C.A.R.S. (Cash For Clunkers) and Back Taxes.
There is a lot of bad information out there about the C.A.R.S (Or Cash For Clunkers) program. Today, I heard a car dealer on a radio talk show say that if the consumer owes any federal or state taxes when they buy a Cash For Clunkers car, the dealer is on the hook to get reimbursed by the consumer or eat the difference, because the federal payment will take out the taxes owed before sending out the rebate.
UNTRUE!
One, the paperwork is submitted by the dealer to the National Highway Traffic Safety Administration, not the IRS and definitely not to the state revenue department. In fact, the NHTSA goes out of their way in the rule to note that they are not experienced or authorized to deal with taxes.
Two, the rebate is payable to the dealer, not to the individual. The dealer provides the discount at sale, not at reimbursement. If rebates were subject to tax checks, dealers would be essentially become responsible for collections of back taxes. That would be messy and cumbersome – not to mention the number of privacy issues involved.
Three, the rule clearly states:
“For a purchaser, a dealer must collect individual or entity name, address and State or corporate identification number (e.g., driver’s license number, State identification number, corporate tax identification number). This information is used to verify the identity of the purchaser and to confirm no prior participation in the program.”
GOT QUESTIONS? YOU GOT PEOPLE!
CONTACT US AT:
MONMOUTH COUNTY AREA H&R BLOCK OFFICES
Open Year Round
115 HWY 35
EATONTOWN, NJ 07724
Phone: 732-542-5380
MIDDLETOWN SHOPPING CTR
1165 HWY 35
MIDDLETOWN, NJ 07748
Phone: 732-671-9314
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