Topic I — Frequently asked questions about registering a dealer/seller for seller reporting and Clean Vehicle Tax Credit transfers

 

Updated FAQs were released to the public in Fact Sheet 2023-29PDF, Dec. 26, 2023.

The Inflation Reduction Act of 2022 (IRA) makes several changes to the tax credit provided in § 30D of the Internal Revenue Code (Code) for qualified plug-in electric drive motor vehicles, including adding fuel cell vehicles to the § 30D tax credit. The IRA also added a new credit for previously owned clean vehicles under § 25E of the Code.

These FAQs provide detail on how the IRA revises the credit available under § 30D (New Clean Vehicle Credit) for individuals and businesses, and information on the credit available under § 25E (Previously Owned Clean Vehicle Credit) for individuals, and the new credit for qualified commercial clean vehicles under § 45W of the Code.

Q1. May a buyer claim the New or Previously Owned Clean Vehicle Tax Credit if the dealer or seller of the vehicle is not registered with the IRS? (added Oct. 6, 2023)

A1. No. Starting for vehicles placed in service Jan. 1, 2024 or later, buyers will only be able to claim credits if the seller has registered with the IRS and successfully submits a seller report through IRS Energy Credits Online. This submission is done at the time of sale through IRS Energy Credits Online, and the seller must provide a copy of the successfully submitted seller report to the buyer.

Q2. Who must submit seller reports through IRS Energy Credits Online and who is eligible to participate in the advance payment program? (added Oct. 6, 2023)

A2. All dealers and sellers must submit seller reports through IRS Energy Credits Online for vehicles placed in service beginning Jan. 1, 2024. Registered dealers that provide required information through IRS Energy Credits Online and are in tax compliance may become eligible to participate in the advance payment program once their registration information is verified by the IRS.

Q3. Who should complete the initial registration on behalf of the dealer or seller? (added Oct. 6, 2023)

A3. An individual representative of the dealer or seller who is currently authorized to legally bind the dealer or seller in these matters can complete the initial registration through IRS Energy Credits Online. Starting December 2023, dealers and sellers will be able to authorize more than one employee to make representations on their behalf through IRS Energy Credits Online.

Q4. What information is required for dealer registration? (added Oct. 6, 2023)

A4. Dealers should be prepared to create an account using general Business information (including business EIN, address, phone number and email) and authorize an individual to access dealer registration. Dealers registering for advance payments will have to provide additional information, detailed on IRS Energy Credits Online.

Q5. Does a dealer need to be state licensed to register? (added Oct. 6, 2023)

A5. In order to submit seller reports for previously owned clean vehicles or register to receive advance payments, a dealer must be licensed by a state, the District of Columbia, an Indian tribal government or any Alaska Native Corporation to engage in the sale of vehicles. Non-licensed dealers (sellers) must still be registered through IRS Energy Credits Online to submit seller reports.

Q6. What is the difference between registering for seller reporting and the advance payment program? (added Oct. 6, 2023)

A6. A registration to submit seller reports will allow dealers and sellers the ability to submit seller reports through IRS Energy Credits Online when selling eligible vehicles. This does not include the ability to receive advance payments. A registration for the advance payment program grants the dealer the ability to submit seller reports when selling a vehicle and submit a request for an advance payment to the IRS. Only licensed dealers may register to receive advance payments.

Q7. Is a dealer required to register for both seller reporting and the advance payment program? (added Oct. 6, 2023)

A6. No. A dealer or seller can be registered to submit seller reports without registering to receive advance payments. However, only licensed dealers can be registered to receive advance payments.

Q8. Once a dealer is registered, when can they start to receiving advance payments? (added Oct. 6, 2023)

A8. Buyers may transfer their credit to the dealer, thereby allowing dealers to initiate an advance payment request, beginning Jan. 1, 2024.

Q9. Can a dealer come back into IRS Clean Energy Online and complete its advance payment registration at another time? (added Oct. 6, 2023)

A9. Yes. A dealer who is registered to submit seller reports will have the ability to continue their registration to receive advance payments at any time.

Q10. Is dealer registration separate for used and new vehicle sales? (added Oct. 6, 2023)

A10. No. Registered dealers may submit seller reports for both new and previously owned clean vehicle sales. Please note, only licensed dealers may submit seller reports for previously owned clean vehicles.

Q11. How will the dealer be informed of a registration status update? (added Oct. 6, 2023)

A11. Registration status updates will be displayed in IRS Energy Credits Online.

Q12. If registration fails initially, will the dealer have another opportunity to register? (added Oct. 6, 2023)

A12. Yes. A dealer may attempt registration again.

Q13. Why did my dealership receive a tax compliance error? (added Oct. 6, 2023)

A13. A tax compliance error is a result of an overdue tax return or unpaid federal tax debt. If you receive this error, call 877-968-3413 for more information.

Q14. What does my dealership need to do to be in tax compliance? What if my dealership is not in tax compliance? How can my dealership become compliant to participate in the advance payment program? (added Oct. 6, 2023)

A14. Dealer tax compliance means that all required federal information and tax returns of the dealer have been filed, including for federal income and employment tax purposes, and all federal tax, penalties and interest due of the dealer as of the time of sale have been paid. A dealer that has entered into an installment agreement with the IRS for which a dealer is current on its obligations is treated as being in dealer tax compliance.

If the dealer is not in dealer tax compliance for any of the taxable periods during the last five taxable years, then the dealer may complete its initial registration with the IRS, but the dealer will not be eligible for the advance payment program until the compliance issue is resolved. The IRS will notify the dealer in writing that the dealer is not in dealer tax compliance, and the dealer will have the opportunity to address any failure through regular procedures. If the failure is corrected, the IRS will complete the dealer's registration for the advance payment program, and, provided all other requirements are met, the dealer will then be allowed to participate in the advance payment program.

Q15. Do qualified manufacturers who are direct sellers need to register? (added Oct. 6, 2023)

A15. Qualified manufacturers who are direct sellers of vehicles must complete dealer registration in order to submit seller reports and receive an advance payment when a credit is transferred.

Q16. How do I edit information within my dealer registration? (added Oct. 6, 2023)

A16. Contact information, such as phone number or email address, may be edited at any time by clicking into the dealer registration page. To edit any other information, a user must re-register with new information.

Q17. Does my dealer registration expire? (added Oct. 6, 2023)

A17. A dealer registration expires after 10 years.

Q18. If my dealership runs into difficulty at any point in the registration process, who should I contact? (added Oct. 6, 2023)

A18. Please contact irs.clean.vehicles.dealer.info@irs.gov with questions.