It's not an electric car just because it has a battery… Image: © GM Corp.

Imagine that: nearly 13,000 Americans tried to scam the government in the first half of 2010 by claiming they purchased an electric car. The false claims amounted to about 20% of credits granted, and totaled some $33 million. Twenty nine of the fake claims were filed by prisoners (why not roll the dice when you’ve got nothing to lose), while other fraudulent claims were actually filed by IRS employees. Currently unemployed IRS employees, I assume. Some taxpayers claimed the deduction for the purchase of a Hummer H3, a Dodge Durango or a Cadillac Escalade, and one form actually tried to claim the credit for purchasing a golf cart.

The $7,500 tax credit was intended to be used towards the purchase of a plug-in electric drive motor vehicle, so even conventional parallel hybrids didn’t qualify for the credit. The same amount was also given for converting a fuel-burning car to a plug-in, which seems to be a common conversion among Toyota Prius owners. The IRS is now working to recover the credits wrongly issued, and says that efforts to reduce incorrect claims helped them protect over $3 million in revenue so far. On the other hand, they could have simply hired a consultant who knows about cars to review manuals and software programs; I’d only charge $75 per hour, which would work out to be a whole lot less than the $33 million the agency paid by mistake.

Source: Inside Line