Model X Buy Back

[cwerdna]

The fault is with the way the tax rebate credit was written.

Edit: That was a lease so there was never the taken back part. I can't seem to find how Nissan handles the tax rebate on a car they buy back.

Can you stop using the words rebate? It is simply a Federal tax credit.

I find that surprising as Nissan has bought a lot of Leafs back due to battery degradation issues.

I, as well. Can you point me to where "a lot" more of these are? I've been active on mynissanleaf.com since mid-2011 and been following Leaf for even longer (besides driving one since July 2013) and haven't heard "a lot" of Leafs being bought back for any reason.

Yes, I'm well aware of battery degradation, esp. in hot climates and the TonyWilliams's range test in Phoenix (https://web.archive.org/web/20130115102522/http://www.mynissanleaf.com/viewtopic.php?p=228326; I loaned some equipment to someone who flew to Phoenix to assist w/the test), the Phoenix degradation fiasco, etc.

 

[NewTMSMan]

Well found this "precedent" on Reddit:

Tesla is buying back my X (as a lemon) but deducting Fed tax credit. • r/teslamotors

Now I realize this is not a legal precedent, but it's enough for me to substantiate my position that Tesla has no right to claim back the potential future tax credit (I have not filed yet for 2017).

In addition the NJ Lemon Law references the Purchase Price of the Car, not the Fair Market Value. The calculation they provide intends to reduce the purchase price by a reasonable allowance for the vehicle use (which in my case is near 0) and then only includes additional costs that can be added (which does not include vehicle enhancements such as XPel and paint coating).

Also we are not considering buying a replacement Tesla at this point. The issues we have had with the Model X may be unique, but I also have a new Model S (bought only 1 month earlier than the Model X) and it also has had numerous issues including having to have the air suspension replaced already. My Model S is only a few days away from qualifying as a Lemon in NJ as well, so at this point my, given my experience with Tesla, I will not be buying another.

 

[GOPJEW]

Yes, xpel and paint coating are not good investments, they are unrecoverable money, bad investment.

LOL - a $100,000 car is NOT a good investment - the $4k for Xpel to protect your vehicle is irrelevant to the “investment” in the vehicle and it is a good ROI if it can protect you from multiple paint chips, door dings, keying, etc.

 

[Canuck]

Tesla has no right to claim back the potential future tax credit (I have not filed yet for 2017).

The calculation they provide intends to reduce the purchase price by a reasonable allowance for the vehicle use (which in my case is near 0)

So you won't have the car, and will have barely driven it ("near 0") so in reality it was a purchase and return and you think you are entitled to the tax credit at law? You might want to take a look at tax rules in general when it comes to loopholes, rebates, deductions, credits, etc. and how they are applied at law, especially in relation to tax avoidance vs. tax evasion -- the same principles are at play when claiming a credit.

it's enough for me to substantiate my position that Tesla has no right to claim back the potential future tax credit

People can always easily justify to themselves that it's proper to evade taxes. But you need to take a step back and take a look at this objectively, since that's what Uncle Sam will do because it's not ever about substantiating it to you. It's about substantiating it to the federal government and not ending up having to pay legal and accounting fees to defend yourself and still potentially lose, and also expose yourself to potential criminal liability. I would recommend you speak to a tax lawyer or accountant before filing the form, since you will be completing it without the vehicle in your driveway and having barely driven it, if at all. You're getting free money for nothing -- you're not accelerating EV transport. In my view, it's not at all worth the money you are trying to get. Plus, if Tesla pays you back what you paid, and you never really drove the car, then you claim the tax credit, I can't see any tax judge saying that's proper. Judges are instructed to interpret the law with the intent of the legislation. We know the intent is to accelerate the advent of electric vehicles. It's not to allow you to recover money from the government for an EV you bought, barely drove, then returned. It's sure seems pretty black and white to me.

But if you are going to claim the credit, you really shouldn't have told us that here. That alone could trigger an audit and you shouldn't be too hard to find. Now if you tell us you won't be claiming it, I doubt anyone will believe it and you could still be watched to see if you claim it.

 

[verygreen]

Tesla has no right to claim back the potential future tax credit (I have not filed yet for 2017).

But if you are going to claim the credit, you really shouldn't have told us that here

I think you are reading too much into that first statement.
I would read it as if one has not filed yet, then assuming they would claim the credit is not correct, esp. since legality of such claim is in question.

The whole "have not driven" speculation is even more in the woods. Some people just don't drive that much (includes myself), or the car was so broken it has barely left the service center until you can apply for the lemon law (also happened to me).

 

[fbitz777]

I had a focus EV replaced under buy back and the tax credit was never discussed ..only the fair use of mileage of the car at the time (11k miles or about $3000)...I took a second credit on the replacement car.

On another way to look at it; you crash and total your car with low miles on it. Would you consider fair for the insurance company to deduct 7500 in payments to you? Do you think that claiming 7500 again on your replacement is not kosher with the IRS (it is!)

 

[RVD98072]

Sounds like my opinion will be unpopular but if buying back I think it's expected that Tesla will take off the $7500 federal tax credit as well as not pay for anything aftermarket done to the car (paint protection, opticoat, etc.).

They are basically going to pay you the value of the car. If you buy a car for $100k, then you probably won't be able to turn around and sell it for $100k. At best it would be $92.5k since the tax credit will be factored in.

 

[Canuck]

On another way to look at it; you crash and total your car with low miles on it. Would you consider fair for the insurance company to deduct 7500 in payments to you? Do you think that claiming 7500 again on your replacement is not kosher with the IRS (it is!)

If you can't see the difference, the fed's tax lawyers will easily explain it to the court: In one case, the form is being filled out when the vehicle has been returned, a refund is given, and the individual is profiting on the tax credit. That's very different than having totaled the vehicle and making lease payments based on the tax credit. You can bet the Fed's lawyer will say this to the tax court judge:

"Your Honor, if you allow John Doe to claim the tax credit in this case then your decision will be cited as precedent for people to legally buy a vehicle, return it -- whether under Lemon Laws or otherwise --- like Uncle Jack is a car dealer and he let us take it back -- then claim the credit. All perfectly legal based on your decision, should you decide this case in that manner. John Doe's lawyer is making an absurd argument by way of his analogy since no one is going to buy a car and total it just to try to claim the tax credit when still making lease payments. But we can see a floodgate of people buying and returning vehicles then claiming the tax credit with the approval of this court, should the case be decided this way. If you distinguish it based on intent, then this court will be flooded with cases to determine people's intent. That was not the purpose of this tax credit -- which is to accelerate the advent of EVs. John Doe is not doing that at all yet he wants the government's money set aside for that very purpose. He should be admonished heavily by this court."

Analogies in court don't take you very far without the foundation for the argument being the same and you built a different foundation out of very different facts. The Judge will also know his decision would be immediately appealed if he found for the buyer, and judges do not like to be overturned on appeal. Plus, I think any reasonable person can easily see the distinction. It surprises me that you cannot.

 

[verygreen]

If you can't see the difference, the fed's tax lawyers will easily explain it to the court: In one case, the form is being filled out when the vehicle has been returned, a refund is given, and the individual is profiting on the tax credit. That's very different than having totaled the vehicle and making lease payments based on the tax credit. You can bet the Fed's lawyer will say this to the tax court judge:

"Your Honor, if you allow John Doe to claim the tax credit in this case then your decision will be cited as precedent for people to legally buy a vehicle, return it -- whether under Lemon Laws or otherwise --- like Uncle Jack is a car dealer and he let us take it back -- then claim the credit. All perfectly legal based on your decision, should you decide this case in that manner. John Doe's lawyer is making an absurd argument by way of his analogy since no one is going to buy a car and total it just to try to claim the tax credit when still making lease payments. But we can see a floodgate of people buying and returning vehicles then claiming the tax credit with the approval of this court, should the case be decided this way. If you distinguish it based on intent, then this court will be flooded with cases to determine people's intent. That was not the purpose of this tax credit -- which is to accelerate the advent of EVs. John Doe is not doing that at all yet he wants the government's money set aside for that very purpose. He should be admonished heavily by this court."

Analogies in court don't take you very far without the foundation for the argument being the same and you built a different foundation out of very different facts. The Judge will also know his decision would be immediately appealed if he found for the buyer, and judges do not like to be overturned on appeal. Plus, I think any reasonable person can easily see the distinction. It surprises me that you cannot.

Here's a twist.
Tesla just told me "you are eligible for the tax credit, we'll provide you with a written guarantee that we'll refund you the $7500 + whatever penalty interest they might assess should IRS decide you are not eligible for the credit afterwards".

 

[NewTMSMan]

Here's a twist.
Tesla just told me "you are eligible for the tax credit, we'll provide you with a written guarantee that we'll refund you the $7500 + whatever penalty interest they might assess should IRS decide you are not eligible for the credit afterwards".

Post a pic of the written document when you get it, be shocked if they actually followed through on that verbal promise.

 

[verygreen]

Post a pic of the written document when you get it, be shocked if they actually followed through on that verbal promise.

Assuming they won't attach any sort of NDA to it, I will.
It's not like I am going to sign a release until all of my conditions are meat anyway.

 

[Panchratan]

Curious about opinions regarding a potential buy back offer from Tesla.

First, they are reducing their proposed offer by the $7500 Tax Credit. My opinion is that the tax credit is not guaranteed and they should not be unduly enriched by me passing through the tax credit that is related to the sale of a vehicle that they are buying back. Their argument is that the tax credit is built in to the depreciation of the vehicle and every Model X sold is worth $7500 less than what everyone paid immediately. Thoughts?

Second I have spent unrecoverable money on registration fees and on Xpel and paint coating, totalling approximately $4,000, which Tesla has not offered to compensate for. Thoughts?

Interested also in any experience anyone can share on this process.

Curious: Are you wanting to selling your car back to Tesla or has Tesla made a buy back offer to you out of the blue?

 

[verygreen]

Curious: Are you wanting to selling your car back to Tesla or has Tesla made a buy back offer to you out of the blue?

Not out of the blue: Tesla Service/Quality control is still as bad as ever I guess

 

[NewTMSMan]

To be clear I do not want to sell my car back to Tesla, nor do I want to proceed with a Lemon Law claim. My wife likes her Model X a lot when it is working properly. My main issue is all the time this takes up going back and forth to the service center, not having my car that I paid for and the risk (where some issues were safety related like most recent alerts about Emergency Braking being disabled and Steering Assist Reduced). Tesla decided to offer to buy the car back due to the experience I am having (their words, not mine).

At this point I picked up my Model X from the SC yesterday. They cannot confirm that the issue is fixed, but they could not get the alerts to come back after trying and have gone over all the wiring in the car (which they believe was the cause). I will likely give the car one last try while I decide what to do.

Thanks for everyone's input, it helped me think through the best approach for me with this situation.

 

[Lbkmxp100d]

@NewTMSMan, please let us know if your problem is resolved after some time behind the wheel. Sounds like Tesla has tried to fix your issue and if it were indeed a wiring harness issue that was the problem than I suspect your issue may be resolved. Here’s to praying you get to enjoy a big free X!

 

[verygreen]

Post a pic of the written document when you get it, be shocked if they actually followed through on that verbal promise.

Ok, so there was no printed document. We settled on Service manager writing me the below email with the Tesla letterhead stuff added because changing the release papers is too complicated for such a one-off thing.

This email is to confirm our conversation we had about your Tax credit. You are eligible for the tax credit for your vehicle because you were the registered first owner of the vehicle. If for some reason you are audited and found that you were not eligible Tesla will reimburse you for the amount of the tax credit and any fees incurred because of it.

 

[vandacca]

If you can't see the difference, the fed's tax lawyers will easily explain it to the court: In one case, the form is being filled out when the vehicle has been returned, a refund is given, and the individual is profiting on the tax credit. That's very different than having totaled the vehicle and making lease payments based on the tax credit. You can bet the Fed's lawyer will say this to the tax court judge:

"Your Honor, if you allow John Doe to claim the tax credit in this case then your decision will be cited as precedent for people to legally buy a vehicle, return it -- whether under Lemon Laws or otherwise --- like Uncle Jack is a car dealer and he let us take it back -- then claim the credit. All perfectly legal based on your decision, should you decide this case in that manner. John Doe's lawyer is making an absurd argument by way of his analogy since no one is going to buy a car and total it just to try to claim the tax credit when still making lease payments. But we can see a floodgate of people buying and returning vehicles then claiming the tax credit with the approval of this court, should the case be decided this way. If you distinguish it based on intent, then this court will be flooded with cases to determine people's intent. That was not the purpose of this tax credit -- which is to accelerate the advent of EVs. John Doe is not doing that at all yet he wants the government's money set aside for that very purpose. He should be admonished heavily by this court."

Analogies in court don't take you very far without the foundation for the argument being the same and you built a different foundation out of very different facts. The Judge will also know his decision would be immediately appealed if he found for the buyer, and judges do not like to be overturned on appeal. Plus, I think any reasonable person can easily see the distinction. It surprises me that you cannot.

I'm not a lawyer nor am I interested in tax law, but I just wanted to add that not all cars are lemons. It's not like people can go out and deliberately buy a lemon to take advantage of the tax credit. A number of conditions (outside the owner's control) has to come together for this situation to occur, so I don't see this being a wide-spread issue.

 

[Canuck]

It's not like people can go out and deliberately buy a lemon to take advantage of the tax credit.

If I bought an EV, then barely drove it, if at all, and returned it for a full refund, and then when it came time to do my taxes I claimed a $7.5k EV credit when it's not even in my driveway, it sure wouldn't sit well with me to the point where it's just not worth the potential exposure. But to each their own. It seems to me that relying on the argument that you will tell the judge that you never set out to buy a lemon so it's legitimate to claim the credit, when you didn't even own the car when you claimed it, will fall of deaf ears. And that's aside from the fact that this car was not declared a lemon.

 

[vandacca]

If I bought an EV, then barely drove it, if at all, and returned it for a full refund, and then when it came time to do my taxes I claimed a $7.5k EV credit when it's not even in my driveway, it sure wouldn't sit well with me to the point where it's just not worth the potential exposure. But to each their own. It seems to me that relying on the argument that you will tell the judge that you never set out to buy a lemon so it's legitimate to claim the credit, when you didn't even own the car when you claimed it, will fall of deaf ears. And that's aside from the fact that this car was not declared a lemon.

There are 3 cases here:
(a) Returning car via lemon law
(b) Tesla buying back car as "a lemon" or buy-back guarantee
(c) selling the car privately

With regards to (a) or (b), again, it's out of the owner's control. For (a) either Tesla or an arbitrator will need to determine if the car is a lemon. For (b) it's all up to Tesla. For either (a) or (b), I can't imagine it being that easy of a thing to do, so I'm not concerned at all about this being abused.

With regards to (c), then yes I can see your point and would totally agree.

 

[Canuck]

There are 3 cases here:
(a) Returning car via lemon law
(b) Tesla buying back car as "a lemon" or buy-back guarantee
(c) selling the car privately
With regards to (a) or (b), again, it's out of the owner's control. For (a) either Tesla or an arbitrator will need to determine if the car is a lemon. For (b) it's all up to Tesla. For either (a) or (b), I can't imagine it being that easy of a thing to do, so I'm not concerned at all about this being abused.
With regards to (c), then yes I can see your point and would totally agree.

Good luck arguing to the federal court that "it's out of the owner's control." He just had to submit that completed credit form for $7.5k, right?

Here's my arguments in reply to your position above, which I would like to think is what the fed's lawyers would say in reply to the Court:

Let's not be confused by scenarios when we are only dealing with the facts of this case which are: John Doe bought the EV car, had problems/didn't like it, barely drove it, if at all, returned it for a full refund, so car is not even in his driveway when the form is being completed. John Doe then completes and claims the federal EV credit form claiming $7.5k by his own free will -- it was completely within his control whether or not to claim that credit.

Is that tax evasion? I don't know but I sure wouldn't want to test the waters and find out.