Senate Bill Deal to Expand EV Tax Credits (7/27/2022)

[voxel]

Not necessarily. I mentioned in another thread but the beginning sentences before the example is very important.

"the enforceability of a contract under State law is a facts-and-circumstances determination to be made under relevant State law"

The IRS gave a lawyerly answer. "It depends" on applicable state law. What might be binding in one state might not be binding in another state.

This was discussed in a different forum and I think there are many caveats. Since direct sales are banned in a few states... how binding are these contracts in those states? Even if the state law allowed the small deposit as a "binding agreement" - you are agreeing to something not permitted in that state. And I think CA (where Fisker and Rivian are based) has some strict non-refundable deposit rules.

This entire transition rule is a giant clusterfudge.

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[xaudiblex]

The states have pretty similar law when it comes to this sort of thing. I don’t think it will make much difference in the end what state someone happens to be in. Just speculating here.

Honestly, it makes a world of difference. Regarding contracts, most states follow some form of the UCC model rules. Some states can adopt more of the UCC and some states can adopt less of it. It is all up to each states respective court to decide how flexible they want to be when interpreting a definition of a binding contract. This is often one of the factors a large fortune 500 company will consider when deciding to chose to incorporate in one state versus another.

 

[Shelbeast]

Exactly! Had this convo with my GF. I say go all in or STFU.

 

[Shelbeast]

Exactly Brother. I have asked climate scientists and their followers to show my observable facts. I get none except insults.

I always find out who the founder of each Green initiative company that comes out. It always leads me to Corp. owners who are biggest polluter (hypocrite).

 

[Mach1E]

This isn't getting around the law though, since they put the binding contract exception right into the law making it legal. They just didn't bother to tell people what qualified as a binding contract.

This is more paramount to creating a speeding law without telling anyone what the actual speed limit was, leaving them guessing until they get a ticket. By then it's too late.

That’s fair.

But it was definitely intentional.

They clearly didn’t want people driving the “old speed limit.”

 

[Mach1E]

Exactly Brother. I have asked climate scientists and their followers to show my observable facts. I get none except insults.

I always find out who the founder of each Green initiative company that comes out. It always leads me to Corp. owners who are biggest polluter (hypocrite).

To be fair, there are observable facts.

But what you’re asking for are exact specifics, and that’s going to be difficult if not impossible.

It’s like (and is) predicting the weather.

Just because the weatherman can’t tell you with absolute certainty that it’s going to rain at your house today, doesn’t mean there is no validity to weather reporting. Knowing if there is an 80% chance of rain today vs 10% tells me if I should go to the beach.

With climate? We know with absolute certainty at this point that carbon emissions (greenhouse gases) are manmade. We know what effect they have. We know how much we pollute. And we know it contributes to warming. We also know if we reduce them “it’ll help” slow the warming trend.

Now how much exactly? It’s not exact. The answer is “some.”

But just because you’re not responsible for all the trash in the ocean, doesn’t mean you shouldn’t remove “some.”

I’m not going to dedicate my life to removing trash. And I’m not going to yell at people and try to scare them about ocean trash. But I’m willing to not throw extra garbage in the ocean.

 

[dbsb3233]

That’s fair.

But it was definitely intentional.

They clearly didn’t want people driving the “old speed limit.”

I'm still not quite sure how much was intentional vs how much was incompetence, but it doesn't really matter. Both are equally bad and it's the same result either way.

It's actually insulting to include this exception in the law (like they're doing people a favor) but then make it virtually impossible to use (by not telling anyone what's necessary to use it, and only giving them a few days to do it anyway).

Glad I didn't have an EV6 or something on order and see the $7500 credit yanked out from under me with a 2-week WTF surprise bill coming out of nowhere. I'd be pissed. I feel bad for those that got screwed.

 

[dbsb3233]

Honestly, it makes a world of difference. Regarding contracts, most states follow some form of the UCC model rules. Some states can adopt more of the UCC and some states can adopt less of it. It is all up to each states respective court to decide how flexible they want to be when interpreting a definition of a binding contract. This is often one of the factors a large fortune 500 company will consider when deciding to chose to incorporate in one state versus another.

If true, and what constitutes a binding contract for a car order varies greatly from state to state, how on earth is the IRS gonna confirm that for each car purchase? Seems unlikely that would show up in any of the VIN databases that the IRS might have available to them to confirm next year when people file their taxes and try to claim the credit.

And if so, it's probably gotta be one of those "trust" items. Meaning the IRS just has to trust the taxpayer if they claim that tax credit. At least initially. There's always the chance of an audit, or a follow-up correspondence where they question it and ask for further documentation. Wouldn't totally surprise me if they just let it go though. Roll of the dice.

 

[Mach1E]

If true, and what constitutes a binding contract for a car order varies greatly from state to state, how on earth is the IRS gonna confirm that for each car purchase? Seems unlikely that would show up in any of the VIN databases that the IRS might have available to them to confirm next year when people file their taxes and try to claim the credit.

And if so, it's probably gotta be one of those "trust" items. Meaning the IRS just has to trust the taxpayer if they claim that tax credit. At least initially. There's always the chance of an audit, or a follow-up correspondence where they question it and ask for further documentation. Wouldn't totally surprise me if they just let it go though. Roll of the dice.

How?

Audits.

The same way they “confirm” everything.

The entire tax code is the “honor system” until you get audited. It’s up to YOU to know your local laws and follow them.

 

[kennethjk]

Although this law should have been effective 1/1/2023 there may have been budgetary reasons for a sooner effective date. Unfortunately this is not unusual. Sometimes things are retroactive, this one isn’t obviously.

our tax system in many areas is based on the taxpayer doing the right thing. Used to be there were more audits to keep taxpayers honest. Maybe that will happen again With all the new employees but it will take a while before the make an impact.

 

[dbsb3233]

How?

Audits.

The same way they “confirm” everything.

The entire tax code is the “honor system” until you get audited. It’s up to YOU to know your local laws and follow them.

Yeah, that's what I said too. But audits are pretty rare so good chance any one person's might just never get scrutinized. And it's such a confusing mess that many will probably be claiming it anyway, not even knowing for sure.

* Well, audits were rare before the 87,000 new IRS agents they just gave them in this bill, anyway.

 

[Orangefirefish]

I'm still not quite sure how much was intentional vs how much was incompetence, but it doesn't really matter. Both are equally bad and it's the same result either way.

It's actually insulting to include this exception in the law (like they're doing people a favor) but then make it virtually impossible to use (by not telling anyone what's necessary to use it, and only giving them a few days to do it anyway).

Glad I didn't have an EV6 or something on order and see the $7500 credit yanked out from under me with a 2-week WTF surprise bill coming out of nowhere. I'd be pissed. I feel bad for those that got screwed.

Yeah that would suck. I hope it’s those unscrupulous dealers that really feel the bite here. Was curious about an Ioniq 5 here and asked around, just about the worst dealer attitudes possible. Was laughed at when I asked if they were selling at MSRP.

 

[Orangefirefish]

Yeah, that's what I said too. But audits are pretty rare so good chance any one person's might just never get scrutinized. And it's such a confusing mess that many will probably be claiming it anyway, not even knowing for sure.

* Well, audits were rare before the 87,000 new IRS agents they just gave them in this bill, anyway.

That’s funny… keeping us honest. Probably a good thing anyway, a couple years ago the IRS discovered a bunch of fraudulent tax credit claims.

 

[ARK]

Yeah, that's what I said too. But audits are pretty rare so good chance any one person's might just never get scrutinized. And it's such a confusing mess that many will probably be claiming it anyway, not even knowing for sure.

* Well, audits were rare before the 87,000 new IRS agents they just gave them in this bill, anyway.

They don’t need to do an audit to figure out routine mistakes. Like if you take a deduction for an IRA contribution, their system looks to see if it got some tax form from some financial institution confirming the IRA contribution.

Or if you report a certain taxable income, but report insufficient taxes paid (harder to do now with online forms and programs doing the math for you), their system will catch it through a computer review process.

It’s more the adventurous deductions or straight fraudulent stuff, like claiming a vehicle is for a business use that’s never been within 10 miles of a worksite or client, that I think requires the human review of an audit.

Something like tax credit eligibility for any particular vehicle, I’d bet they’d come up with a computer-driven process to review.

 

[dbsb3233]

Something like tax credit eligibility for any particular vehicle, I’d bet they’d come up with a computer-driven process to review.

Perhaps, but I'm not quite sure how they'd do that when the trigger for this scenario is whether the buyer had a binding order or not before they went on to complete the purchase and claim the tax credit. It just doesn't seem like a detail that would exist anywhere in a database for the IRS computers to find it. I think it's usually just the sale (and subsequent registration) itself that gets recorded in state or federal databases.

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