Inflation Reduction Act: New and Used Clean Vehicles

Inflation Reduction Act: New and Used Clean Vehicles

Clean Vehicle webinar –February 13, 2024
So, again, I want to welcome you. We're so   Glad you're joining us today for our webinar. 
So before we move on with our session,   Let's just make sure that you're in the right 
place. Today's webinar is entitled Inflation   Reduction Act: New and Used Clean Vehicles, 
Dealer Registration, Time-of-Sale Reporting,   Advanced Payment Registration, and Permission 
Management. Now, the webinar is scheduled for   About 75 minutes from the top of the hour. I think 
I said 60 minutes earlier, but we want to give a   Little more time for the Q& A, which we know 
many of you will have. So let me introduce our   Presenter. We're very fortunate today to have my 
colleague Roy Chaney. Roy is a Senior Stakeholder   Liaison with the Communications and Liaison 
Division of IRS. Roy services the greater Los   Angeles area. He has a Bachelor of Science degree 
in Business Administration from the University of   San Francisco. And Roy brings over 33 years of 
IRS experience to the Stakeholder Liaison role   By way of prior positions in customer service, 
in exam/collection offer in compromise, and field   Collection. And also joining us today to answer 
your questions will be Laura Schmitz. Laura is a   Subject matter expert on all areas involved with 
the Clean Vehicle Credits. So with that, Roy, I'm   Going to turn the microphone over to you to begin 
the presentation. And the floor is all yours, Roy.   All right. Thanks, Rich. So in today's agenda, we 
will review some disclaimers, the IRA overview,   The time-of-sale reports, the Clean Vehicle 
Credit under Internal Revenue Code 30D, the   Clean Vehicle Credit under Internal Revenue Code 
25E, transfer elections and advanced payments,   Other considerations, and then following up 
with IRS resources, questions and answers,   And then the closing. So under the disclaimers, 
this deck provides an overview of certain   Inflation Reduction Act tax provisions for 
general informational purposes only and is   Not itself a tax guidance. The content in this 
presentation is based on a revenue procedure   And a notice of proposed rulemaking and other tax 
guidance on This presentation relies on   Simplifications and generalizations to convey 
high-level points about IRA tax provisions.   Treasury and the IRS will carefully consider 
feedback submitted during the public comment   Period for proposed and temporarily regulations 
before issuing final rules. So please refer   To the guidance issued by the IRS for detailed 
information on the rules associated with the IRA   Tax provisions. So, now, let's share an IRA clean 
vehicle overview. So in discussing the overview,   The Inflation Reduction Act, or IRA, makes the 
largest investment in clean energy in the United   States history, and much of that investment is 
delivered via tax incentives. Eligible buyers may   Be able to claim a tax credit of up to $7,500 
for purchasing a new clean vehicle and up to   $4,000 for a previously-owned clean vehicle. And 
information about eligible vehicles is available   At And for vehicles placed in 
service January 1, 2024 or later, dealers must   Register with the IRS Energy Credits Online and 
use the tool to electronically submit time-of-sale  

Reports. Continuing with the overview, an initial 
user authorized to represent the dealership should   Promptly register. Buyers will not be able to 
claim a clean vehicle tax credit if the dealer has   Not registered and does not successfully submit 
a time-of-sale report to the IRS Energy Credits   Online. IRS Energy Credits Online will accept 
or reject submitted time-of-sale reports from   The registered dealer in real time, including 
checking the VIN for each time-of-sale report   Against a list of eligible VINs manufacturers will 
provide the IRS. Buyers and dealers should receive   Online confirmation of a successfully submitted 
time-of-sale report before the final sale. Now,   Continuing again with more of the overview, 
as of January 1, 2024, buyers can choose to   Transfer a Clean Vehicle Credit to a registered 
dealer in exchange for an equivalent reduction   In the purchase price of the vehicle. That means 
eligible buyers can get money upfront for buying a   Clean vehicle rather than having to wait to claim 
the credit on their tax return the next year. The   Transfer is treated as a down payment, reducing 
the amount financed or final cash price, not a   Reduction of the negotiated purchase price. When 
a buyer transfers a tax credit, registered dealers   Must provide certain disclosures and receive 
attestations from the buyer. Continuing with   More overview, the IRS will pay registered dealers 
electronically, typically within 72 hours after   The 48-hour void period, for elected transfer 
clean vehicle tax credits. Register dealers are   Not required to verify a buyer's income. Register 
dealers are required to inform buyers of income   Requirements since the buyer is responsible for 
repaying the full amount of any transferred credit   When they file their tax return if they exceed the 
income limitations for the tax credit. Now, let me   Share information on the time-of-sale report for 
2023. So for vehicles placed in service within   Calendar year 2023, sellers must file reports 
within 15 days after the end of the calendar year,   For example, January 15 of 2024. Now, the IRS 
extended the due date sellers must provide these   Reports until February 15 of 2024. You may submit 
copies of your seller reports provided to eligible   Buyers via fax to the fax number 855-755-7437. So 
continuing with vehicles placed in service within   Calendar year of 2023, sellers or dealers may also 
submit individual seller report copies of the Form   15400 or equivalent forms containing all required 
data the seller or dealer used in calendar year   2023. Sellers or dealers that used reasonable 
alternatives to Form 15400 in providing the   Required seller reports to buyers do not need 
to prepare the information in the Form 15400   Format. So, now, let's talk about the time-of-sale 
reports for 2024 and later. So vehicles placed in   Service in the calendar year 2024 and after, the 
sellers must submit all reports through IRS Energy   Credits Online within three calendar days of 
the date of sale. And they must also provide the   Buyer with a copy of the accepted seller report 
submitted to IRS Energy Credits Online within   Three calendar days of the date of submission. 
So continuing with the time-of-sale reports for   2024 and later, vehicles placed in service within 
calendar year 2024 and after continued IRS Energy  

Credits Online provides real-time confirmation 
of a vehicle's eligibility using VINs provided   By manufacturers, and the IRS strongly recommends 
this submission occurs prior to finalizing a sale   And when the buyer places the vehicle in service. 
Dealers and sellers may submit the seller report   To IRS Energy Credits Online within three 
calendar days of the time-of-sale. Rich,   I'll hand it over to you to share some answers 
on a couple of common questions. Well, thank you,   Roy. Yeah, we do have a couple of early questions 
that have come in, so I'd like to tee these up for   Our subject matter expert, Laura. So the first 
question, Laura, one of the attendees is asking,   Is there a list of vehicles that qualify for the 
new Clean Vehicle Credit? Hi, thank you, Rich and   Roy. Yes, there is a list of the mixed models. The 
Department of Energy hosts a purchaser-friendly   Version of the IRS list of eligible clean 
vehicles, including the battery-electric,   Plug-in hybrid, and the fuel cell vehicles that 
qualifying manufacturers have indicated to the IRS   Meet the requirements to claim new Clean Vehicle 
Credits, and that list is on,   And there's no space between fuel and economy. 
It's This list is updated as   Manufacturers provide updated information. You 
can go right to tax credit,   Verifying the manufacturer's suggested retail 
price, final assembly, or then specific vehicle   Information may be necessary for certain makes and 
models. And this is referenced in our FAQs that we   Have on Final confirmation of vehicle 
qualification is done at the time of purchase   When you're working on that time-of-sale report, 
the seller must provide and when you're working   On that time-of-sale report, so when you're 
entering in the vehicle identification number,   If it will come back as successful on that screen, 
if it is one that the manufacturer has submitted   As eligible for that particular credit. Rich? 
Well, thank you, Laura. And the audience will   Have much more to say on the time-of-sale report a 
little bit later. So, Laura, here's an interesting   One on the tax consequences for the credit, if 
any. So how are the transfer tax credits from the   Buyer of the vehicle, the eligible vehicle, back 
to the dealer or seller, how are these treated for   Tax purposes both from the perspective, I guess, 
first of the dealers who are getting the advanced   Payments and then for the buyers? For the dealers, 
the advance payments received by the registered   Dealer are treated as monies received from the 
buyer. For example, the car negotiated price is   $50,000. The buyer elects to transfer the eligible 
credit to the registered dealer. The sale price   Is still $50,000 with $7,500 coming from the IRS 
on behalf of the buyer. And the buyer is paying   And/or financing the balance. For tax purposes, 
there is a sale of $50,000, when the $7,500 is   Received, such payment is treated as repaid by 
the buyer to the registered dealer as part of the   Purchase price of the vehicle and, therefore, is 
treated as included in the total amount received   For the sale transaction. For the buyer of the 
vehicle, the payment made to the registered dealer   On behalf of the buyer from the IRS. The amount 
that the dealer pays or provides to that buyer  

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Is a cash payment or can be a down payment or 
partial down payment depending on what the buyer   Has requested. This is not included in income from 
the buyer. Such payment is made is treated as an   Advanced payment on the credit to the buyer on 
behalf of the IRS. And under federal tax return,   The buyer is still required to elect the credit 
on their tax return and is required to report the   Transfer election information. And so that's one 
important thing. They still have to report that   Credit on the election to claim that credit on 
their tax return and they will be reporting the   Transfer election information in addition to that. 
Rich, back to you. Thank you, Laura. Great last   Point. So for these 2024 advanced payments where 
the buyer is electing to transfer the credit,   They will have to on their 2024 tax return filed 
next year, fill out a form which we'll look at   Later to show that they made that election. Great, 
great information. Thank you, Laura. So, Roy,   Let me turn it back over to you to drill down 
a bit on the Clean Vehicle Credit under 30D.   Thanks, Rich. I appreciate that. So let's explain 
the Clean Vehicle Credit under IRC 30D. The IRA   Made several changes to the code for new qualified 
plug-in electric vehicles or fuel cell vehicles.   Eligible vehicles may qualify for a tax credit 
of up to $7,500. The vehicle requirements are   Gross vehicle weight rating of less than 14,000 
pounds; final assembly must be in North America;   Minimum battery capacity of 7 kilowatt hours; and 
vehicles must be made by a qualified manufacturer.   Now, continuing with clean vehicles under IRC 
30D, the vehicle requirements, manufacturer   Suggested retail price limitations apply, based 
on the type of vehicle, $80,000 for vans, sport   Utility vehicles and pickups, and $55,000 for 
other vehicles. Income limits apply to taxpayers.   $300,000 for joint filers, $225,000 for head of 
households, $150,000 for all other taxpayers.   Taxpayers can use modified adjusted gross income 
for year in which the vehicle was purchased   Or for year immediately preceding year of the 
purchase. So continuing with the Clean Vehicle   Credit, again, under 30D vehicle requirements. For 
vehicles placed in service on or after April 18,   2023, the credit amount will depend on the vehicle 
meeting the critical minerals requirement. Maximum   Credit of $3,750 and/or the battery components 
requirements, which is a maximum credit also of   $3,750. And if a vehicle meets both of those 
requirements, the maximum credit remains at   $7,500. So, now, let's talk about seller 
requirements under Clean Vehicle Credit,   The Internal Revenue Code 30D. Sellers must 
provide reports to the buyer and the IRS regarding   The sale of the vehicle on which include the names 
and taxpayer identification numbers of the seller   As well as the buyer, the vehicle identification 
number of the new clean vehicle, battery capacity   Of the new clean vehicle, and verification that 
the buyer is the original user of the new clean   Vehicle. Continuing with seller requirements 
under the Clean Vehicle Credit, again,   Under Internal Revenue Code 30D, the date of 
the sale and the sales price of the vehicle, the   Maximum credit allowable for the new clean vehicle 
being sold, and for sales after December 31, 2023,  

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The amount of any transfer credit applied to the 
purchase. Now, I will cover previously-owned clean   Vehicles under Internal Revenue Code 25E. So for 
previously-owned clean vehicles under Internal   Revenue Code 25E, the purchase of an eligible 
previously-owned clean vehicle with the sales   Price of $25,000 or less may qualify for a tax 
credit of 30% of the sales price up to a maximum   Credit of $4,000. In order for the previously 
owned vehicle to qualify, the sales price must be   $25,000 or less, which includes the dealer-imposed 
costs or fees, but does not include any separate   Financing, extended warranties, insurance, and 
separately-stated taxes, as well as fees required   By the State or Local law. Again, continuing with 
previously-owned Clean Vehicle Credit under 25E,   The model year of the vehicle must be at least 2 
years earlier than the calendar year in which a   Taxpayer acquires the vehicle. The gross vehicle 
weight rating must be less than 14,000 pounds, and   The battery capacity must be at least 7 kilowatt 
hours. The vehicle must not have already been   Sold as a used vehicle after August 16 of 2022 
based on the vehicle history reports. So, let's   Move to previously-owned Clean Vehicle Credits 
under 25E for the buyer requirements. Under the   Buyer requirements, the modified adjusted gross 
income limitation can be based on the tax year   In which the vehicle is purchased or the tax year 
immediately preceding purchase of the qualified   Vehicle. For joint filers, it's $150,000. For head 
of household filers, it's $112,500. And for all   Other filers, again, $75,000. So, let's continue 
with buyer requirements for previously-owned Clean   Vehicle Credits under IRC 25E. The buyer is not 
the original owner. Purchase of the vehicle was   For personal use and not for resale. The buyer 
cannot have claimed another used Clean Vehicle   Credit in the 3 years before the purchase date. 
And the buyer cannot be claimed as a dependent   By another taxpayer. So, now, I'll talk about 
seller requirements for previously-owned Clean   Vehicles Credit under Internal Revenue Code 25E. 
Previously-owned Clean Vehicle Credits under   Internal Revenue Code 25E seller requirements, you 
must be one a licensed dealer, and a report with   Required information to the buyer and IRS at the 
time-of-sale will contain the following: The name   And taxpayer's full identification number of the 
dealer are entered; the taxpayer identification   Number, or TIN, is truncated on the form, so only 
the last four digits are displayed; the name and   Full taxpayer identification number of the buyer 
is entered. And, again, the form will only display   The last four digits and also added in the vehicle 
identification number. So, let's continue with   Seller requirements for previously-owned Clean 
Vehicle Credits under Internal Revenue Code 25E.   So a report with required information to the 
buyer and IRS at the time-of-sale will contain:   One, the battery capacity; the sales price 
of the vehicle; the date placed in service,   Or placed in service date; and the maximum credit 
allowable for that particular VIN. So, now, Rich,   I believe you have some other common questions 
for Laura at this time. I do indeed. Thank you,   Roy. So, Laura, here's a question that we 
in stakeholder liaison hear frequently about  

Credits. Particularly, is this new Clean Vehicle 
Credit refundable or able to be carried forward?   And let me just explain for those who aren't fully 
familiar with refundable. Refundable means that if   A particular credit exceeds the tax liability of 
the taxpayer, the balance can be refunded. And   Carry forward means that if it's a non-refundable 
tax credit, the remainder after being used against   The current tax could be carried forward to 
another year. So Laura, is the new Clean Vehicle   Credit either refundable or able to be carried 
forward to another tax year? Hi. Thank you,   Rich. The new Clean Vehicle Credit can be claimed 
to the extent of reported tax due of the buyer,   And it cannot be refunded. The new clean vehicle, 
both the new clean and the used clean vehicle,   Cannot be carried forward to the extent for 
personal use on the Form 1040 Schedule 3. However,   It's a new Clean Vehicle Credit for business 
purposes. Then it can be carried to the extent   That it's claimed for business use on Form 3800, 
which is the general business credit form that   Businesses attached to their tax return. And I 
just want to give an example, if I buy a used   Clean vehicle, I'm an individual and I meet 
all the requirements and my tax liability,   I have X amount and $10,000 in taxable income, 
but I only have $1,000 in tax liability. When   It comes down to it, even if I have a $4,000 
credit, I only receive the benefit of $1,000.   I don't get a refund of the other $3,000 and it 
doesn't carry forward. That is the same for the   New Clean Vehicle Credits. But to the extent that 
it's used for business purposes and it's claimed   As a business expense – it's used for business, 
then the credit is allowed on $3,800, which does   Allow the carrying of the credit. Rich? Thank 
you, Laura. That's very helpful information So,   Roy was just discussing the previously-owned 
Clean Vehicle Credit under 25E. So, Laura,   The question coming in is how will I know if a 
previously-owned clean vehicle may be eligible for   That credit? Well, first of all, I would start by 
looking at the brand and models that are eligible   For the used clean vehicle on, 
and you can go to   And I would see if that vehicle is listed there, 
and they have some other additional very helpful   Information there on, what's eligible and what's 
not eligible? The vehicles, it was mentioned   Before, Roy mentioned, the sale price has to be 
$25,000 or less. Sometimes we've been asked a key   Question with regards to the $25,000. Does that 
$25,000 include delivery costs and everything   Else? And yes, it does. But it doesn't include 
the sales taxes, financing charges, and everything   That Roy had mentioned. The model year must be at 
least 2 years earlier than the current calendar   Year. So if I'm purchasing that vehicle in 2024, 
the model year has to be 2022 or older. And it   Can't have already been transferred to a qualified 
buyer after August 16 of 2022. So for dealers,   That means you need to check car facts and stuff 
like that, as it's been already transferred to   Somebody else as a used vehicle. And it must be 
primarily for use in the United States. And the   VIN has to have been reported as eligible by a 
qualified manufacturer. So if you come across a  

Used vehicle that you're thinking, Hey, this 
should qualify, one of the key things is the   Qualified manufacturer has to report it as being 
an eligible VIN. As Roy mentioned, for the buyer   Themselves in order for the buyer to qualify, they 
must not have claimed a used vehicle credit in the   3 years preceding the purchase date. And if the 
individuals adjusted gross income cannot exceed   Certain limits that Roy had mentioned earlier. 
Thank you, Rich. Well, thank you, Laura. So,   Roy, let me turn it back over to you to begin 
discussing the dealer's transfer rules. All   Right. Thanks, Rich. I appreciate that. The IRA's 
dealer transfer rules allow individual buyers to   Get the benefit of the new Clean Vehicle Credit 
and previously-owned Clean Vehicle Credit at the   Point of sale. So for buyers to be eligible to 
elect to transfer a credit, starting January 1,   2024, the dealer they purchase an eligible 
vehicle from must first have completed the   Advanced Payment Registration on IRS Energy 
Credits Online and receive their advanced payment   Dealer Registration ID. So dealer transfer rules 
continue. So to provide clarity and certainty   To individual buyers, the registered dealer 
will provide buyers with required disclosures   As part of the credit transfer and electronic 
time-of-sale submission process, and confirmation   That the vehicle they're buying is eligible for 
credit via a time-of-sale report. The guidance   Proposes rules regarding who is an eligible buyer 
to elect to transfer the credit to the dealer   And under what circumstances such buyers may have 
to pay back some of the transferred credit. The   Guidance also provides clarity regarding the 
federal income tax treatment of the transferred   Credit and advanced payment for the buyer and 
the dealer. So, let's continue with the dealer   Transfer rules. So, again, under dealer transfer 
rules, dealers generally will be in the same   Positions as if no credit transfer or advanced 
payment occurred. Eligible buyers may transfer   The full value of the new or previously-owned 
vehicle credit regardless of their individual tax   Liability, and the payment made by the registered 
dealer to the consumer is not includible in the   Gross income of the buyer. So, now, I will 
discuss the dealer registration process.   So under the dealer registration process, the 
IRS published a Clean Vehicle Registration User   Guide that walks through each step of the dealer 
registration process. An individual rep of the   Dealer or seller who is currently authorized 
to legally bind the dealer or seller with the   IRS can complete the registration using IRS Energy 
Credits Online. Registration is initially limited   To one authorized official per dealership. 
The initial user will be able to authorize   Additional users to submit time-of-sale reports 
on behalf of the dealer. So continuing again with   The dealer registration process, registration 
is initially limited to one authorized official   Per dealership. The initial user will be able to 
authorize additional users to submit time-of-sale   Reports on behalf of the dealer or the seller. 
To complete registration, the IRS will validate   The personal identity of your individual rep as 
a program integrity measure. The IRS uses,  

A technology provider, to provide identity 
verification and sign-in services. If you   Have an account, just sign in. Don't create 
a new account for the dealership. If you're   A new user, have your ID ready. You'll verify 
your personal identity, not your dealership's   Information at this step. So continuing with 
the dealer registration process, you will then   Be able to create an IRS Clean Energy business 
account. You need the dealership's name, the EIN,   The bank account, and the routing numbers, dealer 
state license, if it's applicable, and associated   Proof of license. You will also include your 
name as the authorized official, mailing address,   Phone number, and email information. Dealers 
may choose to register only to submit required   Time-of-sale reports or to also receive advance 
payment for transferred clean vehicle credits.   A registration ID is provided to the dealer 
once the IRS has validated the registration   Information. Continuing with more dealer 
registration process. First, if you have   An account, simply sign in. If you do not 
have one, you'll need to create a new account.   Personal identity verification is required. So 
have your personal identification ready, not your   Business information. Your personal information 
used to create your account will not be   Shared with the dealership or the seller. So, 
continuing with the dealer registration process,   Click Start Authorization for clean energy 
business account authorization to create your   Clean energy business account. You will need to 
register the entity by providing the relevant   Business information such as the EIN, 
mailing address, and the bank account   Information if the dealership wishes to register 
for advance payments. Once registered, dealers   And sellers will be able to submit time-of-sale 
reports and register to obtain a registration   ID to receive advanced payments. To submit 
time-of-sale reports to the IRS, click on Go   On your Dealer Registration homepage. So, Rich, 
I'll turn it over to you to provide some answers   To some more common questions the audience may 
have. Well, thank you, Roy, and thank you for   Discussing the dealer registration process. Before 
I give, Laura, a couple of questions involving   Dealer registrations, I just want to point out, 
in the resources today, our Communications and   Liaison division has created Publication 5867, 
Clean Vehicle Dealer and Seller Energy Credits   Online Registration User Guide. This is well 
worth looking at if you haven't looked before,   And I'm speaking specifically to 
dealers who are registering on ECO,   Because this guide has screenshots of each step 
in the registration process. So Laura, yeah,   We have several questions here I'd like to get to 
before I turn it back to Roy. First question is,   May a buyer claim the new or previously owned 
clean vehicle tax credit if the dealer or   Seller of that vehicle is not registered with the 
Internal Revenue Service? Hi. Thank you, Rich. No,   The starting with vehicles placed in service 
January 1 of 2024 or later, buyers will only be   Able to claim credit if the seller has registered 
with the IRS and successfully submit the seller  

Report through the IRS Energy Credits Online. The 
submission is done at the time-of-sale through the   IRS Energy Credits Online portal and the seller 
must provide a copy of the successfully submitted   Seller report to the buyer. Rich? Thank you, 
Laura. So the next question is an interesting one   And I've seen it before. What is the difference, 
if any, between a dealer registering for seller   Reporting and registering for the advanced payment 
program? Is there a difference, Laura? Thank you,   Rich. Yeah, there is a difference. Registration 
to submit seller reports will allow the dealers,   Sellers, the ability to submit seller reports to 
the Energy Credits Online when selling eligible   Vehicles. This does not include the ability 
to receive advanced payments. A completed   Registration for the advanced payment program 
granted the dealer the ability to submit seller   Reports when the selling a vehicle and submit 
a request for the advanced payment to the IRS.   For the advanced payment program, one of 
the underlying requirements is that only   Licensed dealers may register to receive 
advanced payments. And when your advanced   Payment registration is completed, you receive 
a specific advanced payment dealer registration   Number. In addition to being a licensed dealer, 
you cannot have any tax compliant – you have to   Be fully tax compliant. That means all returns 
or forms are up to date on filing and there isn't   Any balance due on any particular account. 
Thank you, Rich. Great information, Laura,   And thank you for clarifying the distinction 
between registering for time-of-sale reporting   And registering for the advanced payment program. 
And one final question before we turn it back to   Roy. Is the dealer required to register for both 
the seller reporting and the advanced payment? No,   If somebody just doesn't want to worry about the 
advanced payment program, they can just register   For the seller reporting. Anybody that's doing 
the advance payments, they'll be registering for   The seller report first. That's the first step 
of registering for the advance payment program,   But if somebody just wants to register for a 
seller reporting, they can do that. And Laura,   Am I correct that only licensed dealers can be 
registered to receive advance payments? That   Is correct. And as I mentioned before, yes, for 
the underlying requirement for registering for   Advance payments is that the seller registering 
must be a licensed dealer, and they must also be   Tax compliant in order to register for advance 
payments. Thank you, Rich. Thank you very much,   Laura. Great information. So, now that we've 
talked about registration, let's turn it back to   Roy to talk about the time-of-sale reporting. Roy? 
Thanks, Rich. So, yeah, let's go over time-of-sale   Reporting. Once your business has completed 
registration, you will be able to complete new   Vehicle time-of-sale report under Internal Revenue 
Code 30D; you'll be able to complete the used   Vehicle time-of-sale report under Internal Revenue 
Code 25E; submit your time-of-sale report; and the   Primary user will also be able to approve, deny, 
or manage users associated with the dealership   Or the seller's business accounts. So continuing 
with the time-of-sale report, starting in 2024,  

All qualifying new and used clean energy vehicles 
must have a time-of-sale report submitted to IRS,   And a copy must be provided to the buyer. IRS 
Energy Credits Online first requires general   Information be entered. This includes the 
Vehicle ID Number, or the VIN, the taxpayer   Identification number, and the buyer's name. The 
buyer's name must match Social Security records.   So let's move on to more time-of-sale reporting. 
In completing the vehicle information, the second   Step is completing the vehicle information. This 
includes the date of sale, the date vehicle placed   In service, which might be different than the 
date of sale, model year, battery capacity,   And sales price. This information should match 
the provided manufacturer's details regarding   The specific VIN reported. If the buyer does not 
choose to transfer their credit to the dealer, you   Will indicate a transfer credit election was not 
made by clicking the radio button. Continue with   Time-of-sale reporting, and completing the vehicle 
information, the dealer will also read and make an   Attestation, under penalties of perjury that the 
information entered in the time-of-sale report   Is true to their knowledge. The attestation is 
made via checkbox, which acts as an e-signature.   If a credit transfer to a dealer with an advanced 
payment registration ID is elected by the buyer,   Additional fields will need to be completed 
as discussed in later slides. So, now,   Let's talk about some buyer elections. So, under 
the buyer elections, the buyer has the option to   Elect the Clean Vehicle Tax Credit. They may elect 
it on their personal tax return using Schedule A,   Attaching Form 8936; or they may elect to transfer 
of the credit to the dealer with an advance   Payment registration ID before the purchase is 
completed. They still report the election on their   Personal tax return, but also report the transfer 
of the credit. So, continue with buyer elections,   After the vehicle information has been completed, 
the buyer will need to decide if they elect to   Transfer the credit. The dealer will need to make 
an original use attestation and an attestation,   Under penalties of perjury, that the information 
entered in the time-of-sale report is true to   Their knowledge. Both attestations are made 
via separate checkboxes that will act as an   E-signature. The dealer will receive confirmation 
of the qualified credit amount. After this step   Is completed, if the buyer makes the election, 
the dealer with an advanced payment registration   ID will then move forward to claim the advanced 
payment. So, now, let's talk about the advance   Payment. Under the advance payment, the vehicle 
and credit amount will be auto-populated from   Previous input. The dealer with an advance payment 
registration ID will be responsible for providing   Verification of the buyer's information. The 
buyer will read and make an attestation via   Checkbox and type their first and last name acting 
as an E-signature that they agree to the buyer's   Terms of the agreement. After the buyer and 
seller information is correctly input, there   Is an opportunity for review. Moving on to report 
submission. After the information is submitted,   You will receive verification of a successful 
submission. After this, you will need to download  

The report to view the PDF copy. The information 
will auto-populate. After you verify the dealer,   Vehicle, the buyer, and credit information, 
the time-of-sale is successfully submitted,   A copy can be then downloaded. Provide the 
buyer a copy of the time-of-sale report,   Which will be needed to complete their personal 
tax return. You can void a time-of-sale report   Up to 48 hours after submission. Advanced payment 
should be deposited into the bank account within   72 hours after the 48-hour void period. If 
completed correctly and timely, the dealer will   Receive verification of the void report. Advanced 
payments will only be made to accounts provided by   The dealer or the seller during registration. It 
cannot be sent to another account. The tool will   Store both successfully submitted and voided 
time-of-sale reports. So, now, I'll cover some   Other qualified vehicles. So the buyer still has 
the option to directly receive the CEV credit   On their personal tax return or transfer to the 
seller for the advance payment. Publication 5867,   Clean Vehicle Dealer and Seller Energy Credits 
Online Registration User Guide is available   With examples and step-by-step instructions. 
Both dealer and seller used vehicle under IRC   25E time-of-sale report needs certain used clean 
energy vehicles are eligible to receive a CV tax   Credit. A time-of-sale report is also required for 
qualified vehicles. The system follows the same   Path as new qualifying vehicles. The credit dollar 
amounts available are reduced for used CV. So,   Let's review important considerations for transfer 
elections. So under important considerations   For transfer elections, as of January 1, 2024, 
buyers can choose to transfer their new or used   Clean Vehicle Credit to a dealer with an advanced 
payment registration ID in exchange for the credit   Amount to be used as a payment towards the cost 
of the vehicle. The dealer must provide the buyer   With certain required information and must also 
submit a time-of-sale report containing buyer and   Vehicle information to IRS Energy Credits Online. 
So, let's continue with important considerations   For transfer elections. Information and 
disclosures the dealer must provide under   Important considerations for transfer elections 
include the following: potential repayment to the   IRS; a copy of the submitted time-of-sale 
report to IRS Energy Credits Online and   Confirmation the report was accepted. Buyers 
will need this report when filing their tax   Return. If a buyer transfers a credit, but exceeds 
modified adjusted gross income limitations in both   The year the vehicle is placed in service, and the 
prior year, the buyer must repay to the IRS the   Full amount of any transferred credit when they 
file their tax return. To claim the credit, the   Buyer will file Form 8936 Clean Vehicle Credits 
with their tax return. Because time-of-sale   Reports are accepted in real time, buyers can 
rely on the information submitted to and accepted   By the IRS regarding the vehicle's eligibility. 
So, now, I'll talk about identity verification.   So under identity verification, all users will 
need to verify their personal identity. The IRS   Uses, a technology provider, to provide 
identity verification and sign-in services. If  

You have an account, just sign in. Don't 
create a new account for your business.   If you're a new user, have your government issued 
photo identification ready. Verify your personal   Identity, not your business information, with Register your dealership to enable credits   For clean vehicle buyers, and that can be found on 
Internal Revenue Service, So, let's cover   The IRS Energy Credits Online functionality. 
So users can register an organization to use   IRS Energy Credits Online functionality for one 
or more of the following types of tasks, clean   Vehicle dealer or the seller, and that's to submit 
required time-of-sale reports and request advance   Payment for tax. Clean vehicle manufacturer and 
that's to enter qualified manufacturing agreements   And submit required periodic reports and clean 
energy elective pay or transfer election entity or   Semiconductor manufacturers and that's to request 
registration numbers for clean energy tax credits   Or as a semiconductor manufacturer. So, now, I 
will discuss the initial user registration. So   Under the initial user registration to register, 
please visit Energy for more   Information. The first user to register on behalf 
of an entity will be assigned as a Clean Energy   Officer for the entity. This user has the access 
to all IRS Energy Credits Online functionality for   The entity. This includes the ability to authorize 
additional users and assign permissions governing   What IRS Energy Credits Online functionality 
subsequent users may have. This user must be   Currently authorized to legally bind the dealer 
or seller with the IRS. So continuing with initial   User registration for any subsequent users to gain 
access to IRS Energy Credits Online functionality,   The first user to register on behalf of an 
entity must first authorize each subsequent   User's access. The first user can approve 
additional users with a Clean Energy Officer   Role. Any user with the Clean Energy Officer role 
in IRS Energy Credits Online can modify or revoke   Permissions for any user associated with the 
entity, including the first user. So, now, let's   Talk about any additional users. So once the first 
user has created an account for the organization,   Share the link with additional users who should 
have access to IRS Energy Credits Online. Each   Additional user will need the following to 
create an account associated with the entity:   An account is needed to verify the user's 
identity. Use an existing account or have   Government issued photo identification ready to 
create a new account; the entity's EIN and   The entity's name as shown on the most recent tax 
return; and their title within the organization.   So continuing with additional users, so to notify 
the appropriate user of the authorization request,   Once the new login account and account creation 
request is submitted, notify the appropriate   Individual in your organization that you submitted 
a request. Authorized users can review the request   In the Manage Business Users tab of the entity's 
account. To receive authorization, a Clean Energy   Officer for your entity will need to approve the 
request in IRS Energy Credits Online. And under   The user roles, the users who are responsible 
for managing an entity's users and assigning  

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Permissions, for example, the Clean Energy 
Officers, should pay close attention to the roles   Assigned to other users in their organization. 
All Clean Energy Officers have access to all IRS   Energy Credits Online functionality. But things 
to keep in mind when you're adding users. Clean   Vehicle dealers or sellers should generally 
assign employees who need access to submit   Time-of-sale reports and/or request Advance 
Payment Access the dealer or seller role. So,   Let's continue with user roles and things to keep 
in mind when you're adding users. So some things   To keep in mind when adding new users, users 
assigned the dealer/seller role can't manage other   Users' permission. Clean vehicle manufacturers 
should generally assign employees who need access   To submit periodic reports. So, next, I'll share 
some clean energy vehicle tax credit resources   That we have. So under the clean energy vehicle 
tax credit resources, we have Publication 5867,   Clean Vehicle Dealer and seller Energy Credits 
Online Registration User Guide. Publication   5867-A, which is the Clean Vehicle Time-of-Sale 
Reporting User Guide. For email for questions,   Please email And dealers are strongly encouraged   To sign-up to receive updates from IRS e-news 
subscription. Please select e-news for business   And sign-up for e-news for the clean vehicle 
industry. So, now, I'll pass it to Rich to   Start the question-and-answer session. Rich, 
I'll turn it over to you. Thank you, Roy. Great   Information you shared with us today. So I'm going 
to bring back my colleague, Laura Schmitz. Laura,   As I mentioned, is the technical subject matter 
expert for the Clean Vehicle Credit. And, Laura,   You and I have discussed previously, and I know 
you've gotten questions, and I know you want to   Address leases. And we have two questions 
that came in. One question simply asked,   Is the credit available for leases? And then the 
second question is, do lease vehicles qualify?   And then a third question on leases, can the 30D 
credit, that's the credit for new clean vehicles,   Be applied to a lease? If so, does the lesser 
need to transfer it, lesser transfer it to the   Lessee? So can you give us a little background on 
how leases impact these credits, Laura? Hi. Yes,   For leases, as you guys are aware, especially 
with the dealers, as you're aware, if I walk   Into a dealership and I lease a vehicle, it's 
the lessor, it's the finance company that owns,   That actually takes title of the vehicle. It is 
the finance company, or in the case of a lease,   The one that's actually leasing the vehicle to me 
that it's actually takes ownership of that vehicle   And that vehicle is titled in their name. As such, 
they are the owner of the vehicle and they are the   Ones that can actually elect to take the credit. 
Businesses cannot do – under 30D, a business could   Actually, if the vehicle is eligible for a 30D 
credit, they could actually claim the credit   Under 30D on their tax return, and that is done 
just like everybody else, they could do it as 30D,   But they cannot elect to transfer the credit 
as individuals could actually do. If the   Business wanted to claim the credit under 30D, a 
time-of-sale report would be required. In general,  

Though, we're seeing that they'll be claiming the 
credit under commercial Clean Vehicle Credits,   Which do not require a time-of-sale report, and 
that is done, again, on Form 8936, Schedule A, but   That particular credit, commercial Clean Vehicle 
Credits do not require a time-of-sale report, so   The dealer would not need to submit a time-of-sale 
report for the lessor in the lessor's name and et   Cetera. I'm just trying to make sure I covered, 
did you mention like three different questions,   Rich? So, even if I walk into a dealership and 
I end up leasing a vehicle and the lessor of the   Finance company is saying, Hey, I'm giving you 
the benefit of the credit by having your lease   Payments be lower, the leasing company is still 
the one that's getting the credit. They're just   Reducing my lease payments, so that's how 
I'm benefiting from it, but I do not, the   Person that's leasing the vehicle does not get the 
credit, they don't get a time-of-sale report, they   Don't get to claim the credit on their tax return 
or anything like that, and there's nothing in the   Statute that allows for them to split it with us 
or anything like that. The benefit that they're   Giving us is they're giving the people leasing 
the vehicle is by providing lower lease payments.   But that is at their discretion. But it's 
the finance company, the leasing company that   Actually claims to credit on their tax return. 
Does that answer all of that, Rich? I think it   Did. And just for everyone's awareness, Laura 
mentioned the commercial Clean Vehicle Credit   Under the Inflation Reduction Act, and that's 
we did not discuss that today, it's 45W, but we   Do have frequently asked questions on that 
go into the requirements for that commercial Clean   Vehicle Credit. So a couple of questions on the 
registration process, Laura. Who at the dealership   Should complete the initial registration on behalf 
of the dealer or seller of the clean vehicles?   The individual representative for the dealership, 
the dealer who is authorized to legally bind that   Dealership, to bind the dealer in these matters, 
can complete the initial registration through   The Energy Credits Online. That is who would be 
the one. Okay, great. And just as a refresher,   Again, what information is required for dealers 
registering? The dealer should be prepared to   Account for the business information, including 
the business with EIN, address, phone number,   And email. Also, if the dealer is a licensed 
dealer and not just a seller, they should also   Have the dealer's license number and actually a 
picture of it that they can upload when they're   Registering. They should have that available. 
And if they're registering for advanced payments,   They're going to need to be able to provide the 
bank's routing number and the bank account number   For that dealership. Great. And, again, I would 
remind everyone of the user guide, Publication   5867, in your resources today that should help 
some of you for the registration process. Laura,   Is there a separate registration for used and new 
clean vehicle sales, separate dealer registration?   No, there is not. And we recognized that 
a lot of states have – a lot of states,   I think all of them, and you get dealers 
who would know this better than I would.  

My understanding is that states will, even 
though you have one brick-and-mortar building,   They'll require a separate new vehicle dealer 
license and besides the used vehicle dealer   License. But only one registration is required 
for, you don't register separately and everything   Else. It's based on filing of a tax return. So if 
you have a couple of brick-and-mortar dealerships   And they all file on one tax return, one 1120, 
one partnership or one S corporation return,   That would be one registration for even if 
it's multiple brick-and-mortars file on that,   They combine all their income together and 
everything else for that return. That would   Be one registration. And I would pick the license 
like the dealer license that most represents like,   Hey, this is the one for that particular address 
instead of picking one of the other ones and   That would just maybe help in the process and 
everything else. In addition, because I know I've   Seen, I saw a bunch of the email registrants 
that are the tax accountants and everything   Else that are probably trying to make sure 
that they're assisting their dealers as much   As they can. If I'm filing a consolidated 1120 
corporate return and each one of those fully owned   Subsidiaries, they're filing their own return 
on that consolidated return. Each one of those   Subsidiaries can file their registers separately, 
because they actually file a return where they   Report their own income and expenses, et cetera, 
separately. So that is for, I'd say that for   The benefit of the tax people that are on this 
webinar. Thank you, Laura. And we only have time   For one quick question involving tax compliance. 
So an attendee is asking, why did my dealership   Receive a tax compliance error? I mentioned this a 
little bit earlier, when we had some questions. If   You have a filing requirement for a form and you 
haven't been filing it or if you owe any money on   Any of your accounts and everything else, you're 
not in tax compliance, you're not in compliance,   And those issues need to be resolved before you 
can register for an advance payment, be fully   Registered for the advanced payment program. That 
is required. And Laura, I know we have a set of   FAQs for dealers in registration and they have 
a phone number for those who are getting that   Tax compliance error and let me give that phone 
number if I may. It's 877-968-3413. So if you   Have any questions during the registration and get 
a tax compliance error, you can call 877-968-3413.   Thank you so much, Laura – oh, go ahead. There's 
one other one that I saw a couple of times. And   This is in the FAQs. And I strongly recommend that 
dealers and the tax representatives go to the FAQs   That we have. But one of the questions that a lot 
of dealers have is, we have demo cars or cars that   We let the clients try out and everything else. 
But we never have them titled in our name. When   We sell that car, it might have 100 miles on it or 
200 miles on it, but the vehicle was never titled,   That new vehicle was never titled in the 
dealership's name. Is that considered a new   Vehicle? And the answer is provided in the FAQs. 
And the answer is yes. So I just want to put that   Out there. And so, as far as what is, it's FAQ 
number eight, I just want to put that out there.  

So the dealers who have asked that question, 
which is a commonly asked question, that is,   Like I said, question number eight for eligibility 
of new clean vehicles. And so I strongly recommend   That you go to the FAQs. Thank you, Rich. Thank 
you, Laura. So Roy, let me bring you back briefly   To summarize the key points that you shared with 
the audience today during your presentation.   Thank you, Rich. I do have several key points 
I'd like the audience to remember. Eligible   Buyers may be eligible to claim a tax credit of 
up to $7,500 for purchasing a new clean vehicle   And up to $4,000 for a previously-owned clean 
vehicle. For vehicles placed in service January 1,   2024 or later, dealers must register with 
IRS Energy Credits Online and use the tool   To electronically submit time-of-sale reports. 
Buyers will not be able to claim a clean vehicle   Tax credit if the dealer has not registered and 
does not successfully submit a time-of-sale report   To IRS Energy Credits Online. Other key points, as 
of January 1, 2024, buyers can choose to transfer   A Clean Vehicle Credit to a registered dealer 
in exchange for an equivalent reduction in the   Purchase price of the vehicle. The transfer is 
treated as a down payment reducing the amount   Financed or final cash price, not a reduction of 
the negotiated purchase price. So when a buyer   Transfers a tax credit, registered dealers 
must provide certain disclosures and receive   Attestations from the buyer. And continuing lastly 
with the key points, registered dealers are not   Required to verify a buyer's income. Registered 
dealers are required to inform buyers of income   Requirements since the buyer is responsible for 
repaying the full amount of any transfer credit   When they file their tax return if they exceed the 
income limitations for the tax credit. Audience,   Remember we have a resource document with 
links to useful websites, publications,   As well as e-posters you can download from the 
Materials tab. That's all I have today, Rich.   I want to thank you. Back to you. Well, thank you, 
Roy; and thank you, Laura, for a great webinar.   Now, audience, we here at the IRS are planning 
additional webinars throughout the year. To   Register for any of our upcoming webinars, please 
visit and use the keyword search Webinars,   And then select either Webinars for Tax 
Practitioners or Webinars for Small Businesses.   When appropriate, we will be offering certificates 
and CE credit for upcoming webinars. Now,   Please remember, though, that today's webinar does 
not offer certificates of completion or continuing   Education credits. We also invite you to visit our 
Video Portal, again, that's at,   As you see on the slide. There you can view 
archived versions of our webinars. Continuing   Education credits or certificates of completion, 
however, are not offered if you view an archived   Version of any of our webinars on the IRS Video 
Portal. Again, a big thanks to my colleague,   Roy Chaney, and to our subject matter expert, 
Laura Schmitz, for a great webinar today and   For sharing their expertise. I also want to thank 
you, our attendees today, for attending today's   Webinar. And before you leave, we would appreciate 
if you'd take a few minutes to complete a short  

Evaluation. If you'd like to have more sessions 
like today, please let us know that. If you have   Thoughts on how we can make them better, please 
let us know that as well. If you have any requests   For future webinar topics or pertinent information 
you'd like to see on the IRS Fact Sheet, Tax Tip,   Or Frequently Asked Questions series on, 
then please include these suggestions in the   Comment section of the survey. Click the Survey 
button on the right side of your screen to begin.   If it does not come up, again, make sure you've 
disabled your pop-up blocker. It's been a pleasure   To be here with you, and on behalf of the Internal 
Revenue Service and our speakers, we'd like to   Thank you for today's attending webinar. It's 
very important for the IRS to stay connected,   Not only with the tax professional community, but 
with individual taxpayers, industry associations,   Such as the dealer community, along with 
our federal, state, and local government   Organizations, because you make our job a lot 
easier by sharing the information we provide that   Allows for proper tax reporting. Again, thanks 
again for your time and attendance, and we wish   You much success in your business or practice. 
And you may exit the webinar at this time.

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