Electric Car Tax Credit Abused By Thousands, Including Hummer Owners and Prisoners

The push for alternative fuel vehicles continues as state, federal and private funds are used to promote new technologies. Following former President George W. Bush's incentives for fuel stations to expand access to biofuels, President Obama has increased the promotion of alternative vehicles over the last two years using tax credits in an attempt to reach his administration's goal of putting more than a million electric cars on the road by 2015.

While the government has offered various incentives to increase people's interest in owning and operating electric vehicles, none have proven more popular than a $7,500 tax credit for a plug-in electric drive motor vehicle. Unfortunately, a recent report by the Treasury Department's inspector general indicates that well over $30 million in credits may have been improperly claimed by purchasers of non-electric vehicles, including Cadillac Escalades, Hummer H3s and other gas guzzling SUVs. The report indicates that some wrongful claimants were actually incarcerated or IRS employees at the time the improper credit was taken.