Will my SE still quality for tax credit

  • Thread starter Thread starter KCMOEV
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KCMOEV said:
So I have a signed purchase order - but no non refundable deposit. What documents are needed when claiming the credit? Guessing that signed purchase order and the bill of sale info from the purchase of the car. So I file for the tax credit under the old rules as I believe I have a valid binding contract. What are the odds the IRS is actually going to audit me and argue whether or not the contract is binding?
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There are no documents beyond the tax return and forms/schedules. When you file with IRS they will probably lookup the VIN first to see if the assembly date was after the date of enactment. Then there will be three groups:
1. LOW RISK - Assembly before Aug 16, 2022 and placed in service Aug 16 - Dec 31, 2022.
2. MODERATE RISK - Assembly after date of enactment and placed in service Aug 16 - Dec 31, 2022
3. HIGH RISK - Assembly after date of enactment but placed in service in 2023+

IRS does not provide any guidance on vehicles delivered after Jan 1, 2023 per Aug 16, 2022 update. Since your MINI passed quality check already, you will probably be alright.
 
KCMOEV said:
So I have a signed purchase order - but no non refundable deposit. What documents are needed when claiming the credit? Guessing that signed purchase order and the bill of sale info from the purchase of the car. So I file for the tax credit under the old rules as I believe I have a valid binding contract. What are the odds the IRS is actually going to audit me and argue whether or not the contract is binding?
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[disclaimer: not a lawyer]
The IRS says they consider significant non-refundable deposits to be indication that a binding contract exists... but deposits (refundable or not) don't appear to be an actual legal requirement for a binding contract. (see comment #110 for supporting info)

You claim the credit by filling out IRS form 8936 with your taxes. There is a manufacturer's certification letter that you should receive at the time of purchase saying the vehicle qualifies for the tax credit, but it's unclear how this will work if you're claiming the credit under the new law's transition rule. I don't know if this certification letter actually gets filed with the IRS at all, or if it's just supporting evidence of eligibility in an audit.

In general, the odds of being audited are fairly low; they typically audit around 0.5% of returns. But there are some red flags that can increase the likelihood of an audit.
 
teslarati97 said:
There are no documents beyond the tax return and forms/schedules. When you file with IRS they will probably lookup the VIN first to see if the assembly date was after the date of enactment. Then there will be three groups:
1. LOW RISK - Assembly before Aug 16, 2022 and placed in service Aug 16 - Dec 31, 2022.
2. MODERATE RISK - Assembly after date of enactment and placed in service Aug 16 - Dec 31, 2022
3. HIGH RISK - Assembly after date of enactment but placed in service in 2023+

IRS does not provide any guidance on vehicles delivered after Jan 1, 2023 per Aug 16, 2022 update. Since your MINI passed quality check already, you will probably be alright.
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I feel this requires a big, flashing "conjecture" disclaimer.
 
For orders placed before August 16th, I wonder if the definition of "binding contract" will depend on the state of residence / purchase.

The definition of binding contract in Texas is relatively straightforward. No "gotchas" like a specific dollar amount.
 
fishbert said:
[disclaimer: not a lawyer]
snip...
You claim the credit by filling out IRS form 8936 with your taxes. There is a manufacturer's certification letter that you should receive at the time of purchase saying the vehicle qualifies for the tax credit, but it's unclear how this will work if you're claiming the credit under the new law's transition rule.
...snip
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I am not sure I receieved such a letter when I purchases my SE. I took delivery in July so I am certain I qualify for the credit. Is this letter required to be included when filing my taxes or is it just something to let me know I qualify?
 
polyphonic said:
For orders placed before August 16th, I wonder if the definition of "binding contract" will depend on the state of residence / purchase.

The definition of binding contract in Texas is relatively straightforward. No "gotchas" like a specific dollar amount.
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The Supremes in the Bosch case said the IRS doesn't have to follow a state decision unless it is from the highest court in that state. Are there cases in your state with "binding contract" the issue?
 
Tommm said:
The Supremes in the Bosch case said...
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CuriousGeorge said:
Now up to 15... random variation, or the result of the IRA?
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Could be.

But, of those 9 (previously) or 15 (currently), not all of them are for sale (not that you said they were). I called around when it was 9, and some 5 or so were already sold. The rest of them are demo models that were being used for test drives and wouldn’t be available for sale until more investors arrived.

I totally support not wanting to sell your last one so that you can do test drives, at least then customers can decide whether to place orders. Contrast this with the Toyota RAV4 Prime…not a single one within driving distance that I can even test drive, so how could I even know whether I like it enough to order one?
 
CuriousGeorge said:
Now up to 15... random variation, or the result of the IRA?
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I'm amazed there would have been any unsold SEs at the end of the day on August 15th as Joe Biden was warming up his IRA-signing pen. Perhaps dealers hoarding new SEs that day were larding on a Dealer Market Adjustment greater than $7,500?
 
gosjsgdi said:
Contrast this with the Toyota RAV4 Prime…not a single one within driving distance that I can even test drive, so how could I even know whether I like it enough to order one?
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I wouldn't be able to figure out the 12V battery drain, 3.3kW charge speed (lower trim), and 32 miles full electric range @ 70MPH (~1.76mi/kWh) during a RAV4 Prime test drive.
 
gosjsgdi said:
Contrast this with the Toyota RAV4 Prime…not a single one within driving distance that I can even test drive, so how could I even know whether I like it enough to order one?
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I wasn't even looking for a test drive, I just wanted to see some build options in person (paint color, seat, wheel, interior trim, etc.), but the MINI dealer I went to a week or to ago only had one MINI on the lot. Never mind the hard-to-find Cooper SE, they had one MINI total... a lonely Countryman. Their showroom was also completely empty. They said it's because orders were all online now, so they didn't keep stock on the lot, but honestly it looked like I was showing up a week late to a going-out-of-business sale.
 
fishbert said:
I wasn't even looking for a test drive, I just wanted to see some build options in person (paint color, seat, wheel, interior trim, etc.), but the MINI dealer I went to a week or to ago only had one MINI on the lot. Never mind the hard-to-find Cooper SE, they had one MINI total... a lonely Countryman. Their showroom was also completely empty. They said it's because orders were all online now, so they didn't keep stock on the lot, but honestly it looked like I was showing up a week late to a going-out-of-business sale.
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Darn, your link didn't take me to the certainly appropriate image you picked out.

Speaking of going out of business sales, my dealer was going out of business the day after they delivered my SE on 8/24/20 (we're about to have a birthday party), but they still had quite a few MINI Coopers on the lot. One of those was a Moonwalk Grey base MINI Cooper. I tried to bribe them to swap hoods with my Moonwalk Grey SE before all those MINIs were moved to other dealers. I claimed that whomever bought that base MINI would be getting an enhanced car--and the scooped hood would be even newer than the one I took. Unfortunately, they said "No deal."

I spent some of my anticipated EV tax credit to order a new base MINI hood, but it was painted in primer, not Moonwalk Grey. My body shop said that I might have been surprised to discover that the Moonwalk Grey hood from the MINI on the lot didn't exactly match the Moonwalk Grey on my SE because factory colors vary slightly from week to week.
 
insightman said:
Tell your friend there will be a 27.5% import tariff on the Chinese MINI Cooper SE vs. the 10% tax on British-made cars. The Signature might be gone, but the current Signature Plus is a bargain--even without including rear-passenger carpets.
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And there is a US/UK free trade agreement under negotiation as well. If MINI/BMW is effectively "blocked" from the US EV market going forward, maybe they will rethink their Oxford production strategy?
 
Query: What is the definition of a binding contract for this purpose?

When "you" get the VIN, is the dealer is bound/obligated to sell the car to "you?" Since you are then able to give that VIN to your lender to secure financing, etc. can you make the argument that you have a binding contract? Do you think the argument that you ordered an EV under the old system, the factory built it for you, and the dealer is bound to sell it to you is enough to get you either over the hurdle completely, or over it enough that if the argument is rejected, you wont get hit with penalties?
 
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