IRS turned down my $7500 tax credit!

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Valente

Valente

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I did my taxes for 2018 and my accountant forgot to add my $7500 tax credit for my 2018 Clarity purchase. The taxes I owed were $10,000 so he submitted an amended return and the IRS told me they cannot accept the amended return because I cannot go from "taxable to non taxable..." whatever that means. In other words....Once I submit a tax return that I owe money they cannot reduce the amount of what I owe even with an amended tax return. My response was WTF? Has anyone every heard of such a stupid thing? My accountant suggested a lawyer! I really hate the IRS!!
 
Valente said:
I did my taxes for 2018 and my accountant forgot to add my $7500 tax credit for my 2018 Clarity purchase. The taxes I owed were $10,000 so he submitted an amended return and the IRS told me they cannot accept the amended return because I cannot go from "taxable to non taxable..." whatever that means. In other words....Once I submit a tax return that I owe money they cannot reduce the amount of what I owe even with an amended tax return. My response was WTF? Has anyone every heard of such a stupid thing? My accountant suggested a lawyer! I really hate the IRS!!
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It seems that your forgetful accountant should be footing the bill for the lawyer.
 
That definitely doesn't sound right -- you definitely should be able to submit a return that reduces the tax owed (resulting in a refund if you withheld + paid the original amount). https://www.irs.gov/newsroom/top-10-tax-tips-about-filing-an-amended-tax-return explicitly says "You can also amend your tax return if you forgot to claim a tax credit or deduction."

I think you need to review everything this guy did -- do you have copies of the actual 1040X and 8936 forms he sent, and of the letter the IRS replied with? My guess is he missed something, used a wrong form from the wrong year perhaps, or something else. Might not be a bad idea to have a different tax guy take a look.
 
Just to clarify...
Is the accountant telling you the IRS rejected the amended return?
Or have you gotten something from the IRS directly?
 
I agree you need a new accountant. In the meantime, call the IRS directly and ask what the heck is going on.

Here's an article to help you get past the minefield of the automated answering system, so you can talk to a real live person. I don't see a date on the article, so I hope the info is current!
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Robert_Alabama said:
Checking old posts, it looks like you were the person that bought at the end of 2017 and received the car in 2018.
https://www.insideevsforum.com/comm...-for-my-2018-7500-tax-credit.4917/#post-52095
https://www.insideevsforum.com/comm...-a-good-car-lawyer-in-palm-springs-area.5334/

You may want to make sure that your accountant filled out the form correctly to show the car entered into service in 2018.
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It sounded like you had both issues over the car's purchase and service date (due to the multiple contracts the dealer created), and special tax situations because of your business operations where you didn't owe tax at all (or not enough) in 2017 but did in 2018. It would help to tell us exactly what form was filed and when, and maybe paste the wording of the IRS letter.

If the accountant originally filed Form 8936 with your *2017* taxes (or amended them for 2017) saying the car was put in service in 2017, even if you didn't owe enough to take the full credit, then it wouldn't surprise me if the IRS red-flagged and disallowed re-filing/amending for the same car now as a 2018 in-service date. Or if he filed it as a 2018 form or amendment, but put 12/31/17 as the service date, that would also not result in a refund.

There are other possibilities too that are very different from a more straightforward "forgot/didn't claim the credit, paid+withheld say $10,000 in taxes for 2018, amended to claim the credit" that is as far as I can tell allowed and would result in the IRS sending a check for $7500.
 
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