Difficulty filing IRS $7500 tax credit

[RCden12]

Preordered Nov 2021, signed a binding purchase agreement last summer in Aug 22 and picked up my RIS last month. (Love it)
I filled out the correct 2022 IRS form and submitted all of this to my CPA. My CPA just sent the following:

“The IRS has shut down E-Filing for the year and it won’t reopen until January 23, 2024. I’d recommend holding off on filing until that point because it can take up to sixteen weeks to process a paper tax return.
Aside from that point it would be better to simply claim the credit in on your 2023 tax return therefore eliminating any potential issues about delivery.”

This doesn’t sound correct to me. I was hoping folks on the forum might have some tax filing knowledge to guide me a little here. Thanks in advance!

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[Supratachophobia]

Unless your purchase was under $80k (possible), then you need a new CPA who's familiar with the way the EV credit is now structured with income limits and maximum vehicle purchase price limits.

 

[sfvR1S]

I can't speak to IRS "shutting down" e file for 2023, but it was just a simple amended 2022 return and waiting about a month to get my $7,500.

Not sure why he's suggesting including it in 2023 return.

Long thread

https://www.rivianforums.com/forum/...500-tax-refund-for-amended-2022-return.16786/

 

[pangpang77]

Preordered Nov 2021, signed a binding purchase agreement last summer in Aug 22 and picked up my RIS last month. (Love it)
I filled out the correct 2022 IRS form and submitted all of this to my CPA. My CPA just sent the following:

“The IRS has shut down E-Filing for the year and it won’t reopen until January 23, 2024. I’d recommend holding off on filing until that point because it can take up to sixteen weeks to process a paper tax return.
Aside from that point it would be better to simply claim the credit in on your 2023 tax return therefore eliminating any potential issues about delivery.”

This doesn’t sound correct to me. I was hoping folks on the forum might have some tax filing knowledge to guide me a little here. Thanks in advance!

My accountant told me the same thing. He said IRS is short staffed. Filing on paper could take forever.
E-filing was shut down for the year on 11/13 and won’t reopen until end of January. He said waiting until then to e-file might still be quickest.

That second part on including in 2023 tax sounds wrong. It should be an amendment to the 2022 tax filing.

 

[RivAW]

For what it’s worth (and it’s easy enough to google), the IRS shut down e-file for individuals 11/18 and it shuts for businesses 12/26….both until January.
Not sure why the CPA would recommend you to include it with 2023 as opposed to a 2022 Amendment….likely depends on variables like tax liability, cost of the vehicle, and the new income limit etc…

 

[lefkonj]

Your accountant is wrong but I have to say I sympathize with them. The binding contract from over a year ago is the strange part and they normally don't see that stuff. You to be very detailed in your explanation. However filing when the systems for the IRS aren't ready is a challenge. As long as you aren't up against a timer for the adjustment, wait until January.

 

[UnsungZero_OldTimeAdMan]

Preordered Nov 2021, signed a binding purchase agreement last summer in Aug 22 and picked up my RIS last month. (Love it)
I filled out the correct 2022 IRS form and submitted all of this to my CPA. My CPA just sent the following:

“The IRS has shut down E-Filing for the year and it won’t reopen until January 23, 2024. I’d recommend holding off on filing until that point because it can take up to sixteen weeks to process a paper tax return.
Aside from that point it would be better to simply claim the credit in on your 2023 tax return therefore eliminating any potential issues about delivery.”

This doesn’t sound correct to me. I was hoping folks on the forum might have some tax filing knowledge to guide me a little here. Thanks in advance!

Fire your CPA. jk

Bad advice. The backdating of purchase (and that's exactly what the binding agreement is) is only valid through amending your '22 return. Because that is the year you agreed to turn the reservation into an official agreement to purchase. You and your CPA need to read and understand this: https://rivian.com/support/article/...EV-tax-credit-using-a-binding-order-agreement The IRS guidance is straight-forward and specific on which year you must amend.

If you file as '23, with IRA already in effect, the binding agreement is null and void (because you entered agreement to buy in '22, not '23). And if you qualify under IRA restrictions, and make claims on your '23 return, you'd only be eligible for $3750 max.

 

[Killer95Stang]

It has to filed as an ammendment to your 2022 taxes. Get another tax guy to file it.

 

[waitingonanr1s]

My accountant told me the same thing. He said IRS is short staffed. Filing on paper could take forever.
E-filing was shut down for the year on 11/13 and won’t reopen until end of January. He said waiting until then to e-file might still be quickest.

Yes, CPA is correct on e-filing - it shuts down during this time every year. https://www.eitc.irs.gov/mef-status

 

[waitingonanr1s]

Fire your CPA. jk

Bad advice. The backdating of purchase (and that's exactly what the binding agreement is) is only valid through amending your '22 return. Because that is the year you agreed to turn the reservation into an official agreement to purchase.

If you file as '23, with IRA already in effect, the binding agreement is null and void. And if you qualify under IRA restrictions, you'd only be eligible for $3750 max.

There is no guarantee that Rivian's contracts qualified as binding agreements. It's been discussed elsewhere and it's currently grey area - but there is not a clear right or wrong on this until tested by the courts. I'd imagine it will be a year or so before we see a case if at all.

I'm a CPA and did not feel comfortable claiming the pre-IRA credit on my return. Professional opinions vary on this though. I advise my clients of the risks, but will ultimately file how they wish.

Agree that you are correct regarding how the pre-IRA and post-IRA credits should be claimed for a 2023 delivery with pre-IRA binding agreement in place.

 

[UnsungZero_OldTimeAdMan]

There is no guarantee that Rivian's contracts qualified as binding agreements. It's been discussed elsewhere and it's currently grey area

I filed in mid-July, per IRS guidance as conveyed through Rivian. They accepted, reviewed, processed and issued a check in 3 weeks. If they change their mind and want to come after me for their sudden change of heart, they can speak to my lawyers about the $7500+interest+mental trauma+legal fees.

 

[AdaminFlag]

Everyone writing that they received their returns in a few weeks has me nervous. We filed our amended return electronically through our CPA at the end of June...nothing yet. I called about 18 weeks in and they said they were delayed up to 20 and to call back after then. We're at 24 weeks now so I guess I better call again. Ugh...

 

[waitingonanr1s]

I filed in mid-July, per IRS guidance as conveyed through Rivian. They reviewed, processed and issued a check in 3 weeks. If they change their mind and want to come after me for their sudden change of heart, they can speak to my lawyers about the $7500+interest+mental trauma+legal fees.

It's called an audit. Those don't happen until 1-3 years after you file. In the meantime refunds have to be paid out timely - returns can be and are pulled for review after processing. Rivian really went out on a limb and they disclaimed themselves from liability in the small print - that meant nothing.

If you read the IRS guidelines - it is not clear the contract qualifies as binding. I'm not rehashing it all here, but it's far from black and white.

At the end of the day, worst that is likely to happen is you have to repay with interest and possibly penalties if disallowed. As a CPA, I have licenses on the line if the IRS wanted to be a pain, so the risk is not personally worth it for me to claim personally. I still have the option to go back and amend if I see a favorable court ruling come across though.

 

[SANZC02]

When you took delivery you cannot get the full 7500 in 2023.

You could get full 7500 in 2023 if delivery was in the first qtr, vehicle MSRP was under 80k and AGI is under 150/300k.

 

[CharonPDX]

To people complaining that the CPA suggested filing on the 2023 - if the vehicle price is under $80k and the purchaser has income under the threshold, that might well be a good solution.

The vehicle was taken delivery in 2023, so it can absolutely be filed for under 2023. It’s just that the BPA allows the purchaser to apply it to 2022 instead. It doesn’t require it be applied to 2022. Heck, the IRS has no idea a BPA was signed until you file that amended return using it.

So if you can make use of the credit on your 2023, go ahead. Especially if (as is the case for some people) amending 2022 would impact your 2023 filing, too.

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