DAVID WILLIAM GETS SNOOKERED BY THE IRS
Illustration from SVA Certified Public Accountants, Madison WI, Milwaukee WI, Colorado Springs CO
This week’s Grassroots Corner comes from FAIRtax supporter David William, who clearly prefers the FAIRtax over the current income tax as administered by the IRS.
David signed on with us because he says the IRS has twice denied him benefits worth thousands of dollars. The latest problem was with a $4,000 tax credit buried within the Inflation Reduction Act. The credit was supposed to go to individuals who purchase qualified used "clean" vehicles, including electric cars.
You would think that if the IRS was offering a tax credit for buying a particular kind of car, claiming the credit would be a simple matter of submitting documentation to the IRS that a qualifying car had been purchased. Unfortunately, “simple” and “IRS” rarely go together in the same sentence.
In this case, the IRS required additional documentation from the seller that a qualifying car had been sold. David’s commercial seller was required to file IRS Form 15400, also known as the Clean Vehicle Seller Report. The form requires the seller to certify specific information about the sale of qualified clean vehicles, including the vehicle identification number and the date of sale. David’s seller was required to provide him with a copy.
The kicker seems to be that the seller had to file the form with the IRS on its portal within 72 hours of the sale date. For more information about this form, see https://www.irs.gov/credits-deductions/clean-vehicle-credit-seller-or-dealer-requirements. Apparently, either the seller was late or did not file the form at all.
Since the seller failed to meet the requirements, David was denied the tax credit on his 2004 tax return even though he had done absolutely nothing wrong.
David contacted the IRS Taxpayer Advocate, but the advocate was unable to assist him. David is certain that he’s not the only one who got caught in this sneaky little IRS trap.
David may have a claim against his commercial seller for allegedly mishandling the sale, resulting in the loss of the credit. We would guess that many sellers, even those in the commercial sector, are not well-versed in the idiosyncrasies of Form 15400. It is still bewildering to try to understand how a late filing of this form prejudices the IRS. David should not lose his credit on that technicality. But taxpayer prejudice for petty reasons happens to many honest taxpayers every day.
With the FAIRtax, there would be no discussion of income tax credits, such as the Clean Vehicle Credit, because there would be no tax on income. If Congress wanted to favor specific groups, such as purchasers of clean vehicles, it would have to make appropriations for all to see. In all likelihood, if Congress were to provide, say, a FAIRtax rebate to buyers of clean vehicles, it would have the buyer apply for the credit, thereby putting the buyer in control of the process.
If you know of a David William who, because of a technicality, was denied a tax credit from the IRS to which he was entitled. I would love to hear from you.
David signed on with us because he says the IRS has twice denied him benefits worth thousands of dollars. The latest problem was with a $4,000 tax credit buried within the Inflation Reduction Act. The credit was supposed to go to individuals who purchase qualified used "clean" vehicles, including electric cars.
You would think that if the IRS was offering a tax credit for buying a particular kind of car, claiming the credit would be a simple matter of submitting documentation to the IRS that a qualifying car had been purchased. Unfortunately, “simple” and “IRS” rarely go together in the same sentence.
In this case, the IRS required additional documentation from the seller that a qualifying car had been sold. David’s commercial seller was required to file IRS Form 15400, also known as the Clean Vehicle Seller Report. The form requires the seller to certify specific information about the sale of qualified clean vehicles, including the vehicle identification number and the date of sale. David’s seller was required to provide him with a copy.
The kicker seems to be that the seller had to file the form with the IRS on its portal within 72 hours of the sale date. For more information about this form, see https://www.irs.gov/credits-deductions/clean-vehicle-credit-seller-or-dealer-requirements. Apparently, either the seller was late or did not file the form at all.
Since the seller failed to meet the requirements, David was denied the tax credit on his 2004 tax return even though he had done absolutely nothing wrong.
David contacted the IRS Taxpayer Advocate, but the advocate was unable to assist him. David is certain that he’s not the only one who got caught in this sneaky little IRS trap.
David may have a claim against his commercial seller for allegedly mishandling the sale, resulting in the loss of the credit. We would guess that many sellers, even those in the commercial sector, are not well-versed in the idiosyncrasies of Form 15400. It is still bewildering to try to understand how a late filing of this form prejudices the IRS. David should not lose his credit on that technicality. But taxpayer prejudice for petty reasons happens to many honest taxpayers every day.
With the FAIRtax, there would be no discussion of income tax credits, such as the Clean Vehicle Credit, because there would be no tax on income. If Congress wanted to favor specific groups, such as purchasers of clean vehicles, it would have to make appropriations for all to see. In all likelihood, if Congress were to provide, say, a FAIRtax rebate to buyers of clean vehicles, it would have the buyer apply for the credit, thereby putting the buyer in control of the process.
If you know of a David William who, because of a technicality, was denied a tax credit from the IRS to which he was entitled. I would love to hear from you.
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WE'VE GOT YOU COVERED – IF YOU LET US KNOW.
WE'VE GOT YOU COVERED – IF YOU LET US KNOW.
As a reminder, event insurance coverage is available, but you must let us know. Once the event is underway, it's too late. If you are planning an event, let me know the who, what, when, and where, and I will get you a certificate of insurance.
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TAKE BACK CONTROL!
TAKE BACK CONTROL!
[i] Florida does not belong to the handful of states that sponsor disability insurance benefits and deduct that cost from payroll.
[ii] Florida Budget Report for 2025-2026.
[iii] Tuerck, Bachmann, Jacob, “Fiscal Federalism: The National FairTax and the States,” The Beacon Hill Institute, September 2007, at p. 17, Table 3.
[1] You can design your own business card. I had mine printed at https://www.vistaprint.com. Here’s mine. Please clear your design first with our Marketing and Communications Team Leader, Randy Fischer, randy.fischer@fairtax.org. Randy turns requests around quickly. We need to know where our logos and service marks are going.
[i] You can design your own business card. I had mine printed at https://www.vistaprint.com. Here’s mine. Please clear your design first with our Marketing and Communications Team Leader, Randy Fischer, randy.fischer@fairtax.org. Randy turns requests around quickly. We need to know where our logos and service marks are going.
[i] The nine jurisdictions with statewide sales taxes but no local sales taxes are Connecticut, Indiana, Kentucky, Maryland, Massachusetts, Michigan, New Jersey, Rhode Island, and the District of Columbia.
[ii] Tax Foundation: https://taxfoundation.org/data/all/state/2024-sales-taxes/
[iii] Ibid.
[iv] Fiscal Federalism: The National FairTax and the States, Tuerck, Bachman, and Jacob, The Beacon Hill Institute, September 2007, see the chart at p. 17.
[1] The average rates expressed as a percentage of AGI within each jurisdiction are: AL--0.10%; DE--0.16%; IN--0.62%; IA--0.11%; KY--1.33%; MD--2.40%; MI--0.17%; MO--0.22%; NY--1.63%; OH--1.57%; PA--1.23%. In CA, CO, KS, NJ, OR, and WV some jurisdictions have payroll taxes, flat-rate wage taxes, or interest and dividend income taxes. See Andrey Yushkov, Tax Foundation “State Individual Income Tax Rates and Brackets, 2024” February 2024; https://taxfoundation.org/data/all/state/state-income-tax-rates-2024/l See also Jared Walczak, Janelle Fritts, and Maxwell James, “Local Income Taxes: A Primer,” Tax Foundation, February 23, 2023, https://taxfoundation.org/local-income-taxes-2023/.
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