Again, Colorado trying to avoid paying EV credit. This demand is beyond reasonable.

[MileHighMotoring]

I filed my taxes in February, and they say it'll be processed within 2-6 weeks. 8 weeks later, they sent a demand letter for "more documentation." Specifically:

Innovative Motor Vehicle Credit - A copy of the vehicle history report (such as one available from CarFax) for used vehicle.
​

They need me to buy a CarFax for a used EV I bought? WTF?! So ridiculous. And if I did this today, they'll delay another 3 months and then ask for something else.

I went this route when I bought my Nissan Leaf a few years ago, and ended up getting a credit half of what I calculated I was due. That year they asked for all sorts of stuff about my purchase (which I had already attached to my original return) and 6 months later I got screwed.

This year they're also asking for my W-2 and 1099s again, which, shocking, I had already included with my return.


Is this a calculated effort to not pay out the credit? I know lots of others have experienced problems over the last years too.

 

[2krazykats]

Interesting... I fled in Feb as well. Got my Federal Tax credit w/o problems but still awaiting my CO refund. I bought a new Model S but have not gotten any communication from them about it. I'll post back when something shows up.

Why would they need a CarFax report. That I don't understand. The title and bill of sale should be sufficient.

And can you explain what you mean by "Again" in your title? Has this happened to you before or someone else?

 

[Galve2000]

is the credit available for used car sales?

 

[MorrisonHiker]

is the credit available for used car sales?

Yes

 

[MorrisonHiker]

Interesting... I fled in Feb as well. Got my Federal Tax credit w/o problems but still awaiting my CO refund. I bought a new Model S but have not gotten any communication from them about it. I'll post back when something shows up.

You might want to contact them to see if they have already processed your return. Once again this year they are sending out checks for a lot of refunds (even if you chose direct deposit and have used the same bank account for 10+ years). In their effort to battle fraud, they often send out paper checks. Go figure.

 

[MrClown]

Yes

Yes if it was used in another state, right? I think they only give the credit once per vehicle.

 

[MorrisonHiker]

Yes if it was used in another state, right? I think they only give the credit once per vehicle.

Yes. If the car was previously registered in Colorado, then the tax credit isn't available. If it comes from another state, then it is available. There's a used car dealer in Boulder who imports Volts and Leafs from out of state just to take advantage of this.

 

[Sm4llz]

I'm ignorant to this so please be kind. Would Colorado need a carfax to prove that the car hadn't previously been registered in the state before? Surely they should be linked to the DMV using the VIN right?

I filed a few weeks ago and already received my federal. Still waiting on State from CO. I submitted the needed documentation via their online site vs mailing it in. I filed using Turbo Tax.

 

[MileHighMotoring]

I'm ignorant to this so please be kind. Would Colorado need a carfax to prove that the car hadn't previously been registered in the state before? Surely they should be linked to the DMV using the VIN right?

You'd think. What the @#$ is the VIN used for in my tax return if not to verify it's eligibility in the tax credit? I could just make up a VIN and it would have no bearing apparently.

This CarFax requirement is total cr@p IMO. I have to spend $20-30 to show them what they should already know. They're just trying to get people to say SCREW IT I GIVE UP.

 

[Rocky_H]

I'm not even from your state, but my justice streak is getting riled up to the point where I am thinking you need to start keeping track of your billable hours wasting your time with this and add it to the requested damages in the complaint lawsuit you file against the Colorado tax commission.

 

[SageBrush]

Colorado's "Income 67" is a pdf that explains the credit and rules.
Check the bottom of page 6 for the verbiage regarding the vehicle history report requirement for a used car.

 

[bonnie]

Colorado tax board seems to be having difficulties ... I was sent a very severe dunning letter a few months ago from Colorado, telling me I owed around $38k in taxes for 2011 & needed to pay up within 30 days blah blah blah.

I sent them a note pointing out I hadn't lived, owned property, or worked in Colorado since 2007, that I had filed and paid 2011 state taxes in California while working for a California company and living at a California address.

Last week I received a letter saying that 'after additional review, we have voided the assessment for 2011'. I think that is also supposed to double as apology for incompetence.

 

[Beavis]

Most sellers offer free Carfax reports prior to sale to prove the car wasn't in an accident. Tesla should offer that. Otherwise, spending $20 to get a $6,000 refundable tax credit is a pretty good deal.

 

[mspohr]

Colorado tax board seems to be having difficulties ... I was sent a very severe dunning letter a few months ago from Colorado, telling me I owed around $38k in taxes for 2011 & needed to pay up within 30 days blah blah blah.

I sent them a note pointing out I hadn't lived, owned property, or worked in Colorado since 2007, that I had filed and paid 2011 state taxes in California while working for a California company and living at a California address.

Last week I received a letter saying that 'after additional review, we have voided the assessment for 2011'. I think that is also supposed to double as apology for incompetence.

I had a similar problem with Colorado tax people. I live in California and own an office building (in California) where I rent part of it to a branch office of a company whose HQ is in Colorado. CO got the bright idea that I owed tax in CO for my rental income on my CA office building. Many rounds (and about a year) of sending them CA and Federal tax returns and additional information they finally got a clue and backed down... only to start again with the next year's return and I had to go through the entire circus again. I haven't heard from them in a year or two but I think it's only a matter of time until they start harassing me again.

 

[SageBrush]

Colorado tax board seems to be having difficulties ... I was sent a very severe dunning letter a few months ago from Colorado, telling me I owed around $38k in taxes for 2011 & needed to pay up within 30 days blah blah blah.

I sent them a note pointing out I hadn't lived, owned property, or worked in Colorado since 2007, that I had filed and paid 2011 state taxes in California while working for a California company and living at a California address.

The tax authorities can certainly take a "guilty until proven otherwise" approach, but I think I have you beaten when it comes to just plain dumb tax agents:

I received a ~ 300,000 tax bill (that will wake you up in the morning) for an unreported stock sale a couple of years ago. I explained to the IRS agent that it was a 'short sale,' without a paired buy yet. No luck. I then appealed. No luck. Only after I sued in Federal tax court did I finally get a speedy resolution from the regional prosecutor who complained that the IRS was wasting his time. LOL

As a recent state transplant though, if occurred to me that the state I left is not notified of the change; they simply stop getting tax returns. There must be a simpler way for a state to know that a resident has moved than to charge tax evasion. New driver's license perhaps, verified from one MVD to the other ?

 

[Beavis]

CO CPA here. First, happy Tax Day to me! I'm about to pour myself a single malt. Second, I can beat that. One of my clients told an agent that he was being unreasonable with an information request and was barking up the wrong tree on an issue. When the agent persisted, my client ignored the request (and my advice) for a couple of months. The agent got pissed off and delivered a Notice of Proposed Assessment for Substantial Underpayment of Tax. On Christmas Eve. For $1 billion.

Actually, CO has gotten pretty bad since the hiring freeze during the recession. They never hired back up and the smart people, the ones practitioners rely upon to be the adults in the room when an agent is off the reservation, are the first to leave because they can actually get another job. What remains are the stupid, lazy and stubborn ones (the worst combination of character traits in an agent). In addition, DORA's systems are old. It's just a bad situation and nobody is in a mood to increase their budget in order to fix it.

 

[SageBrush]

when an agent is off the reservation,

What does that mean ?

 

[cpa]

I am not defending any state's collection efforts. But there are a lot of bad actors out there (as I am sure Beavis can attest.) There a lot of decent folks too who are ignorant of income tax rules concerning nexus, residency and domicile. Computers are a godsend for these agencies as they can match up pret-near any public record with income tax filings. Own real property in Colorado? Where is your tax return? Received a 1099 or W-2 from a Colorado business (even though no Colorado withholding or mailing address)? Where is your tax return?

It is not likely that matching a driver license from another state would eliminate this problem. People work across state lines a lot.

The only way is for the state to send nastygrams that threaten in order to receive proof that a taxpayer is not subject to their state's income tax.

 

[SageBrush]

It is not likely that matching a driver license from another state would eliminate this problem. People work across state lines a lot.

I suggest not letting perfect get in the way of much improved.

As a recent transplant to Colorado, I was at the local MVD to take out a new state driver license. Unfortunately my NM license did not meet requirements, so I had to pay and wait for a copy of my birth certificate or apply for a new passport. In each of the latter cases, my NM driver license was sufficient identification.

I thought about mentioning this silliness to the MVD clerk but that would only annoy her. And honestly, my only peeve is that no one exists (or will come out of hiding) to take the message and improve the system.

 

[Barry]

CO Dept of Revenue is definitely on the top of the clueless list.

A couple of years ago, after filing my return, they sent me a letter requesting copies of the 4 checks I sent to them, and they cashed, for quarterly estimated payments. In my cover letter back to them, with the copies of the checks, I asked them how could they possibly not have record of receiving and cashing the checks. Of course, this question was not answered when I got their "your documentation is satisfactory" letter.

My $6K credit was applied to my recent filing for 2015. I cut my quarterly esitmateds sufficiently for 2015, so my refund is ~$200, which I applied to the first 2016 quarterly estimated just due. So they can screw around as long as they want, as far as I'm concerned, as it will have no effect on me.