Cathy Posted May 5, 2012 Author Report Share Posted May 5, 2012 Battue, Congratulations! :) Quote Link to comment Share on other sites More sharing options...
Cathy Posted May 5, 2012 Author Report Share Posted May 5, 2012 http://www.rev.state...IB%2012-026.pdf Dates corrected to January 1, 2009 Lynn, The original interpretation of the date vehicles can be purchased to qualify for the credit really has me concerned about the interpretation that the Flex Fuel vhicles even qualify for the credit. Thursday, I dropped off copies of all correspondence, laws, bulletins, etc.. to my local representative's office. I asked his office to get another legal opinion from the legislature's legal department. I have to be 1000% sure these refunds aren't going to be recalled before I file amended returns for my clients. The feasibility study for Act 469 estimated a total of 302 vehicles would receive the credit over a 5 year period which is aproximately 60 vehicles per year. I have at least 60 amended returns to file myself if the E85 vehicles qualify. I will have to make a scene at the DOR if my clients are told later to repay the credit, and I just want to avoid a scene if at all possible. In my younger days I would have gone for it before another legal confirmation. :wacko: Quote Link to comment Share on other sites More sharing options...
Mac Posted May 8, 2012 Report Share Posted May 8, 2012 Thanks for your continued diligence, Cathy! Quote Link to comment Share on other sites More sharing options...
Tax2012 Posted May 9, 2012 Report Share Posted May 9, 2012 Glad I found this thread. Cathy, great work. If you do file the amended returns it will just be very important for each of your clients to understand the possibility of some day having to pay it back. As long as you explain it and have they have total understanding of what might happen you should allow yourself to sleep well at night. You will have done all you can. Quote Link to comment Share on other sites More sharing options...
Cathy Posted May 11, 2012 Author Report Share Posted May 11, 2012 Thanks Mac and Tax2012, Just up to update you a bit, I talked with my rep's office yesterday and he wants to research the situation and wait until next session to close the loophole, if there is one. He's not a first-termer but still young to the office. To get the monkey off my back, I then contacted the Actuary with the Legislative Fiscal Office...the one who actually did the feasibility study and told her she now has the monkey. I also contacted the Governor's office after researching how many Flex Fuel vehicles were sold in the U.S. in 2009 and estimated rather than costing Louisiana a total of $907,000 as was in the study for a 5 year period, it's very possible that the State could be looking at approximately $62,000,000 alone for 2009, and more each year after that as more and more of these vehicles are being sold each year. I think I got their attention. As the Secretary of the Department of Revenue is a political position appointed by the Governor, I feel the Governor's office can quickly find out if it is a misinterpretaton and interact with the Department quicker and better, of course, than I can. My clients who have contacted me are all in the same mindset and are being very patient. So far, none of my clients want to file for the refund if they may have to pay it back at a later date. If the Governor's office advises me that DOR's interpretation is correct and the refunds are legit, then I'll file the amended returns. None of them want to go through what other taxpayers have gone through already with receiving the refunds then getting stern letters from the Collection Department telling them they must repay the refunds with interest. Even though those letters have been recalled, I won't be able to sleep well at night until I know for sure my clients will be able to keep their refunds....neither do my clients want that scenario either. Both offices have advised me they will get back with me as soon as possible. I'll post what I find out. You're right, Tax2012, I have done all I can do. It's time for those two other offices to take over from here. Last night I slept like a baby....finally! Again, thanks to both of you! Your posts meant a lot to me! Take care, Cathy Quote Link to comment Share on other sites More sharing options...
Gail in Virginia Posted May 11, 2012 Report Share Posted May 11, 2012 Cathy, I don't have any Louisiana clients as a ruler, and these posts don't really affect any of my clients but I just have to say that I am very impressed with the effort that you are putting into protecting your clients' interests. You are really going the extra mile on this issue IMO, and I think that you represent the very best of what a tax professional should be! Quote Link to comment Share on other sites More sharing options...
Cathy Posted May 11, 2012 Author Report Share Posted May 11, 2012 Cathy, I don't have any Louisiana clients as a ruler, and these posts don't really affect any of my clients but I just have to say that I am very impressed with the effort that you are putting into protecting your clients' interests. You are really going the extra mile on this issue IMO, and I think that you represent the very best of what a tax professional should be! Thanks so much! Your check is in the mail! :D Quote Link to comment Share on other sites More sharing options...
Battue Posted May 11, 2012 Report Share Posted May 11, 2012 I am confused. I thought the state has issued their final decision. They spent the entire spring looking at this. they have had every opportunity to disallow the vehicles. The law is the law. These vehicles qualify. The state has spoken, and they issued an emergency declaration as well as a very thorough revenue bulletin. E85's are alternative fuel vehicles. I don't understand why anyone would continue to pursue this issue after the state has communicated their decision. This can only hurt the taxpayers in the long run. So, you are trying to convince the state that their decision is incorrect? I've spent the last 4 months trying to convince them that the law is the law and there is no way that flex fuel E85's can be disallowed. We all know the state can change their interpretation of tax law at any time, up to 7 years or some period. We all knew this going in. I seriously doubt that 20,666 refund claims will be filed for 2009 alone, this is the amount to get you to your $62,000,000 number. Most people have never heard of this credit. Quote Link to comment Share on other sites More sharing options...
Cathy Posted May 12, 2012 Author Report Share Posted May 12, 2012 I am confused. I thought the state has issued their final decision. They spent the entire spring looking at this. they have had every opportunity to disallow the vehicles. The law is the law. These vehicles qualify. The state has spoken, and they issued an emergency declaration as well as a very thorough revenue bulletin. E85's are alternative fuel vehicles. I don't understand why anyone would continue to pursue this issue after the state has communicated their decision. This can only hurt the taxpayers in the long run. So, you are trying to convince the state that their decision is incorrect? I've spent the last 4 months trying to convince them that the law is the law and there is no way that flex fuel E85's can be disallowed. We all know the state can change their interpretation of tax law at any time, up to 7 years or some period. We all knew this going in. I seriously doubt that 20,666 refund claims will be filed for 2009 alone, this is the amount to get you to your $62,000,000 number. Most people have never heard of this credit. Hi Battue, The main difference in the two of us is that you are an individual taxpayer and I am a paid tax practitioner and as such I must prepare tax returns for my clients while following Federal and Louisiana tax codes. This site is mainly tax practitioners such as I am, however, you are very welcome to comment as you wish. As a tax practitioner, there are many, many rules and regulations we must follow and preparing accurate returns is a must. The Department of Revenue issued a Declaration of Emergency in regard to the Alternative Fuel Vehicles. The Declaration of Emergency was not very clear as one could interpret it to mean Flex Fuel vehicles qualify for the credit and also that these vehicles do not qualify for the credit. In fact, after reading it several times, I felt the Department had not really taken an official stand on the matter. I then spoke with the head of the Policy Division. The next day, she issued the Bulletins and the first two questions listed in the bulletin were pretty much taken word for word from me. The problem I see (as a paid tax pratictitioner) with the bulletins is the following note found at the bottom of each page of each bulletin: A Revenue Information Bulletin (RIB) is issued under the authority of LAC 61:III.101(D). A RIB is an informal statement of information issued for the public and employees that is general in nature. A RIB does not have the force and effect of law and is not binding on the public or the Department. So, you see Battue, as a tax practitioner, I have the copy of R.S. 47:6035 (the law) that defines "Qualified clean-burning motor vehicle fuel property" as follows: (3) "Qualified clean-burning motor vehicle fuel property" shall mean equipment necessary for a motor vehicle to operate on an alternative fuel and shallnot include equipment necessary for operation of a motor vehicle on gasoline or diesel. In other words, when a definition appears in a law, much attention needs to be paid to it. With the word "and" in the above, you take out the first part of the definition and read as "Qualified clean-burning motor vehicle fuel property shall not include equipment necessary for operation of a motor vehicle on gasoline or diesel. Also, Battue, as a tax practitioner, I have a Declaration of Emergency that is not clear as to the interpretation of the law itself, and I also have two bulletins from the Department of Revenue. I might add that the bulletins are the ONLY documents issued from the DOR that directly stated the Flex Fuel vehicles qualify, however, that "A RIB does not have the force and effect of law and is not binding on the public or the Department" appears on the bottom of each page. Therefore, I do not consider the Bulletins as the proof I need in order to be able to file the many amended returns for my clients. I saw the agony you went through when you were told you had to repay the credit and I don't want my clients to have to suffer that same agony. As to my $62,000,000 estimation, there are over 8,000,000 of these vehicles on the road today with over 1,000,000 sold in 2009 alone....so yes, my calculations while are not based on rocket science, however, the fact that "most people never heard of this credit" I feel sure will change in the very near future. Dealerships for one have a way of spreading the word as so does the internet, barber shops, people cashing the debit cards at the banks, etc... Trust me, Battue, I'm not trying to "hurt" you or any other taxpayer. I'm just a tax professional doing my job for my clients. It isn't the best or easiest job by any means, but "somebody's got to do it"! I have a letter ready to send out to my clients IF and WHEN I get confirmation that the credit is legit after considering everything I've discovered in my research. I was shocked when I opened my gas tank flap on my Equinox I bought a couple of weeks ago and found the yellow E85 gas cap. I'd like the credit also....but I want to know that I won't have to pay it back if I get it. Take care, Cathy Quote Link to comment Share on other sites More sharing options...
Erick Posted May 15, 2012 Report Share Posted May 15, 2012 It seems to me, however, that if you apply the actual law in context, and if the taxpayer elects instead to take the percentage (or 10%) of the total overall purchase cost, that is by definition, excluding that portion (90%) of the vehicle which operates on gasoline or diesel. Correct? Quote Link to comment Share on other sites More sharing options...
Mac Posted May 29, 2012 Report Share Posted May 29, 2012 Hi, Cathy! Have you heard anything from any of the agencies you last contacted? Thanks! Quote Link to comment Share on other sites More sharing options...
Cathy Posted June 6, 2012 Author Report Share Posted June 6, 2012 Hi, Cathy! Have you heard anything from any of the agencies you last contacted? Thanks! Mac, I forwarded my concerns to the Governor's office and they sent me a letter stating they were forwarding them to the Department of Revenue. I told them in my correcpondence that I already had direct contact with the Policy Division in regard to what I and other tax professionals feel is a misinterpretation of the statute. The head of the Policy Division called me this morning and told me she's sending me a letter that states the refunds will not be recalled and the ruling is in effect until the legislature corrects the law. I'll send you a copy of it if you drop me an email at [email protected]. Once I get the official letter and it states what was told to me this morning, I'll start filing amended returns for my clients. She said that the only other way that could change the refunds will be if a case is filed in court and the court rules that the DOR erred in it's interpretation of the law. Even if that happens, she stated that it would not effect those refunds already issued. Cathy P.S. I don't see anyone bringing the case before the courts in this situation. Might as well enjoy the refunds as our taxes will eventually increase because of the misinterpretation! :wall: Quote Link to comment Share on other sites More sharing options...
Erick Posted June 7, 2012 Report Share Posted June 7, 2012 Hello Cathy- How are you calculating the credit? Is it 20% of 10% of the purchase cost? Or just 10% of the purchase cost? I've heard both of these methods discussed. Quote Link to comment Share on other sites More sharing options...
Cathy Posted June 12, 2012 Author Report Share Posted June 12, 2012 Hello Cathy- How are you calculating the credit? Is it 20% of 10% of the purchase cost? Or just 10% of the purchase cost? I've heard both of these methods discussed. Erick, The new law is 10% of the purchase price (not including sales taxes or rebates) with a maximum credit of $3,000. The 20% of 10% (or 2%) was part of the old law that was repealed and replaced in 2009 by the new law (R.S. 47:6025). I still can't understand the use of the "20% of 10%" in the old law rather than 2%. I still haven't received the promissed letter from the DOR although I did get another letter from the Governor's office Saturday that kind of sounded like their office would be looking at the situation closer. Still no letter today from DOR....my mail runs late. As the DOR's Policy Division told me I would get my letter my the end of the week, I'll try to find out what's going on. Until I get something in writing, I'm holding off on my amended returns. Take care, Cathy P.S. To clarify, if an E85 vehicle cost $30,000 and the customer received a rebate of $5,000, thus only paying $25,000 for the vehicle, the credit would be $2,500. An amount received from a trade-in does not reduce the tax credit. Quote Link to comment Share on other sites More sharing options...
Battue Posted June 15, 2012 Report Share Posted June 15, 2012 .the news star newspaper in monroe, louisiana is reporting tonight that the governor has stopped the tax credit for alternative fuels. i was really looking forward to enjoying my refund. now, will i have to pay mine back? Quote Link to comment Share on other sites More sharing options...
Cathy Posted June 17, 2012 Author Report Share Posted June 17, 2012 .the news star newspaper in monroe, louisiana is reporting tonight that the governor has stopped the tax credit for alternative fuels. i was really looking forward to enjoying my refund. now, will i have to pay mine back? That remains to be seen. On one hand, the State can't give away public funds and this is basically what the DOR did as it stands today. On the other hand, who knows? Wish I could be of more help...just glad my clients aren't faced with your situation, however, it sounds like you didn't spend your refund. I would imagine silence will be your and the others best bet.....just keep the refund in an interest bearing account and sit back and wait. Cathy Quote Link to comment Share on other sites More sharing options...
Battue Posted June 18, 2012 Report Share Posted June 18, 2012 http://www.thenewsstar.com/article/20120615/BREAKING_NEWS01/120615020 Quote Link to comment Share on other sites More sharing options...
Battue Posted June 19, 2012 Report Share Posted June 19, 2012 The above link is to an article on the news star where a spokesman for the governor is quoted in the above article about the fate of the credits already received by taxpayers. Cathy, please read the article. Is there anyway we can get this answer in black and white and documented? What forums are they communicating this in? Who can get LDR or the governor's office to confirm this? Somebody do some research or call someone. This needs to be communicated. I want to spend my credit and i am tired of sitting on it. Quote Link to comment Share on other sites More sharing options...
Cathy Posted June 20, 2012 Author Report Share Posted June 20, 2012 The above link is to an article on the news star where a spokesman for the governor is quoted in the above article about the fate of the credits already received by taxpayers. Cathy, please read the article. Is there anyway we can get this answer in black and white and documented? What forums are they communicating this in? Who can get LDR or the governor's office to confirm this? Somebody do some research or call someone. This needs to be communicated. I want to spend my credit and i am tired of sitting on it. Hi Battue, Below is the latest I have from the DOR sent to me by my district's Senator. However, in all honesty, if you were a client of mine, I sincerely would advise you to continue to hold on to your refund. Again, this is the most bazaar issue I've been faced with in my 40 years of tax preparation. The Society of Louisiana CPA's has a meeting with Ms. Smith this Thursday to further discuss the credit issue. My feelings are this: Public funds cannot be given away....period, no ifs ands or buts about it! If the credits are legit, then they MUST be given to all that qualifies. If not, then those issued in error should be recalled. Sorry, but I have an ethical responsibility as a tax preparer. Whichever, good luck! Take care, Cathy Good afternoon. Acting Secretary of Revenue Jane Smith wants every LDR employee to be informed about the status of the Alternative Fuel Tax Credit: ·On June 14, 2012, Governor Bobby Jindal rescinded an LDR emergency rule regarding alternative fuel tax credits (La. R.S. 47:6035). LDR has begun the rule making process to determine the proper scope of this tax credit. ·LDR will honor any refunds already paid. ·We will grant refund requests postmarked on or before June 14, 2012, the date the emergency rule was rescinded. ·We will be able to address questions about future claims after we complete a thorough rule-making process. This information is to be used in response to any constituent inquiry regarding the tax credit. Any inquiry from a reporter or news outlet must be referred directly to the Public Affairs Division: ·Press Secretary Byron Henderson – [email protected]; or ·Public Information Officer Jeff Duhe – [email protected] Thanks, BH Byron Henderson Press Secretary Louisiana Department of Revenue 219-2700 Ext. 2156 [email protected] Quote Link to comment Share on other sites More sharing options...
ssnlaf Posted June 22, 2012 Report Share Posted June 22, 2012 Does the purchase price mean the list price or the price paid aftern the trade in value of the old vechile? Quote Link to comment Share on other sites More sharing options...
Battue Posted July 3, 2012 Report Share Posted July 3, 2012 I have friends who filed the credit on June 14th or shortly before. Why haven't they received their refunds? The LDR printed on their website a news release saying they would honor all previously filed returns on or before June 14th. Why aren't people receiving refunds? This worries me...Somebody needs to call and ask the LDR what is going on.... Quote Link to comment Share on other sites More sharing options...
tetspa Posted July 5, 2012 Report Share Posted July 5, 2012 I hate to disagree with you, Cathy, but I must. The fact that the Governor has drawn a line in the sign by honoring requests for refunds mailed in before a specific date now puts you in a position of having to explain to your clients that you held off for "why didn't you file when I first brought it up...if you had, I would probably have the $ 3000 in my bank account." Now, someone will have to file a lawsuit against the state to compell them to honor all claims, and it will probably take years. Louisiana will lose in the end and have to pay, but I don't believe you served your client's interests very well. In my opinion you had more than your due dilligence would have demanded on you when you got the first response saying the credit was proper, and you DEFINITELY had enough with the emergency declaration. I would have got every client filed with 24-48 hours after that just to get them on the record. I would have expressed my concerns, but I definitely would have filed the claims. And all of them would have been in "under the wire" before the Governor's "improper" cut-off date. If your clients that missed out (and by "missed out" I really mean missed out on getting the refund timely vs. having to probably now wait years) "understand", then your clients are more "understanding" than I would be. By the way, I would still file the returns now just to avoid any sol issues, even though the Governor has essentially said the state will not honor them now. Years from now when this gets reversed by the courts, you will at least have the claim in before the sol runs out. Quote Link to comment Share on other sites More sharing options...
Cathy Posted July 8, 2012 Author Report Share Posted July 8, 2012 The "sol" doesn't expire until 12-31-13 for 2009 returns, 12-31-14 for 2010 returns and 12-31-15 for 2011 returns so have no fear that my clients will receive their refunds with interest if they are found to be legitimate. I wouldn't change a thing in my research and the many times I communicated with state officials if I had to face another issue as bazaar as this credit. I turn away clients with attitudes such as yours. My clients take pride in the fact that they know their returns are prepared according to the tax codes. I also take pride every time I hear those words from them and the new clients that are referred to me each year. There is much more to this issue that has not been made public as of yet and I'm not at liberty to disclose everything I know at the present time. Quote Link to comment Share on other sites More sharing options...
tetspa Posted December 24, 2012 Report Share Posted December 24, 2012 What is the latest on this? Has the state stopped paying new claims? Has anybody had to repay their refunds back? What happens if someone submits an amended return today claiming the credit? Quote Link to comment Share on other sites More sharing options...
Lynn EA USTCP in Louisiana Posted December 24, 2012 Report Share Posted December 24, 2012 News Release FOR IMMEDIATE RELEASE December 20, 2012 FOR MORE INFORMATION: Douglas Baker Director of Communications 225.226.0694 (mobile) [email protected] LDR FACT SHEET: Alternative Fuels Tax Credit § An emergency rule was issued by former Secretary of Revenue Cynthia Bridges on April 30, 2012, that expanded the scope of R.S. 47:6035 to allow Louisiana taxpayers to claim tax credits for the purchase of flex-fuel vehicles; § The emergency rule issued by former Secretary Bridges was not in accordance with the Administrative Procedure Act (APA); § Since the emergency rule was not issued in accordance with the APA, the rule was rescinded by the Governor on June 14, 2012; § Louisiana Department of Revenue (LDR) issued a statement on June 19, 2012 that indicated all claims under the Alternative Fuel Tax Credit Program postmarked on or before June 14, 2012, would be honored; § After the governor rescinded the previous emergency rule, LDR initiated the formal rule-making process in full accordance with all APA requirements, and in consultation with the Department of Natural Resources (DNR); § The published rule (effective today - December 20, 2012) clarifies the legislative intent of R.S. 47:6035 and reflects the legislative record of deliberations prior to final passage of the Act; § Between June 14, 2012, and December 17, 2012, all claims received and held by LDR total approximately $11.2M; § Of the $11.2M currently held by LDR, approximately $9M relates directly to flex-fuel vehicles. § No credits will be allowed for any claim related to flex-fuel vehicles received by LDR after June 14, 2012; § Vehicles that operate on both alternative fuel and petroleum based fuel from the same tank will be disallowed for the credit; § Flex-fuel vehicles are not eligible for the tax credit; § Claims that continue to qualify for the tax credit under the new rule (LAC 61:I.913) include: o fueling stations o vehicle conversions o vehicles that operate on an alternative fuel from a separate tank that does not burn petroleum gasoline or petroleum diesel; § Analysis is ongoing regarding a final annual financial estimate to the state as to the number of applications received by LDR after June 14, 2012. Lynn Jacobs, EA Enrolled Agent Civil Law Notary Kenner, LA Quote Link to comment Share on other sites More sharing options...
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