For leased vehicles, the IRS does not allow time-of-sale reports to be submitted since leased vehicles are not eligible for the clean vehicle credit. If a time-of-sale report was mistakenly submitted for a leased vehicle, it must be cancelled. Here’s how the IRS handles these cancellations:
Process for Canceling Time-of-Sale Reports for Leased Vehicles
- Identify the Reason for Cancellation: Clearly state that the vehicle was leased and that the buyer is the lessee, not the lessor, as the reason for the cancellation. This should be noted in the explanation box for the reason for the cancellation.
- Use the Modify Report Functionality: Go to the IRS ECO portal and select the “Modify” option to begin the cancellation process for the time-of-sale report. Choose the action that corresponds to returning or canceling a seller report.
- Submit Cancellation Information:
- Input the effective date of the cancellation.
- Provide a description of the reason in the allotted 500 characters.
- Complete any necessary attestations.
- Click “Submit” to finalize the cancellation request.
- Dealers’ Responsibility: Ensure that all information submitted is accurate. The IRS reviews these reports, and incorrect submissions can result in penalties or revocation of a dealer’s registration with the IRS ECO.
- Re-submission of Corrected Reports: If a vehicle was not placed in service, once the cancellation is processed, the VIN may be available for a new time-of-sale report submission in about 2-3 weeks, although processing times can vary.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-does-the-irs-handle-time-of-sale-report-cancellations-for-leased-vehicles/
