Cathy Posted April 14, 2012 Report Share Posted April 14, 2012 Have any of you been questioned about the $3,000 alternative fuel tax credit on Louisiana returns? I've heard it more than once that some preparers are taking this credit if their clients purchased a Flex Fuel vehicle. These are the vehicles being commonly sold today that will run on either gas or the ethanol blend. I had researched the law (RS 47:6035) and saw where the "qualifying property, etc..." I'm writing from memory...anyway...cannot be equipment that can run on gas or diesel. I called the Dept. of Rev. today after hearing more and more about people actually getting the $3,000 tax refund to see if I was the only one who didn't know about this credit....me and all of the dealerships who would be screaming from the top of their lungs if the credit was legit! To my amazement, I was told by a customer service rep that yes, these flex fuel vehicles do qualify. She then referred me to a bulletin about the old law that RS 47:6035 repealed in 2009 as I think the original law could have been misconstrued to mean flex fuel vehicles. I emailed the DOR legal department asking for guidance on the situation. I spoke briefly with a receptionist at the legal Dept,'s office and she informed me that the legal Dept. Is taking a look at the situation. I expect to hear from one of their attorneys next week as they have been very helpful in the past when other issues needed addressing. I'll post back next week what I hear but in the interim, have any of you been approached about this "Alternative Fuel Tax Credit"? Cathy Quote Link to comment Share on other sites More sharing options...
Lynn EA USTCP in Louisiana Posted April 14, 2012 Report Share Posted April 14, 2012 HI Cathy, I took that credit for one of my clients just this week. It's one of the refundable credits, #71F. Of course they want us to fax to them documentation for that - my client has provided me with a copy of the purchase papers, and something that states the vehicle is an EchoFuel vehicle. My client was told about this credit by the vehicle salesman. Lynn Jacobs, EA Civil Law Notary Public Kenner, LA Quote Link to comment Share on other sites More sharing options...
Cathy Posted April 14, 2012 Author Report Share Posted April 14, 2012 Thanks, Lynn. This is going to be very interesting if it's allowed to stand. Most vehicles on the market today will qualify for the credit. I read the history of the 2009 bill and the financial impact study and it's evident that the financial impact study wasn't banking on so many vehicles qualifying. Bobby's going to have major problems on his hands. It's going to make the retirement issue seem so minor! Cathy Quote Link to comment Share on other sites More sharing options...
Cathy Posted April 16, 2012 Author Report Share Posted April 16, 2012 Lynn, Just had time to look up EchoFuel vehicles (aka Eco Fuel) and it appears they are vehicles that run on natural gas. Those type of vehicles are appropriate for the credit....it's the Flex Fuel vehicles like the truck I own (E85) which can run on an 85% Ethanol and 15% gasoline blend, OR, it can run on gasoline. The original law about the Alternative Fuel Credit was repealed and replaced by the legislature in 2009. The new bill is effective for vehicles purchased on or after January 1, 2009. The Customer Service Department at the DOR is telling people when they call to hurry up and file a 2008 amended LA return by 5-15-12 to get their $3,000 refund for these Flex Fuel vehicles....like the one I own. There are 2 problems I see with the 2008 "credick" which will be refunded to them (as they are saying) is that: 1. The law covering vehicles purchased in 2008 was repealed and replaced by the new law in 2009 but is for vehicles purchased on or after 1-1-09, and: 2. The original law that covered 2008 vehicles wasn't a $3,000 refundable credit, it was 20% of 10% (or .02%) of the cost of the vehicle, with the lesser of the .02% or $1,500. My vehicle was right at $30,000. Had I bought it in 2008, the non-refundable (but available for carryover for 3 years) credit would have been $600.00....not $3,000. One would have had to have purchased a $150,000 vehicle to get a $3,000 credit. Besides the #1 and #2....from what I've read in the Revised Statutes, the Flex Fuel vehicles don't qualify for the refundable credit....but as I'm not an attorney, I'll wait to get the word from the Legal Department at DOR before I file for the $3,000 refund so my clients won't have to pay the refunds back. Things are hopping at the capital with the legislature in session but hopefully, I'll hear something in the near future. And again.....your client's credit appears to be legit! Cathy Quote Link to comment Share on other sites More sharing options...
Cathy Posted April 21, 2012 Author Report Share Posted April 21, 2012 UPDATE: Louisiana DOR is demanding repayment of Flex Fuel refunds.....heard this from several people....a few have received letters from what I was told...not officially from the horses mouth yet.....but heard from a few taxpayers who are scorching hot....to say the least! Cathy Quote Link to comment Share on other sites More sharing options...
Mac Posted April 26, 2012 Report Share Posted April 26, 2012 Hi, Cathy! I'm happy to see someone looking into this instead of taking it at face value that these credits are really legit. I called the LDR this morning, and I was told by the person that answered the phone that the Flex Fuel vehciles qualify. That really doesn't mean a whole lot to me, mainly because, like you, to me the law appears to exclude Flex Fuel vehicles. When the state starts receiving the ton of amended returns this is going to lead to, someone is going to take notice. Have you seen any of the letters you referred to above that are requesting repayment? Please keep us posted in regards to any additional information you receive. I have sent some e-mails to other state affiliated individuals. Hopefully we can get some confidence regarding how to handle this. Quote Link to comment Share on other sites More sharing options...
Cathy Posted April 27, 2012 Author Report Share Posted April 27, 2012 Hi, Cathy! I'm happy to see someone looking into this instead of taking it at face value that these credits are really legit. I called the LDR this morning, and I was told by the person that answered the phone that the Flex Fuel vehciles qualify. That really doesn't mean a whole lot to me, mainly because, like you, to me the law appears to exclude Flex Fuel vehicles. When the state starts receiving the ton of amended returns this is going to lead to, someone is going to take notice. Have you seen any of the letters you referred to above that are requesting repayment? Please keep us posted in regards to any additional information you receive. I have sent some e-mails to other state affiliated individuals. Hopefully we can get some confidence regarding how to handle this. Hi Mac, Also happy to see another with my concerns! I called the DOR today just to see what they would say and was told "an auditor" would call me back after I asked her if the E/85 Flex Fuel vehicles qualified for the Alternative Fuel Tax Credit. Yesterday, I received the following response from the Policy Division (legal department) of the DOR: Ms. Dauthier, You are correct. The flex fuel vehicle is not eligible for the alternative fuel tax credit at this time, however, it is currently under advisement. The result will be posted on our website. Subscribers to our notification service will be notified through that service. Please feel free to contact me through this medium at any time. All inquiries are answered in the order in which they are received. This reply to your inquiry constitutes "informal advice" from the Louisiana Department of Revenue, as contemplated by Louisiana Administrative Code 61:III.101(D)(3), which provides that informal advice does not have the force and effect of law and is not binding on the Department, the public, or the individual seeking advice. Informal advice will have no effect on an audit. Confidentiality Statement The information contained in this electronic message from the Taxpayer Services Division of the Louisiana Department of Revenue is privileged and confidential. If you are not the intended recipient, the disclosure, copying, distribution, or use of any of the transmitted information, or any other action based on the contents of this information, is strictly prohibited. If you have received this transmission in error, please immediately notify the transmitter by e-mail or telephone at 225-219-7462. The Louisiana Department of Revenue is interested in improving customer service. Please help us evaluate the service you recently received by forwarding comments to [email protected]. Cheryl Bankhead Revenue Tax Specialist Contact Center Sure will be glad to get a straight answer from someone.....notice the "however" in her second sentence! There are several interesting threads on a group of LSU forums known as "Tigerdroppings" (under the "Money Talk" forum specificaly). My contributions to the forum are under "frb1951". There are several threads there....you may have to go back a couple of pages to find them but you'll be able to spot them by their titles. Another refund was received by one of the posters on 4-24-12. One of the threads has a link to an H & R block sign advertising the $3,000 Flex Fuel credit....no wonder! Please let me know if you hear anything else also.....2008 returns must be amended by 5-15-12 so the Department needs to make a final decision quickly. I think I'll drop an e-mail to John Kenneday's offce...maybe they can light a fire under the DOR. UPDATE: Contacted Kenneday's office..they referred me to the Governor's office. I contacted the Commissioner's office of the Division of Administration and informed them of the situation and asked that they try to get a resolution asap. We'll see what happens.....I've about had enough of dealing with inefficiencies in our State Agencies. Take care, Cathy Quote Link to comment Share on other sites More sharing options...
Add13 Posted April 28, 2012 Report Share Posted April 28, 2012 I do not understand how they can say that a flex fuel vehicle does not qualify under this law the way it is written. The way it reads to me is that the incremental cost of equipment that is related to the capability of using an alternative fuel qualifies for the credit, but the cost that is related to using gasoline does not qualify. It does not seem to exclude the vehicle simply because it also uses gasoline. Under the safe harbor, it appears that even if the cost of the qualifying equipment was $1, the maximum credit could be claimed. The law seems to be poorly written and could lead to a major uproar from the citizens since it seems that many have claimed this apparently legitimate credit. Quote Link to comment Share on other sites More sharing options...
Lynn EA USTCP in Louisiana Posted April 30, 2012 Report Share Posted April 30, 2012 http://www.rev.state.la.us/forms/lawspolicies/Emergency%20Rule%20-%20Alternative%20Fuel%20Credit.pdf Recently added Emergency Rule regarding the Alternative Fuel Credits, an 8-page document. Lynn Quote Link to comment Share on other sites More sharing options...
Cathy Posted April 30, 2012 Author Report Share Posted April 30, 2012 http://www.rev.state...el%20Credit.pdf Recently added Emergency Rule regarding the Alternative Fuel Credits, an 8-page document. Lynn Just saw that, Lynn.....clear as mud! :wall: Quote Link to comment Share on other sites More sharing options...
Battue Posted May 1, 2012 Report Share Posted May 1, 2012 Ok guys, I received my refund in march. I have a tax due notice for mine due in 10 days. Do I get to keep my refund? What is the states new procedure? In the new document , my vehicle is listed, Does this mean it is allowed? Also how are all taxpayers going to be treated? Quote Link to comment Share on other sites More sharing options...
Cathy Posted May 1, 2012 Author Report Share Posted May 1, 2012 Battue, If I were you, I'd call the DOR first thing this morning when they open and ask to speak to someone in collections unless you have their direct number written on your demand letter. Better yet, if no one can give you a straight answer, ask for the email address to the legal department. Then email them to confirm for you that the "Emergency Ruling" issued on 4-30-12 means that you don't have to repay your refund. Not that it will do any good, but put "URGENT" in the subject matter. Good luck! Quote Link to comment Share on other sites More sharing options...
Cathy Posted May 2, 2012 Author Report Share Posted May 2, 2012 UPDATE: Just got off the phone with the Income Audit Division of the DOR. There will be no more credits issued for E85 Flex Fuel vehicles. All of those who have received the credit for "Flex Fuel" vehicles will have to repay it. I questioned whether the taxpayers who have to repay the credits can repay in installments without penalty and interest as the DOR's Customer Service Department was advising taxpayers who called to file amended returns claiming the credit for the Flex Fuel vehicles. I was then told that this type of payment arrangement was already being discussed....nothing final yet, but they do realize the taxpayers who have filed for and received the credit did so as directed by the Customer Service Department. Cathy Quote Link to comment Share on other sites More sharing options...
Lynn EA USTCP in Louisiana Posted May 2, 2012 Report Share Posted May 2, 2012 Kathy, what was their rationale for this change in position? Did he say if this position also extends to hybrids, gasoline electric vehicles such as the Toyota Prius? Thanks,, Lynn Quote Link to comment Share on other sites More sharing options...
Battue Posted May 2, 2012 Report Share Posted May 2, 2012 Lynn, here in lies the problem. The way the emergency declaration is written, no vehicle sold at retail in the world would qualify. Because all use gasoline propulsion as backup fuel in case of alternative fuel failure, so you're right, even the mighty Toyota Prius has been ruled out by the state with that wording. They don't want anyone claiming this credit.... Quote Link to comment Share on other sites More sharing options...
Cathy Posted May 2, 2012 Author Report Share Posted May 2, 2012 LATEST UPDATE AS OF 6:00 PM 5/2/12....YOU'RE NOT GOING TO BELIEVE THIS BUT IT'S THE TRUTH, AND NO, I AM NOT CERTIFIABLE CRAZY...ALMOST BUT NOT YET! Ok folks, It is now official as official can get. I just received a phone call from the head of the legal department with the Louisiana Department of Revenue. E85 Flex Fuel vehicles definitely qualify for the credit. File those amended returns! The legal department was in between a rock and a hard place as the intent of the original bill was not what was passed by the legislature, however, I have personally seen on other occasions where legislators purposely change a law by adding or deleting a word which in turn changes the original intent of the law...in other words, the actual law that was voted on by the legislature ended up not being what the original author had intended. The legal department from what I was told normally takes 90 days to formulate a Declaration of Emergency, however, in this case where there were so many calls and questions, the rush to issue the Declaration "probably" included misinformation such as the second sentence in Part I, Paragraph B. I for one have been rather harsh in regard to the department's actions/inactions on this particular credit. In retrospect, and especially since I have witnessed "slip it in at the last minute and no one will notice" mentality of some of the legislators, no wonder the situation has been a fiasco and a nightmare for tax practitioners. In this instance, I fault the legislators rather than the department. It's time to stop the games and get to work. It remains to be seen how much this will cost the State of Louisiana, but hopefully it will be a good lesson to be learned for the legislators. I now have to get busy sending out letters to my clients. Ya'll have a wonderful time enjoying the $3,000 refunds. Maybe we can all meet up at Disney World, courtesy of the Louisiana Legislature to celebrate! Quote Link to comment Share on other sites More sharing options...
Cathy Posted May 3, 2012 Author Report Share Posted May 3, 2012 Lynn, here in lies the problem. The way the emergency declaration is written, no vehicle sold at retail in the world would qualify. Because all use gasoline propulsion as backup fuel in case of alternative fuel failure, so you're right, even the mighty Toyota Prius has been ruled out by the state with that wording. They don't want anyone claiming this credit.... Battue, Congratulations! You can now tell the Collections Department where to put their "tax due notice". Take care, Cathy Kathy, what was their rationale for this change in position? Did he say if this position also extends to hybrids, gasoline electric vehicles such as the Toyota Prius? Thanks,, Lynn Lynn, To see if your vehicle in question is eligible for the credit google search the following: Model Year (fill in the blank): Alternative Fuel Vehicles and Advanced Technology Vehicles After you search as above, open the file from the Department of Energy. If the vehicle is included on their list for the particular year in question, then the vehicle qualifies for the credit. I can be reached at my Office and Home (225) 627-5140 or my cell at (225) 718-1308 unless I have passed away due to the stress of this mess! :spaz: Quote Link to comment Share on other sites More sharing options...
Cathy Posted May 3, 2012 Author Report Share Posted May 3, 2012 Just wanted to add the following copy of my email correspondence I received yesterday from the Policy Services Division after I clicked on the link to ask questions about the Declaration of Emergency as stated in their email informing subscribers about the Declaration. The webmaster forwarded my letter to the Policy Services Division which is the legal department with DOR. Their response to my question is first and then my email to them is below their response. I woke up this morning again with a sick feeling about this situation. I'll drop off the info with my local representative before I file any amended returns and hopefully get a legal opinion from the legislative division. I honestly still don't agree with the DOR's opinion and would hate to see my clients spend the refund and have to pay it back eventually. I just want to double check...so my conscious will be clear when I file the amendments. Dear Cathy, The statute does not preclude or prohibit flex fuel vehicles from qualifying for the credit. Further, the rule creates a rebuttable presumption that if a flex fuel vehicle is listed on the website of the Department of Energy, then the vehicle is one that meets the standards set forth in the statute and thereby qualifies it for the credit. Thanks, Policy Services Division -----Original Message----- From: Website Technical Questions Sent: Wednesday, May 02, 2012 7:41 AM To: Louisiana Tax Policy Subject: FW: Meaning of Emergency Ruling -----Original Message----- From: Cathy [mailto:[email protected]] Sent: Wednesday, May 02, 2012 12:24 AM To: Website Technical Questions Subject: Meaning of Emergency Ruling As.a tax practitioner of 39 years, I am even more confused with the Emergency Ruling in regard to the Alternative Fuel Tax Credit. There are many more practitioners in Louisiana like me. In Part I, paragraph B, the following appears: "The credit is also available when a taxpayer purchases a vehicle that its original and only use is to operate on an alternative fuel." I understand this sentence to mean that Flex Fuel Vehicles don't qualify for the credit. However, the following phrase is used when describing the list of Alternative Fuel Vehicles by the Department of Energy"........"rebuttable presumption". I, along with many others need a straight forward reply to our question. Do E85 Flex Fuel Vehicles qualify for the credit? Thanks! Cathy Dauthier Quote Link to comment Share on other sites More sharing options...
Cathy Posted May 3, 2012 Author Report Share Posted May 3, 2012 OK guys, we have a new bulletin: http://www.rev.state.la.us/forms/lawspolicies/RIB%2012-025.pdf I've emailed the department again as the effective date of purchase of these vehicles as printed in the bulletin doesn't agree with the actual act that was passed by the legislature. The act stated vehicles purchased on or after January 1, 2009.....the bulletin has July 9, 2009....big difference for some taxpayers. I'll post what I find out. Quote Link to comment Share on other sites More sharing options...
Cathy Posted May 3, 2012 Author Report Share Posted May 3, 2012 I've just made copies of many items relating to the credit and am on my way to drop them off at my local Representative's office. I'm just really concerned now about the intrepretation of the law itself after I discovered the purchase date of the vehicles was misinterpreted. Possibly we can get another legal opinion from the legislative legal department in regard to the E85 vehicles. I just hate the thought of my clients receiving the $3,000 refunds and having to pay them back eventually. I'm just bull headed enough to fight to the bitter end if I am convinced that this credit is legit and then the state asks for it back. I'm just not 100% convinced as of yet. Unfortunately, I'm a capricorn and am a stickler for details. Why wasn't I born in the spring time? My life would be so much easier! Take care everyone and again, I will post what I find out. Cathy Quote Link to comment Share on other sites More sharing options...
Battue Posted May 3, 2012 Report Share Posted May 3, 2012 Cathy, I feel helpless. i called the enforcement division (the number in the revenue bulletin). they said they did not have permission to credit my balance due. they were pretty adamant about it, they also did not know about the bulletin. i am getting worried about my balance due letter. the bulletin states that anybody who has received the credit is entitled to keep their refund. that doesn't seem to be the case. i don't know what to do...i can't get anyone to call me back.....they are telling office audit has to re-process my amendment... that's not what the revenue bulletin says.... Quote Link to comment Share on other sites More sharing options...
Cathy Posted May 4, 2012 Author Report Share Posted May 4, 2012 The purchase date of the vehicles will be changed. See the reply to my inquiry below. Dear Cathy, Thank you for your inquiry below. The RIB and the statute was reviewed and it was found that the July 9, 2009 date in the RIB was incorrect. In short, the credit can be taken on a qualified flex fuel vehicle that was purchased by the taxpayer on and after January 1, 2009. A new RIB which corrects the date has been prepared and sent to LDR’s IT division to be posted to our website. Hopefully, the new RIB will be posted no later than tomorrow by noon. Thank you so much for your patience and the information below. Thanks, Policy Services Division Quote Link to comment Share on other sites More sharing options...
Cathy Posted May 4, 2012 Author Report Share Posted May 4, 2012 Cathy, I feel helpless. i called the enforcement division (the number in the revenue bulletin). they said they did not have permission to credit my balance due. they were pretty adamant about it, they also did not know about the bulletin. i am getting worried about my balance due letter. the bulletin states that anybody who has received the credit is entitled to keep their refund. that doesn't seem to be the case. i don't know what to do...i can't get anyone to call me back.....they are telling office audit has to re-process my amendment... that's not what the revenue bulletin says.... Battue, If you have an easy access to a printer, print out the bulletin, then highlight the area that pertains to your situation and attach a copy of the bulletin to your collection letter, then write the following on the front of the collection letter: In accordance with the attached copy of Revenue Information Bulletin No. 12-205, please credit my account accordingly. I was told by your office on May 3, 2012, that this could not be done. Please discuss this matter with the Secretary of the Department of Revenue, Cynthia Bridges, who signed this bulletin. I expect a prompt reply from your office indicating a -0- balance. Thank you. (and then sign your name) Send the above Certified Mail, Return Receipt Requested. Ok...I got that off my chest......or you could give it a couple of days for word to get to the Collection Department and call again next week. It was late yesterday afternoon (5:30 pm...after hours) that the head attorney with the Policy Division called me and in our conversation she told me that she hoped to have a bulletin issued with questions and answers in a couple of weeks. Evidently, she continued to work last night after we got off the phone and got the bulletin written up, signed and posted before everyone at the DOR was informed about it. Whichever way you handle it, let me know if you can't get it resolved, and I'll be glad to let the Policy Division head attorney know what's going on! She messed up when she gave me her name! :spaz: Quote Link to comment Share on other sites More sharing options...
Lynn EA USTCP in Louisiana Posted May 4, 2012 Report Share Posted May 4, 2012 http://www.rev.state.la.us/forms/lawspolicies/RIB%2012-026.pdf Dates corrected to January 1, 2009 Quote Link to comment Share on other sites More sharing options...
Battue Posted May 4, 2012 Report Share Posted May 4, 2012 Cathy, got everything taken care of. was told i had a zero balance. everything should be o.k. I guess the language in the bulletin finally made the rounds.... Quote Link to comment Share on other sites More sharing options...
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