Potential Waste & Fraud in the EV Payout System

A recent government investigation found that nearly $74 million in taxpayer dollars may have been fraudulently claimed by individuals who did not qualify for that money. How were they able to do to that? Through the electric vehicle (EV) payout program.

Over a four-year span, U.S. taxpayers filed 16,510 tax returns that potentially claimed fraudulent taxpayer money for purchasing EVs. Some of these fraudulent claims were no doubt honest mistakes, while others likely gamed the system for their own personal benefit.

While it’s difficult to determine intent, further examination of the data reveals how some of these mistakes occurred. At least 1,500 of the tax returns mentioned above appear to claim credit for leased EVs. The federal payout goes only to the individual who purchases the EV, and in a lease situation, the automaker is the entity that qualifies for the federal tax credit – not the lessee.

The government investigation that uncovered this potential fraud and abuse recommended the federal EV payout program institute an enforcement mechanism that ties the vehicle identification number (VIN) to the tax return.