[WER2XU]

Please go here and let the IRS know how they gooned up by giving us the info on the "binding contract" when it was to late.
They gave this info on the 16th;
https://www.irs.gov/businesses/plug-...30-and-irc-30d
If they gave that last week, many of us could have done the right thing...
but go here and comment...hopefully many of you are better with words than I am.
https://apps.irs.gov/app/sams

[unfoundnemo]

Originally Posted by WER2XU

Please go here and let the IRS know how they gooned up by giving us the info on the "binding contract" when it was to late.
They gave this info on the 16th;
https://www.irs.gov/businesses/plug-...30-and-irc-30d
If they gave that last week, many of us could have done the right thing...
but go here and comment...hopefully many of you are better with words than I am.
https://apps.irs.gov/app/sams

Definitely would have made people feel better about it if they could have put some extra money down to get to the 5%. Of course, that's just an example, so hopefully whatever language their dealers came up with was strong enough to say that more than their <5% deposit was at risk.

[scLA]

Originally Posted by unfoundnemo

Definitely would have made people feel better about it if they could have put some extra money down to get to the 5%. Of course, that's just an example, so hopefully whatever language their dealers came up with was strong enough to say that more than their <5% deposit was at risk.

I know I'm preaching to the choir, but this was seriously one of the most rushed processes I can remember. In the IRS's defense, they were put in a bind here by the language Congress approved. Why in the world did Congress need to say "written binding agreement" and not just "written agreement" or "ordered before bill enactment date" in the Transition Rule. The language was not well thought out (or maybe it was if the their goal was to limit number of the people getting the credit…).

So the IRS is in a bind trying to enforce the language of the bill Congress passed, but I agree issuing guidance when it was too late to do anything about it is infuriating.

[Raille]

Of course my CA is clueless about any guidance or direction from BMW so far, so I can't even see if paying the difference and backdating the agreement is an option they'd entertain.

I think our best bet is if enough people reach out to the IRS, congress people, etc, maybe a grace period or waive of contract terminology could be executive ordered in or some such. Not very likely, but I can dream.

[Technic]

Originally Posted by slazLA

I know I'm preaching to the choir, but this was seriously one of the most rushed processes I can remember. In the IRS's defense, they were put in a bind here by the language Congress approved. Why in the world did Congress need to say "written binding agreement" and not just "written agreement" or "ordered before bill enactment date" in the Transition Rule. The language was not well thought out (or maybe it was if the their goal was to limit number of the people getting the credit…).

So the IRS is in a bind trying to enforce the language of the bill Congress passed, but I agree issuing guidance when it was too late to do anything about it is infuriating.

More than 252 people, mostly lawyers, looked at this particular clause of the “written binding contract” in this law and all agreed to it and its consequences.

It is obvious to me that the intention of this particular wording is to drastically reduce the number of EV tax credits to be claimed immediately this year, by the mere act of signing this law into effect the same day.

[JM71]

"For tax purposes in general, a contract provision that limits damages to an amount equal to at least 5 percent of the total contract price is not treated as limiting damages to a specified amount. For example, if a customer has made a non-refundable deposit or down payment of 5 percent of the total contract price, it is an indication of a binding contract."

Wow. I bet very few people had a non-refundable deposit of 5% or more.

[cruzer666]

Originally Posted by WER2XU

Please go here and let the IRS know how they gooned up by giving us the info on the "binding contract" when it was to late.
They gave this info on the 16th;
https://www.irs.gov/businesses/plug-...30-and-irc-30d
If they gave that last week, many of us could have done the right thing...
but go here and comment...hopefully many of you are better with words than I am.
https://apps.irs.gov/app/sams

Done, here was the problem description:
"Under current IRS guidance (August 16 2022) for the Plug-In Electric Drive Vehicle Credit (IRC 30D), Transition Rule for Vehicles Purchased before August 16, 2022 It is stated that If you entered into a written binding contract to purchase a new qualifying electric vehicle before August 16, 2022 the final assembly requirements do not apply.I have placed an order for a new electric vehicle in February 2022 through a dealership in California. I have placed a $1500 refundable deposit and gotten an order sheet with my name and order details. Pursuant to California vehicle code CVC 11736(c), it is unlawful for a dealer to get into a written binding contract under current IRS guidance.Current IRS guidance asks for documentation that is unlawful to obtain in the State of California."

[OUGrad05]

Originally Posted by WER2XU

Please go here and let the IRS know how they gooned up by giving us the info on the "binding contract" when it was to late.
They gave this info on the 16th;
https://www.irs.gov/businesses/plug-...30-and-irc-30d
If they gave that last week, many of us could have done the right thing...
but go here and comment...hopefully many of you are better with words than I am.
https://apps.irs.gov/app/sams

I submitted

[scLA]

Originally Posted by OUGrad05

I submitted

I received a response stating that department can't help.

"We are sorry, Systemic Advocacy cannot address individual or business account issues or tax questions, however you may receive assistance with your inquiry by searching the Internal Revenue Service website at www.irs.gov or contacting the IRS directly at 1-800-829-1040 (individuals) or 1-800-829-4933 (businesses). The Taxpayer Advocate Service (TAS) also provides guidance for common issues in the TAS Toolkit available at www.taxpayeradvocate.irs.gov/."

[WER2XU]

Originally Posted by slazLA

I received a response stating that department can't help.

"We are sorry, Systemic Advocacy cannot address individual or business account issues or tax questions, however you may receive assistance with your inquiry by searching the Internal Revenue Service website at www.irs.gov or contacting the IRS directly at 1-800-829-1040 (individuals) or 1-800-829-4933 (businesses). The Taxpayer Advocate Service (TAS) also provides guidance for common issues in the TAS Toolkit available at www.taxpayeradvocate.irs.gov/."

Interesting, I got a very different response... I worded the problem simply stating that in many states it is not possible to get what is being asked for, and the clarification came one day too late. I suspect if the wording of the problem is too specific they simply categorize it as an individual problem.

[scLA]

Originally Posted by WER2XU

Interesting, I got a very different response... I worded the problem simply stating that in many states it is not possible to get what is being asked for, and the clarification came one day too late. I suspect if the wording of the problem is too specific they simply categorize it as an individual problem.

Was their response to you helpful?

[therealm3]

Originally Posted by slazLA

I know I'm preaching to the choir, but this was seriously one of the most rushed processes I can remember. In the IRS's defense, they were put in a bind here by the language Congress approved. Why in the world did Congress need to say "written binding agreement" and not just "written agreement" or "ordered before bill enactment date" in the Transition Rule. The language was not well thought out (or maybe it was if the their goal was to limit number of the people getting the credit…).

So the IRS is in a bind trying to enforce the language of the bill Congress passed, but I agree issuing guidance when it was too late to do anything about it is infuriating.

You hit the nail on the head with purposely limiting the number of credits. Manchin wanted no credits and the shit show we now have was the compromise to gain his vote to pass the bill. So it is complicated by design. And it is pro American on purpose with the final assembly clause and the battery chemistry stipulation.

[WorthIt]

Originally Posted by WER2XU

Please go here and let the IRS know how they gooned up by giving us the info on the "binding contract" when it was to late.
They gave this info on the 16th;
https://www.irs.gov/businesses/plug-...30-and-irc-30d
If they gave that last week, many of us could have done the right thing...
but go here and comment...hopefully many of you are better with words than I am.
https://apps.irs.gov/app/sams

Submitted

[bavarianride]

Originally Posted by slazLA

Why in the world did Congress need to say "written binding agreement" and not just "written agreement" or "ordered before bill enactment date" in the Transition Rule. The language was not well thought out (or maybe it was if the their goal was to limit number of the people getting the credit…).

So the IRS is in a bind trying to enforce the language of the bill Congress passed, but I agree issuing guidance when it was too late to do anything about it is infuriating.

Do note IRA is mostly about clean energy, so Congress just picked the language as used in US Dept. of Treasury Section 1603, and IRS just uses the same language as in 2013-29, which is aligned to Section 1603.

I think those who have taken Section 1603/2013-29 credits will be familiar with written binding contracts and 5% safe harbor terminologies as used in IRC-30d.

[bavarianride]

Originally Posted by Technic

More than 252 people, mostly lawyers, looked at this particular clause of the “written binding contract” in this law and all agreed to it and its consequences.

This legislation(of which a big chunk is clean energy) has been in the work for a while, so the language and terminologies have been carefully aligned with existing clean energy legislations.

[bavarianride]

Originally Posted by cruzer666

"....Current IRS guidance asks for documentation that is unlawful to obtain in the State of California."

IRS already covers that:

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

Since CA does not allow binding written contracts with non-refundable damage(e.g. deposit), CA taxpayers are ineligible of $7500 credit if there is no completed transaction by 8/15/2022.

I think IRS likely will ask CA taxpayers for payment in full on a VIN pre-8/16 to prove eligibility of $7500 credit. IRS may even ask CA taxpayers for DMV registrations pre-8/16.

[TurtleBoy]

The IRS is not to blame at all in my opinion. Expecting them to issue guidance on legislation that is not law seems to be a misplaced hope. Better to be pissed at those that wrote the legislation. The intent of using that specific terminology can only be to reduce, or even eliminate, the number of credits that would be given under the Transition rule.

I wouldn't be surprised if using the Transition rule is an automatic audit flag. Congress used that wording for a reason and the IRS will likely make sure their intent is fulfilled.

[bavarianride]

It feels that those who have pending i4 orders(and care about $7500 credit) really should have read IRA drafts before hand, learnt about clean energy related oddities like written bidding contracts and 5% safe harbor, and planned accordingly.

[WER2XU]

Originally Posted by slazLA

Was their response to you helpful?

Thank you for your Systemic Advocacy Management (SAMS) submission on: EV Tax Credit, binding contract . It has been assigned issue 61390. All submissions are carefully reviewed and evaluated by uniform criteria to decide how we should use the information you provided to advocate for taxpayers.

You will only be contacted regarding this submission if we need clarification of the issue or additional examples, and when we have determined how we will use the information provided in our advocacy efforts.

If you have further questions on your submission, you may contact our office at systemic.advocacy@irs.gov; please refer to the issue number above in your email. Thank you for participating in the SAMS program.

[pharding]

This is what I wrote to the IRS.

AFTER the Inflation Reduction Act was passed and signed, the IRS issued guidance that the measure of a binding contract for those signed contracts and made down payment on a BEV prior to the signing of the law. After the fact the IRS announced that the down payment had to be 5% of the purchase price. Automobile dealerships and those that put down deposits on BEVs were totally unaware of this. If the IRS would have announced this before the law was signed, it would have been equitable. Doing so after the law was signed just screwed those middle class Americans that placed orders with normal deposits and binding contracts. Basically the IRS did that retroactively which is grossly unfair and duplicitous. It is not consistent with the normal high standards and integrity of the IRS. Besides that BEVs have one year waitlist and picking a random number of 5 percent deposit is just plain onerous. Plus corporations got massive tax reductions in 2017. Congress finally something for the middle class, as opposed to wealthy people or poor people and the IRS just strips it away in a very duplicitous manner that has zero relationship with how cars are bought in the US.

This was their response.

Thank you for your Systemic Advocacy Management (SAMS) submission on: IRS announcement that a 5% deposit is required aft . It has been assigned issue 61458. All submissions are carefully reviewed and evaluated by uniform criteria to decide how we should use the information you provided to advocate for taxpayers.

You will only be contacted regarding this submission if we need clarification of the issue or additional examples, and when we have determined how we will use the information provided in our advocacy efforts.

If you have further questions on your submission, you may contact our office at systemic.advocacy@irs.gov; please refer to the issue number above in your email. Thank you for participating in the SAMS program.

[techwhiz1]

Originally Posted by bavarianride

IRS already covers that:

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

Since CA does not allow binding written contracts with non-refundable damage(e.g. deposit), CA taxpayers are ineligible of $7500 credit if there is no completed transaction by 8/15/2022.

I think IRS likely will ask CA taxpayers for payment in full on a VIN pre-8/16 to prove eligibility of $7500 credit. IRS may even ask CA taxpayers for DMV registrations pre-8/16.

I believe you are incorrect.
The equal protection clause of the 14th amendment would be an argument that a benefit offered to one tax payer is impossible to collect by another tax payer with the only problem is that state law won't allow a binding contract.

Also IRS guidance after the fact is irrelevant. The guidance can be applicable moving forward but the constitution also shields us from behavior before a law or guidance.

You can't make something illegal today and prosecute someone for that behavior yesterday. The IRS is also bound by the constitution.

[bavarianride]

Originally Posted by techwhiz1

I believe you are incorrect.
The equal protection clause of the 14th amendment would be an argument that a benefit offered to one tax payer is impossible to collect by another tax payer with the only problem is that state law won't allow a binding contract.

Also IRS guidance after the fact is irrelevant. The guidance can be applicable moving forward but the constitution also shields us from behavior before a law or guidance.

You can't make something illegal today and prosecute someone for that behavior yesterday. The IRS is also bound by the constitution.

It does not look to me the IRS guidance and IRA itself prosecute someone for specific behavior yesterday.

However, for sure IRA picks what past behaviors are deemed appropriate and worthy to be rewarded.

In that regard, IRS's guidance of IRA asks for a state-level enforceable written bidding contract that demonstrates that the taxpayers show commitment.

The 5% safe harbor does align with Section 1603 and 2013-29 prior to IRA, so that is an established threshold that IRS picks as good past behaviors to reward(i.e. no scrutiny is needed).

I assume all CA dealers ask for some deposit to order i4. If any CA taxpayer pays such deposit(which is refundable in CA), of any amount, that already makes the contract non-bidding per 2013-29(which again predates IRA by 9 years).

My guess is IRS likely will just clarify to say 5% safe harbor is required, such that tax software can put that in their questionaires to ask taxpayers.