Clean Vehicle Credit Time of Sale Reporting Issues

As the April 15 tax filing deadline approaches, some dealers may be hearing from customers who (1) purchased clean vehicles in 2024 and (2) are facing issues filing their tax returns.  In particular, the IRS is telling these customers that they cannot claim their clean vehicle tax credits because the required Time of Sale reports for their purchases were not successfully submitted by the selling dealer.  To address this, the customers are asking dealers to submit the required 2024 Time of Sale reports to the IRS now, but the IRS is not accepting such submissions because, the IRS says, the Time of Sale reports were required to be submitted within 3 days of the transaction.

Absent relief, dealers may face significant financial losses, and customers may be unable to claim clean vehicle credits.

In recent weeks, NADA has frequently heard about situations where dealers failed to timely file Time of Sale reports for transactions in 2024. These situations involve both (1) advance payment transactions where the dealer applied the credit at the point of sale and (2) situations where customers chose to claim the credit when they file their taxes. In both situations, customers are facing issues filing their tax returns, because the return does not match a VIN in the IRS’s system since the dealer did not file the Time of Sale report.

In the first situation, dealers have been unable to secure reimbursement from the IRS for the credit. In the second situation, customers have been unable to receive the tax credit when filing their tax returns. In addition, some dealers are continuing to face Energy Credits Online (ECO) portal registration issues, because their registration has remained in “pending” status for several months.

Finally, the IRS has been exceedingly slow to respond to dealer inquiries through secure messaging in the ECO portal, even though the IRS has consistently held that secure messaging is the preferred means of communication. (Notwithstanding the foregoing, dealers are still encouraged to contact the IRS through secure messaging in the ECO portal and can refer to the IRS Secure Messaging User Guide for additional assistance.)

NADA is advocating aggressively for the IRS to remedy these issues. NADA has sent a letter to leadership at the U.S. Department of Treasury requesting timely relief for dealers. Members of Congress are also aware of these issues based on NADA advocacy and ongoing communication from constituents.

In particular, NADA has urged the IRS to immediately reopen another window for dealers to file late Time of Sale reports from 2024. NADA continues to ask the IRS to resolve all remaining portal registration issues because dealers are losing opportunities to sell the clean vehicles on their lots. NADA has also emphasized the importance of responding to dealer inquiries via secure messaging in the portal since many dealers have properly communicated with the IRS in a timely manner by informing the IRS of issues as they arise and providing the additional documentation that the IRS requests.

The current political landscape is also impacting the resolution of these Time of Sale reporting issues. 

• First, several political appointees to the Department of Treasury and the IRS are not currently in place. It is unlikely the administration will make significant policy changes until the Senate confirms the President’s nominees.
• Second, the new administration disfavors EV tax credits and may not prioritize this issue.
• Third, the President has made significant staff reductions at the IRS, and officials at Treasury have indicated that there is insufficient staff to handle taxpayer inquiries.

The combination of these events at the height of the tax filing season presents challenges in securing relief for dealers and their customers.

Nevertheless, NADA will continue to pursue all available avenues to achieve the best possible resolution to these issues and will update our members accordingly.