UPDATED Action Item: The IRS has announced Dealers are now able to submit previously unsubmitted required information through the IRS ECO Tool beginning December 10, 2024. Taxpayers are recommended to act now to avoid IRS processing delays.
- On December 10, 2024, the Energy Credits Online (ECO) Tool opened to accept time-of-sale reports for any 2024 transaction of a new or previously owned clean vehicle not previously submitted
- The IRS announcement is welcome news to dealers who have missed timely submittals
- The time-of-sale reports should be submitted immediately to allow the IRS time to process prior to the end of the year
Background
Beginning on January 1, 2024, dealers and sellers of new or used vehicles eligible for the Clean Vehicle Tax Credit under Internal Revenue Code sections 30D and 25E are generally required to submit time-of-sale reports to the IRS within 3 calendar days from the date of sale. However, the IRS does recommend submitting the information before the sale closes. Submissions are done through the IRS ECO Tool to obtain an instant confirmation of a vehicle’s eligibility for the credit based on the vehicle’s identification number (VIN).
Temporary Relief Granted
Dealers have been granted relief by the IRS to file required time-of-sale reports that were not submitted within the 3-day timeframe. The IRS previously announced that on or around November 25, 2024, dealers would be able to submit such previously unfiled time-of-sale reports; however, the IRS ECO Tool was not updated to handle these reports until December 10, 2024, and dealers and sellers are now encouraged to submit these unsubmitted reports as soon as possible. Going forward, dealers who cannot submit a time-of-sale report within the 3-day window, should submit as soon as possible and provide an explanation as to the reasons a timely report could not be submitted. Such submissions are subject to an IRS review.
Additionally, eligible vehicles that were never put into service for which a time-of-sale report was filed or if such report was filed for a leased vehicle (which are ineligible,) dealers should submit cancellation requests as soon as possible. In cases where cancellation requests are filed for eligible vehicles never placed into service, a new time-of-sale report submission can be made after the IRS reviews and accepts the cancellation request.
In instances where a buyer elects to transfer the credit to the seller (e.g., as a down payment on the purchase) and the time-of-sale report is submitted beyond the 3-day window, the IRS may request additional information before processing the credit to determine if the buyer made the election on or before the sale.
If you have any questions, professionals in our Dealerships practice are available to assist you.