No tax credit for customers with binding contracts.

[emoore]

has Rivian screwed their most loyal customers yet again?

How is this Rivians fault?

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[SDH]

I don't recall, did we pay anything extra when we signed the binding contract?

Nope.

 

[SDH]

How is this Rivians fault?

Yeah, seriously. Don't blame Rivian here. Blame that useless old man in The White House.

 

[genepopemt]

How is this Rivians fault?

1st: They could have shipped to those customers who had orders that were multiple years old and had signed the binding contract before the end of 2022.
2nd: If they were supposed to send the info to the IRS and didn't that is their fault.

I guess they could have taken the ford approach and did no binding contracts, raise the price to order holders by 40% or more and not allow any but the most expensive configurations to be re-ordered

an edit: I guess I am being too harsh on rivian because they are creating so many disappointments in other areas (as one in the purgatory of "Processing Estimate" can attest, for a company that is over 13 years old (founded June of 2009) , has been taking orders for over 4 years and has even delivered some vehicles that they can't even make a rough estimate of their build schedule is not a great way to delight customers). Not to mention vampire drain, bricked vehicles, etc.

 

[NineElectrics]

Coming soon

Exactly. The IRS is super busy with 2022. They won't provide exact instructions for 2023 taxes until later; probably in early 2024. Taxes are confusing enough as it is without adding instructions for odd corner cases for *next* tax year (current calendar year) to every page on their website. That's just a bad practice.

 

[JohnB R1T]

Speaking as a CPA (for many years), I can tell you that many of you will be sorely disappointed by your "home grown" interpretation of what constitutes a "binding contract".

Consult your personal tax adviser before making any decisions based on what you "think" or what you read online.

The people who can afford a high end EV have been well and truly screwed by the latest revisions to the tax credits. I am neither seeking nor accepting new clients, and my only advice is "call your tax guy".

 

[boonrag]

I found this on the Treasure Department FAQ and if I'm reading it right the purchase agreement that was signed before 8/16/22 does allow for the tax credit.

 

[racekarl]

I found this on the Treasure Department FAQ and if I'm reading it right the purchase agreement that was signed before 8/16/22 does allow for the tax credit.

Only IF the thing we signed is acceptable to the IRS as a binding purchase agreement, and most of their signals so far point to the conclusion that they will not accept it.

 

[astonius]

Speaking as a CPA (for many years), I can tell you that many of you will be sorely disappointed by your "home grown" interpretation of what constitutes a "binding contract".

Consult your personal tax adviser before making any decisions based on what you "think" or what you read online.

The people who can afford a high end EV have been well and truly screwed by the latest revisions to the tax credits. I am neither seeking nor accepting new clients, and my only advice is "call your tax guy".

I think what constitutes a binding purchase agreement is the lesser concern compared to its applicability beyond 2022.

 

[dfx]

Speaking as a CPA (for many years), I can tell you that many of you will be sorely disappointed by your "home grown" interpretation of what constitutes a "binding contract".

Consult your personal tax adviser before making any decisions based on what you "think" or what you read online.

The people who can afford a high end EV have been well and truly screwed by the latest revisions to the tax credits. I am neither seeking nor accepting new clients, and my only advice is "call your tax guy".

I think that's a bit of an oxymoron. People who can afford a high end EV are most probably doing ok. There are plenty of people in this world who are getting screwed and by and large the folks who are buying Rivians are not among them

 

[TexasCrane]

has Rivian screwed their most loyal customers yet again?

No.

 

[CO-rayman]

For Rivians delivered prior to the end of 2022, I don’t understand why there is any doubt about eligibility for a $7500 federal tax credit for the 2022 tax year. The IRA’s new EV tax credit provision that went into effect in 2022 was only the domestic assembly requirement. Normal Illinois qualifies.

The new law’s MSRP cap and income cap provisions only affect EV tax credit for deliveries after January 1, 2023 and the battery sourcing requirements apply after they are released in March 2023.

If there is any chance our binding purchase agreements will work, it will be of benefit to 2023 delivery recipients who would be claiming their credit on their 2023 tax year return —- or even more unlikely for 2024 deliveries on that year’s return.

I would not read anything "implicitly" into any guidance provided by the IRS or Treasury. They are mostly lawyers and know how to phrase sentences very carefully. Besides, I am sure Rivian had multiple tax lawyers look at the binding contract before they sent it out to us.

1. I agree with others that have said there is no doubt that the $7500 refund applies to those that have received their R1s in 2022.

2. With respect to those that signed the binding agreement before the effective date of the IRA (i.e., before 8/16/2022) and took delivery in 2023, there is very clear guideance from the IRS and Treasury that they would also qualify for the 2022 $7500 federal tax refund assuming they meet the other requirements.

A. The Treasury FAQ states as follows (and note that it links directly to the IRS guidance mentioned before):

Q: If I signed a contract to purchase an electric vehicle prior to enactment of the Inflation Reduction Act (before August 16, 2022) but have not yet taken possession of the vehicle, will the changes in the Inflation Reduction Act impact my tax credit?
No. If you entered into a written binding contract to purchase a qualifying electric vehicle before the date of enactment of the Inflation Reduction Act (August 16, 2022), the changes in the Inflation Reduction Act will not impact your tax credit. You may claim the credit based on the rules that were in effect before August 16, 2022. The Internal Revenue Service provides information on “written binding contract” here: https://www.irs.gov/businesses/plug-in-electric-vehicle-credit-irc-30-and-irc-30d.

(source: https://home.treasury.gov/system/files/136/EV-Tax-Credit-FAQs.pdf)


B. In relevant part, the IRS guidance (referenced by the treasury FAQ) states:

What is a written binding contract?

In general, a written binding contract :

• is enforceable under state law, based on the state and relevant facts and circumstances, and
• does not limit the damages a buyer or seller can receive for a breached contract, such as forfeiting a deposit or paying a pre-determined dollar amount or a percentage of the total contract price for the vehicle.

An indication of a binding contract is if a buyer has made a significant non-refundable deposit or down payment.


-------------------

Note that the IRS guidance has 2 sentences. The first sentence generally defines what is considered a written binding contract which has 2 requirements. First, it has to be enforceable under state law. Second that it does limit the damages (the specific example given is a forfeiting deposit).

I am no expert in all state law but it seems safe to assume the contract drafted by Rivian attorneys would be considered enforceable in most, if not all states. The second criterion is clearly met since we give up our $100 deposit.

The 2nd sentence of the IRS guidance is separate and only says that a significant non-refundable deposit is "an indication" of a binding contract. The sentence does not say it would be required to have a significant non-refundable deposit. Only the 1st sentence provides the definition for a general written binding contract. In other words, the second sentence is just one example.

So, in short, I respectfully disagree with statements that somehow these 2 separate sentences imply that $100 is not enough for a binding contract. Unless you have some case law that says a $100 non-refundable deposit is not enough, I would stop right there.

So, in my case, I am going to apply for this refund on my 2023 taxes that is unless the IRS renegs on their guidance.

 

[mkg3]

Speaking as a CPA (for many years), I can tell you that many of you will be sorely disappointed by your "home grown" interpretation of what constitutes a "binding contract".

Consult your personal tax adviser before making any decisions based on what you "think" or what you read online.

The people who can afford a high end EV have been well and truly screwed by the latest revisions to the tax credits. I am neither seeking nor accepting new clients, and my only advice is "call your tax guy".

Yeah I've been told by my CPA and have read CPAs' posts on other forums from all over the country saying essentially the same.

I also read someone above saying that most Rivian buyers are not high end EV buyers but let's get real. Forget that there are no other options in lower price range for EV trucks or EV midsized 7 passenger SUVs. In terms of magnitude, anyone buying vehicles over $80k out the door, can be classified as "higher end EV buyer" or higher end vehicle buyers.

The only chance for the tax credit for those that have legacy pricing is to come in less than $80K MSRP, and hope that IRS kicks the can down the road for the domestic battery requirement.

 

[Grabs10]

The powers at be really screwed this up. What was in place would have sufficed. Ultimately this was a large Corp handout to those companies that didn’t need it.

What I’m curious though is I’m priced locked with a pretty old reservation. So I will be under the MSRP threshold. What Im hoping is the large corps have Oval Office meetings on battery source materials prior to March to get the powers to kick the can longer on those requirements as anybody priced locked should get the full $7500 tax benefit. Just need to go have GM and Ford to go collect on their political investments like they did to get the Cadillacs and Mach E’s qualified as SUV’s.

 

[JerseyGreens]

Yeah I've been told by my CPA and have read CPAs' posts on other forums from all over the country saying essentially the same.

I also read someone above saying that most Rivian buyers are not high end EV buyers but let's get real. Forget that there are no other options in lower price range for EV trucks or EV midsized 7 passenger SUVs. In terms of magnitude, anyone buying vehicles over $80k out the door, can be classified as "higher end EV buyer" or higher end vehicle buyers.

The only chance for the tax credit for those that have legacy pricing is to come in less than $80K MSRP, and hope that IRS kicks the can down the road for the domestic battery requirement.

What's comical about these CPAs is that none of them state that Binding Contracts are governed by State Law not the IRS...

Any CPA trying to armchair quarterback themselves into these conversations should explicitly state this fact...

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