approximately 20 percent of U.S. tax credits for green cars were erroneously claimed, a government audit reported.
According to Bloomberg, non-qualifying vehicles like the Buick Enclave and Hyundai Sonata were erroneously granted tax credits. The tempting federal tax credit amounting to $ 7,500 for plug-in and alternative-fuel vehicles enticed some taxpayers to file for claims even if their vehicles did not qualify for tax refund.
The estimated 20 percent of erroneous tax credit is equivalent to about $ 33 million, an approximate amount that was claimed during the first half of 2010 by taxpayers who weren’t eligible to be granted such amount of money from the Internal Revenue Service, the Treasury Inspector General for Tax Administration reported.
“While IRS management did take corrective actions to reduce erroneous claims when TIGTA brought these process weaknesses to its attention, more clearly needs to be done,” stated Inspector General J. Russell George.
Even with the erroneous credits, the IRS is firm in disagreeing with auditors’ recommendations and will not automatically reject credit claims for non-qualifying vehicles. The agency will instead take the necessary precautions and measures to ensure accuracy in the application process for claims. IRS will also take action and recapture the erroneously claimed credits from taxpayers.
According to IRS spokesman Grant Williams, “The IRS took immediate action to put additional protections in place to stop improper vehicle payments. We are also taking steps to recapture the credits people erroneously claimed.”
In an effort to have 1 million technologically advanced vehicles by 2015, the Obama administration approved the $ 7,500 tax credit. All plug-ins, like the Nissan LEAF and Chevrolet Volt, and alternative-fuel vehicles qualify for the federal tax credit.
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