WASHINGTON, D.C. — U.S. Senator John Barrasso (R-WY), chairman of the Senate Committee on Environment and Public Works (EPW), sent a letter to Senate Majority Leader Mitch McConnell (R-KY), to express his deep concerns with any legislative effort to extend or expand the electric vehicle (EV) tax credit. Barrasso urges McConnell to oppose any such efforts.
In the letter, Barrasso highlights a report from the Treasury Inspector General for Tax Administration (TIGTA) that found up to $81.7 million dollars in erroneous tax credits were claimed for ineligible vehicles, from tax years 2013 to 2017. Barrasso writes, “The EV tax credit is no longer necessary. Despite this, efforts are underway to expand this temporary tax credit. Now, it turns out that the credit is being exploited and costing taxpayers tens of millions of dollars more.”
Read the full TIGTA report here.
Read the full letter here and below.
Dear Leader McConnell:
I write to you to reiterate my deep concerns with any legislative effort that seeks to extend or expand the electric vehicle (EV) tax credit.
The EV tax credit has served its purpose. Over one million EVs are currently on America’s roads. By 2030, forecasts expect over 3.5 million EVs to be sold annually. The EV tax credit is no longer necessary. Despite this, efforts are underway to expand this temporary tax credit. Now, it turns out that the credit is being exploited and costing taxpayers tens of millions of dollars more.
On September 30, 2019, the Treasury Inspector General for Tax Administration (TIGTA) issued a report titled “Millions of Dollars in Potentially Erroneous Qualified Plug-In Electric Drive Motor Vehicles Credits Continue to be Claimed Using Ineligible Vehicles.” The report found that from tax years 2013 to 2017, up to $81.7 million in federal tax credits were claimed for ineligible vehicles.
The report states, “[T]he IRS is allowing individuals to inappropriately reduce their tax liabilities, resulting in the loss of millions in revenue.” It continues, “If controls were in place or the returns had been reviewed, potentially, claims totaling $81.7 million may have been disallowed.” I have attached the entire TIGTA report to this letter for your review.
This lost tax revenue adds to the already staggering cost of the EV tax credit. Yet, supporters of the credit want taxpayers to continue footing the bill for EV purchases, both real and ineligible, for years to come. According to a recent study from Ernst & Young, legislation currently pending before Congress to expand or eliminate the current cap on the EV tax credit would result in taxpayers paying anywhere from $15.7 billion to $46.4 billion over the next ten years.
I urge you again to oppose any effort to expand or extend the EV purchase tax credit and prevent its inclusion in any legislation before the Senate. Thank you for your attention to this important issue.
John Barrasso, M.D.
United States Senator
On Feb. 6, 2019, Barrasso introduced the Fairness for Every Driver Act. This legislation will save billions in taxpayer funds by ending the federal electric vehicle tax credits and strengthen the Highway Trust Fund by ensuring that alternative fuel vehicle drivers pay into it.