R1T $7500 Tax Return with binding purchase agreement/2022 Amended Tax Return

[FromBostonSouth]

My accountant amended my 2022 tax return on 11/1/2023 to reflect my binding purchase agreement signed on 15 August 2022 in order to claim the $7500 tax credit.

On 2/22/2024, I received a denial letter from the IRS stating that the $7500 tax credit was denied because the vehicle was placed in service prior to 1 Jan 2023 and because my adjusted income exceeded limits.

The IRS website clearly states instructions on how to claim the credit with a binding purchase agreement dated 8/15/2022 but with delivery after 8/16/2023 and there are no restrictions. We followed the guidance verbatim and it was still denied. Has anyone else been denied as well? Any suggestions?

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[tk21]

I amended my 2022 return and got the credit back with interest yesterday (albeit it’s been in their queue since July…). Your in service date should have been the 8/2022 date of the binding agreement. Might just be your AGI is the main problem if you put the delivery date of 8/22….

***but I’m not a professional***

 

[SwaziCAR]

Did your accountant enter "8/15/2022" on Line 3 of Form 8936?

If they/she/he did, and if there are no other errors, I would think you'd appeal.

--Also not a professional!--

 

[FromBostonSouth]

Thanks for the reply. Yes, 8/15/22 was used as placed in service date. Moving forward an appeal.

 

[Dark-Fx]

There's no income limitations for 2022 tax year credits. The tax credit *can* cause an AMT adjustment making specific other credits not valid though. Worthwhile double checking that. I'm not a tax professional but I did stay at a holiday inn last night.

 

[R1 EVY]

I'm not a tax professional but I did stay at a holiday inn last night.

Always funny. Always.

 

[vandy1981]

I amended my 2022 return and got the credit back with interest yesterday (albeit it’s been in their queue since July…).

I guess I need to be more patient about waiting for my refund submitted in November.

I'm holding out hope that I get it before Elon's projected Rivian bankruptcy date (kidding).

 

[UnsungZero_OldTimeAdMan]

Did your CPA volunteer in-service date later than 8/15/2022? IRS guidance, as passed on by Rivian, plus pages of posts here, specifically tell you to use 8/15/2022 as in-service date. Unless you signed the report Rivian sent out earlier this year, which they said you didn't need to (with binding agreement), or volunteered delivery date to IRS, there would have been no way for them to know.

 

[FromBostonSouth]

8/15/2022 was the date entered on Form 8936 line 3 when my amended return was submitted. This seems to be a random and unfounded error on the IRS so wondering if anyone else received a similar rejection.

To quote the denial letter: "We cannot allow your claim for the clean vehicle credit because the vehicle's placed in service date is PRIOR to January 1, 2023" --Of course it was placed in service prior to January 1, per all the guidance, 8/15/2022 was the correct date to use.

The denial letter went on to say: "We cannot allow your claim for the clean vehicle credit because your Modified Adjusted Gross Income exceeds the maximum amount allowable based on your filing status". As other forum members have pointed out, and per the IRS website, tax payers holding a binding offer to purchase dated 8/15/2022 are not subject to ANY restrictions based on MSRP, income limits, or manufacturing requirements as the contract was signed the day before the Inflation Reduction Act was enacted.

I spent a decent amount of time drafting an appeal letter and located all references from the IRS website proving my case.

If anyone else finds themselves with a similar rejection letter, I'm happy to send over my appeal letter and supporting documentation!

Thanks all for the input. I'll update once I hear back from the Office of Appeals.

 

[jfornelli]

8/15/2022 was the date entered on Form 8936 line 3 when my amended return was submitted. This seems to be a random and unfounded error on the IRS so wondering if anyone else received a similar rejection.

To quote the denial letter: "We cannot allow your claim for the clean vehicle credit because the vehicle's placed in service date is PRIOR to January 1, 2023" --Of course it was placed in service prior to January 1, per all the guidance, 8/15/2022 was the correct date to use.

The denial letter went on to say: "We cannot allow your claim for the clean vehicle credit because your Modified Adjusted Gross Income exceeds the maximum amount allowable based on your filing status". As other forum members have pointed out, and per the IRS website, tax payers holding a binding offer to purchase dated 8/15/2022 are not subject to ANY restrictions based on MSRP, income limits, or manufacturing requirements as the contract was signed the day before the Inflation Reduction Act was enacted.

I spent a decent amount of time drafting an appeal letter and located all references from the IRS website proving my case.

If anyone else finds themselves with a similar rejection letter, I'm happy to send over my appeal letter and supporting documentation!

Thanks all for the input. I'll update once I hear back from the Office of Appeals.

Guess I'm finding myself a little confused. I filled out the form (got my R1S 9/30/2023) and am unsure if I need to do something with my tax return.

 

[BRR1S]

8/15/2022 was the date entered on Form 8936 line 3 when my amended return was submitted. This seems to be a random and unfounded error on the IRS so wondering if anyone else received a similar rejection.

To quote the denial letter: "We cannot allow your claim for the clean vehicle credit because the vehicle's placed in service date is PRIOR to January 1, 2023" --Of course it was placed in service prior to January 1, per all the guidance, 8/15/2022 was the correct date to use.

The denial letter went on to say: "We cannot allow your claim for the clean vehicle credit because your Modified Adjusted Gross Income exceeds the maximum amount allowable based on your filing status". As other forum members have pointed out, and per the IRS website, tax payers holding a binding offer to purchase dated 8/15/2022 are not subject to ANY restrictions based on MSRP, income limits, or manufacturing requirements as the contract was signed the day before the Inflation Reduction Act was enacted.

I spent a decent amount of time drafting an appeal letter and located all references from the IRS website proving my case.

If anyone else finds themselves with a similar rejection letter, I'm happy to send over my appeal letter and supporting documentation!

Thanks all for the input. I'll update once I hear back from the Office of Appeals.

The same exact thing happened to me and I am drafting my appeal now. I am a tax professional and deal with the IRS on a regular basis. I am concerned that this whole issue is beyond the comprehension of whoever will end up reviewing the appeal. The denial was clearly an automatic letter produced without any thought.

 

[UnsungZero_OldTimeAdMan]

Guess I'm finding myself a little confused. I filled out the form (got my R1S 9/30/2023) and am unsure if I need to do something with my tax return.

Two straight-forward paths:

1. If you signed binding purchase agreement Rivian offered just before passing of Inflation of Reduction Act, as a way of back-dating your purchase, you do this: https://rivian.com/support/article/...EV-tax-credit-using-a-binding-order-agreement. Important to note, a reservation is not a binding agreement. Two different things and some people confuse the two. Reservation is fully refundable; not binding commitment to buy.
2. If you did not sign it. You would be subject to all qualification restrictions of IRA: purchase price, income cap and battery resourcing requirements. If you qualify under all those categories, you stand to collect a maximum of $3750 in credit, the maximum any R1 currently delivered qualifies for (as determined by Treasury). You would claim this with your '23 return using the appropriate forms.

Hire a professional if the procedures are still not clear to you.

 

[jfornelli]

Two straight-forward paths:

1. If you signed binding purchase agreement Rivian offered just before passing of Inflation of Reduction Act, as a way of back-dating your purchase, you do this: https://rivian.com/support/article/...EV-tax-credit-using-a-binding-order-agreement. Important to note, a reservation is not a binding agreement. Two different things and some people confuse the two. Reservation is fully refundable; not binding commitment to buy.
2. If you did not sign it. You would be subject to all qualification restrictions of IRA: purchase price, income cap and battery resourcing requirements. If you qualify under all those categories, you stand to collect a maximum of $3750 in credit, the maximum any R1 currently delivered qualifies for (as determined by Treasury). You would claim this with your '23 return using the appropriate forms.

Hire a professional if the procedures are still not clear to you.

Thanks. I'm in the 2nd group and qualified. I'll have to amend my return that I *just* did this past weekend. <sigh>

I forgot about it, but would have thought I would receive some document.

 

[UnsungZero_OldTimeAdMan]

Thanks. I'm in the 2nd group and qualified. I'll have to amend my return that I *just* did this past weekend. <sigh>

I forgot about it, but would have thought I would receive some document.

If you are on path 2, then you should have e-signed the document Rivian sent earlier this year, for purposes of reporting to the IRS who they sold and delivered cars to, so IRS could check against claims. If you ignored those multiple requests to sign, then you might run into issues claiming.

 

[jfornelli]

Yes, I e-signed that document. I'm now researching how to apply it.

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