Republicans Demand Information From IRS After Finding Millions In EV Tax Credit Abuse

Republican senators are demanding answers from the IRS about how it enforces its EV tax credits after a watchdog for the Treasury Department found millions of dollars in "erroneously claimed" credits.

IRS Commissioner Charles Retting received a letter on Monday from senators who want information about "what appear to be systemic problems," according to The Hill

Fifteen senators signed the letter, including Senate Finance Committee Chariman Chuck Grassley and Senate Homeland Security and Governmental Affairs Committee Chairman Ron Johnson.

In September, the Treasury inspector general for tax administration (TIGTA) released a heavily redacted report finding that "the IRS has taken steps to address some of TIGTA’s previous recommendations to improve the identification and prevention of erroneous credit claims, many of the deficiencies previously identified still exist." 

It claimed there were more than $70 million worth of potentially erroneous plug-in credits claimed between 2014 and 2018. Back in 2011, the same watchdog found $33 million worth of plug-in and alternative vehicle credits that were claimed erroneously. 

The GOP senators said in their letter: " is troubling that these improper payments continue and have more than doubled in size in the eight years since they were first reported." 

The letter comes amidst a debate about expanding EV credits. Democrats have been pushing for the expansion while Republicans have largely pushed back. GOP senators say the program "overwhelmingly benefits wealthy electric vehicle owners in one state" and cited a WSJ article that showed about half of all EV sales occur in California.

The senators demanded information about the amount of credits erroneously claimed and whether or not the IRS has conducted their own internal audit. 

While a trade association for EV vehicles agrees that the IRS should investigate, it continues to advocate for expansion of the credits. 

Genevieve Cullen, president of the Electric Drive Transportation Association, said: “The plug-in credit was created with bipartisan support to promote investment in electric mobility and secure the energy, environmental and economic security benefits of the technology, including maintaining US competitiveness in the global marketplace. The credit has been demonstrably effective in advancing those goals.”

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