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

[Explorer3686]

I’m not sure how many lawyers it would take to address the IRS’ lack of staffing and incompetence.

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[FromBostonSouth]

My CPA submitted my Form 8936 and the verification information required on 8/8/23. I have called the IRS multiple times over the last 46 weeks and get nowhere other than being told there is no time frame to process these 2022 amended claims. As a manufacturer that has been struggling i would hope that Rivians team of lawyers could assist in getting the rebates processed as we were led to believe we were eligible by the manufacturer.

This has been a frustrating experience. I’ve received two letters since filing my appeal, they continue forwarding the appeal to different offices. The most recent letter said I would receive a decision a month ago. There has been zero additional correspondence from the IRS. I’ve called a few times with no luck but will reengage again shortly.

 

[walker7734]

I had the same denial. I have filed an appeal but no idea how long this will take or what will happen from here. I printed their own directions, highlighted and post-it noted it. Printed the binding agreement and the delivery receipt of the Rivian and mailed it along with the appeal.

This is after they screwed up my first amended return where it was approved but the clown didn’t make an adjustment or leave any notes in the system as to why. So almost a year after amending my original return I’m still waiting for the rebate.

 

[Mygrain]

IRS received my amended 2022 return 1/4/24 and sent me a denial letter dated 7/15/24. (I signed a hard copy of Rivian's binding contract on 8/10/22 and saved it in my files, so I should be grandfathered into the old rules.) Here's what the denial letter says:

We can't process your claim for the tax periods listed above [2022] because your supporting information was not complete. If you have more information you didn't send with this claim, you can file another claim that includes all of your information.​

​

The Instructions for Form 8936 specify that the credit may only be claimed for vehicles placed in service during the tax year. Since your vehicle was not placed in service until 2023, the credit should be claimed in 2023, not 2022.​

​

If you do not agree, please provide a legal citation or IRS publication that allows the credit in the year the contract was entered into.​

In my mind, this should be easy. I just point out the following IRS website link: Credits for new electric vehicles purchased in 2022 or before | Internal Revenue Service (irs.gov) The salient paragraph reads as follows:

Purchase date vs. delivery date​

If you entered a written binding contract to buy a vehicle after December 31, 2021, and before August 16, 2022, but took delivery on or after August 16, 2022, you may elect to claim the credit based on the prior rules. To elect the credit under the prior rules you must elect the credit on your 2022 tax return after you take delivery of the vehicle. Depending on the date the vehicle is delivered, you can claim the credit on your original, superseding, or amended 2022 tax return. ​

Has anyone successfully appealed? Should I fax a response to the letter? Or should I try filing another 1040-X with "all of [my] information"?

Note that IRS did not ask for a copy of the contract. Rather, they acknowledge (by inference) that I entered into a contract in 2022 and asked me to cite an IRS publication that allows me to claim the credit on my 2022 return.

The first paragraph of the denial letter suggests that I "file another claim" if I have more information. Option B: rather than respond to the letter, it sounds like I could start over with another form 1040-X ... basically identical to what I sent before, but this time I would print a copy of the website I referenced above and circle the paragraph that explains about claiming the credit on the 2022 return.

Final note: I can't find anywhere on the internet the version of 2023 Form 8936 instructions with the following sentence: "Taxpayers who took delivery in 2023 or after must use August 15, 2022 as the date placed in service when filling out form 8936." I remember seeing it in March of '23. It is referenced here: Rivian informs customers of IRS guidance on EV tax credits (teslarati.com) But that sentence is not in the current revision (Jan. 24, 2024) of the 2023 instructions available on the IRS website.

 

[dode]

For those that have been waiting I just received my refund after almost a year. Extra $700 in interest added. Keep your hopes up!

 

[Yossarian]

My pre-order dates to 2020 but I did not take delivery until early this June. My amended 2022 return was sent on 24 June, and unsurprisingly, is not yet in the IRS system. I suspect that I have a very long wait ahead of me.

 

[neva6]

I also just received my check! $7500+$742 interest. In my submission I included my signed 'Binding Purchase Agreement', the printouts of the IRS rules and highlighted the pertinent text that explained the odd rule about 'put in service Aug 2022'. I presume that may have helped move the issue along. It did take the full 16 weeks from when they received my paper 1040X. Hang in there everyone!

 

[kcko11]

Hi Al,

Below is an example appeal I sent to the IRS with the attached supporting documentation. I also included my Rivian Contract, the rejection notice sent by the IRS, and a copy of my amended 2022 return.

I am NOT a tax professional but drafted this, had my tax professional review and give the green light and so I sent it out. I DO NOT know if this will be effective but per the references, it is very clear this $7,500 credit is legitimate and should be honored without restrictions. Rivian has specific guidance your tax professional can follow posted on their website as well.

Lastly, the 4th Enclosure I used, the IRS Fact Sheet FS-2023-22 October 2023, was too large to attach as a file so below is the link: https://www.irs.gov/pub/taxpros/fs-2023-22.pdf

Hope this helps.

Just wanted to update people. I filed the appeal back in March, it forwarded it to appeals office. The appeal reviewer approved my appeal after asking to speak to me on a scheduled phone meeting.

He apparently needed to check the VIN to make sure the vehicle was put together in USA, and finally approved, however, because it was a 2024 model R1S and not the earlier ones, I only qualified for half.

I'm waiting for the check now but I accepted because it was better than nothing, which was what I was facing before. Thanks again for the letters drafted, it really spelled things out to make the reviewer have an easy time approving my case.

Sorry yours is taking longer but it should hopefully end with good news

 

[Mygrain]

because it was a 2024 model R1S and not the earlier ones, I only qualified for half.

At some point, exasperation kicks in and you cut your losses.

But with a contract signed prior to 8/16/22, you (and I) qualify for the full $7500 under the pre-IRA rules. The so-called transition rule spells it out clearly. Below is an excerpt from the Federal Register of the United States Government (and a link to the same). On the day before the IRA was enacted, there was no restriction on AGI or country of manufacture or battery content. This is one of four IRS documents that I cited in my rebuttal fax. I'm waiting for IRS to reply. If IRS forces me (kicking and screaming) into the IRA rules, I'll get $0 because of my 2023 AGI.

Section 13401(l) of the IRA provides a transition rule for a taxpayer who purchased or entered into a written binding contract to purchase a new qualified plug-in electric drive motor vehicle (as defined in section 30D(d)(1) of the Code, as in effect on the day before the date of enactment of the IRA (August 15, 2022)) after December 31, 2021, and before the date of enactment of the IRA (August 16, 2022), and placed such vehicle in service on or after the date of enactment of the IRA. The transition rule provides that such a taxpayer may elect (at such time, and in such form and manner as the Secretary may prescribe) to treat such vehicle as having been placed in service on the day before the date of enactment of the IRA.​

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Federal Register -- section 30D new clean vehicle credit

 

[kcko11]

At some point, exasperation kicks in and you cut your losses.

But with a contract signed prior to 8/16/22, you (and I) qualify for the full $7500 under the pre-IRA rules. The so-called transition rule spells it out clearly. Below is an excerpt from the Federal Register of the United States Government (and a link to the same). On the day before the IRA was enacted, there was no restriction on AGI or country of manufacture or battery content. This is one of four IRS documents that I cited in my rebuttal fax. I'm waiting for IRS to reply. If IRS forces me (kicking and screaming) into the IRA rules, I'll get $0 because of my 2023 AGI.

Section 13401(l) of the IRA provides a transition rule for a taxpayer who purchased or entered into a written binding contract to purchase a new qualified plug-in electric drive motor vehicle (as defined in section 30D(d)(1) of the Code, as in effect on the day before the date of enactment of the IRA (August 15, 2022)) after December 31, 2021, and before the date of enactment of the IRA (August 16, 2022), and placed such vehicle in service on or after the date of enactment of the IRA. The transition rule provides that such a taxpayer may elect (at such time, and in such form and manner as the Secretary may prescribe) to treat such vehicle as having been placed in service on the day before the date of enactment of the IRA.​

​

Federal Register -- section 30D new clean vehicle credit

Maybe I could've argued with the reviewer of my case more, but like you said, at some point you cut your losses. I was just happy to even have a response to my appeal given everyone else's lag time in getting a response. To be fair, the IRS website does state 2024 models only qualify for half, maybe if Rivian had given me a 2023 model, I would've received the full amount.

Regardless, I was part of the pre-price hike crowd and love my Rivian, so...shrug....I'm glad you got yours fully

 

[HokieBird7980]

Maybe I could've argued with the reviewer of my case more, but like you said, at some point you cut your losses. I was just happy to even have a response to my appeal given everyone else's lag time in getting a response. To be fair, the IRS website does state 2024 models only qualify for half, maybe if Rivian had given me a 2023 model, I would've received the full amount.

Regardless, I was part of the pre-price hike crowd and love my Rivian, so...shrug....I'm glad you got yours fully

Interesting on the 2024 model issue limiting the claim to half. I have my form at the accountant to file and was expecting full amount back. I live outside the 200 mile service center zone where Rivian refused to sell or deliver me a vehicle until this year when they were moving out the Gen 1 vehicles to Pre-Price increase orders, so in reality, i could not even take delivery until the 2024 model year was available. Not sure that will win me any points with the IRS, but we'll see if my accountant feels the same way.

 

[kcko11]

Interesting on the 2024 model issue limiting the claim to half. I have my form at the accountant to file and was expecting full amount back. I live outside the 200 mile service center zone where Rivian refused to sell or deliver me a vehicle until this year when they were moving out the Gen 1 vehicles to Pre-Price increase orders, so in reality, i could not even take delivery until the 2024 model year was available. Not sure that will win me any points with the IRS, but we'll see if my accountant feels the same way.

I asked the appeals officer this question, this was his reply. Unless someone else can have a better rebuttal, I’m stuck with half…which again, is better than nothing…:

“As I have stated. The 2024 model that you purchased only qualified for $3,750. This is a 2 step process in making the determination.



First step was what determining if you were eligible for the credit. What you are citing was also your initial argument that you qualified for the credit that was NOT dependent on the MAGI. This was what the IRS originally determined when the credit was disallowed. Based on your documentation and my research, I had agreed with you that the credit should be allowed. As the key factor was the date the purchase was made.



The next step would be to determine the amount based on the year and model of the vehicle.

• 2024 Rivan R1S available credit is $3,750 due to phase out of the credit from $7,500”

 

[FromBostonSouth]

Just wanted to update people. I filed the appeal back in March, it forwarded it to appeals office. The appeal reviewer approved my appeal after asking to speak to me on a scheduled phone meeting.

He apparently needed to check the VIN to make sure the vehicle was put together in USA, and finally approved, however, because it was a 2024 model R1S and not the earlier ones, I only qualified for half.

I'm waiting for the check now but I accepted because it was better than nothing, which was what I was facing before. Thanks again for the letters drafted, it really spelled things out to make the reviewer have an easy time approving my case.

Sorry yours is taking longer but it should hopefully end with good news

Al,

Great to hear your appeal has been settled. I just spoke with appeals office today. They are still struggling to approve my appeal based on AGI. The appeals rep I spoke with was fantastic. He acknowledged that all of the IRS websites support the fact I rate the credit with the binding contract prior to 8/15/2022 but states the IRS website is not Internal Revenue Code and because it is not law, it is not enough to win my appeal. Per my appeals agent, they need a "smoking gun" in the law that specifically states there was no income restriction prior to the Inflation Reduction Act .

Wondering if anyone has a specific IRC code that shows there was no income restriction in 2022? Or is there anything in the appeal approval you received that cites the specific code your adjuster referenced to make the approval decision?

 

[Here2there]

I'm sorry you guys are having so much delays and issues with your tax credit. I also signed the binding agreement back in 2022 but haven't taken delivery on my preorder yet. Only a 3% preorder discount for me and there are no R1T gen2s in the shop. Likely won't be able to take delivery in time before the discount expires end of September.

That being said, would it be easier to lease when I order the R1T just to avoid the hassle of fighting the IRS for the full $7500? Debating whether or not it makes sense to just lease with the intention of buying the vehicle after the lease period vs financing the vehicle upfront. As I understand it, all leases already include the $7500 credit in the pricing.

 

[Mygrain]

Per my appeals agent, they need a "smoking gun" in the law that specifically states there was no income restriction prior to the Inflation Reduction Act .

My initial (smart-a$$) reaction is that you won't find specific language in the law that says " ... and there is no restriction for taxpayer's modified adjusted gross income." Nor will you find specific language stating no restriction based on eye color at birth .... or whether your mother was a vegan during the tax year ... etc., etc. If the law doesn't say such-and-such is a restriction, can't we reasonably conclude that such-and-such is not a restriction?

I'll try to be more helpful. Let's look at the letter of the law. The MAGI requirements in the IRA are in Section 30D(f) Special Rules. Specifically, the requirements are in rule #10 Limitation based on modified adjusted gross income.

In the actual letter of the law, prior to the language for rule #10, is this sentence: "(f) SPECIAL RULES.—Section 30D(f) is amended by adding at the end the following:" After that sentence are rules #8, #9, and #10. (Wait .... so rules 1 through 7 must be in some prior legislation, right? Keep reading.) If you want to read the actual law, it is available here (IRA -- the whole thing). To find the Special Rules sub-section, scroll down to PDF page 141. The top of the page is labeled "136 STAT. 1957" .

The fact that they added a rule with limitations on MAGI implies that there was previously (prior to the IRA) no rule with MAGI requirements.

But let's dig deeper. Let's look at the letter of the law prior to the Inflation Reduction Act of 2022. Public law 111-5, also known as the American Recovery and Reinvestment Act of 2009, contained amendments to Section 30D. We'll look at section 1141, CREDIT FOR NEW QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR VEHICLES. Here, in the 2009 legislation, you'll find sub-section (f) with Special Rules 1 through 7. Rule #1) BASIS REDUCTION. Rule #2) NO DOUBLE BENEFIT. Rule #3) PROPERTY USED BY TAX-EXEMPT ENTITY. Etc., etc. There is nothing in the 7 Special Rules contained in the 2009 law that addresses taxpayer MAGI. So ... can't we reasonably conclude that there was no restriction on income??? The complete text of the 2009 law is here (public law 111-5 ... the whole thing). To find the sub-section on Special Rules, scroll down to the very bottom of PDF page 213 ... the page is labeled "123 STAT. 327".

That's my best effort to find the "smoking gun" your IRS agent is apparently seeking.

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