TAX COURT OPINION

Case: Thomas E. Dapp & Susan R. Dapp
Docket Number: 21132-12
Judge: Morrison
Opinion Type: bench
Filed: 10/22/2014
Pages: 8

RMM UNITED STATES TAX COURT WASHINGTON, DC 20217 THOMAS E. DAPP & SUSAN R. DAPP, Petitioners v. ) ) ) ) Docket No. 21132-12. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ) ORDER OF SERVICE OF TRANSCRIPT Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, the Court transmits, with this Order, to petitioners and respondent, a portion of the transcript of the trial of the above case (which was tried before me at Indianapolis, Indiana on October 3, 2014) containing my Oral Findings of Fact and Opinion. In accordance with the Oral Findings of Fact and Opinion, an appropriate decision will be entered. (Signed) Richard T. Morrison Judge Dated: Washington, D.C. October 22, 2014 SERVED Oct 24 2014 Capital Reporting Company 3 1 Bench Opinion by Judge Richard T. Morrison 2 October 3, 2014 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Thomas E. Dapp & Susan R. Dapp v. Commissioner Docket No. 21132-12 THE COURT: Good morning. The Court has decided to render oral findings of fact and opinion p in this case. The following represents the Court's oral findings of fact and opinion which shall not be relied on as precedent in any other case.% Ghis bench opinion is made pursuant to the authority granted by section 7459(b) of the Internal Revenue Code, and Tax Court Rule of Practice and Procedure 152. Unless otherwise indicated, all references to sections are to sections of the Internal Revenue Code. By a statutory notice of deficiency,the IRS RTM determined a $5,847 deficiency in the federal income tax of the Petitioners, Thomas E. Dapp and Susan R. Dapp, for the tax year 201 C The trial of this case was conducted on 21 October 2, 2014, in Indianapolis, Indiana. 22 23 24 FINDINGS OF FACT The Dapps resided in Indiana when they filed their petition. In 2009 the Dapps located a 25 distributh of vehicles having the specifications of' 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 4 1 2 3 4 they believed necessary to qualify for the plug-in A electric drive vehicle credit under Section 30D. The RTg name of the distributor was Drive Electric, LLC.) RTM 09 Drive Electric listed for sale four RTM 5 different models of electric vehicles it maintained 6 7 8 9 10 11 12 13 14 15 had the specifications necessary to qualify for the Section 30D credit 11 of which were manufactured by Zone Electric, LLC. On October 7, 2009, an industry director of RTM the IRS' s large and midsize 12usiness division for the RT heavy manufacturing and transportation industry issued a letter to Zone Electric concerning the submissions made by Zone Electric under IRS Notice 2009-54 and Section 30D regarding the model year 2010 Spark Low Speed Vehicles manufactured by Zone 16 Electric. ¶W 17 18 19 20 Zone Electric had sought certification that the vehicles met the requirements of Section 30D as new qualified plug-in electric drive motor vehicles. The letter from the IRS certified that certain Zone 21 Electric vehicles qualified for the credit and that RTVM 22 23 24 25 the certification was valid only through December 31, 2009 t which time the vehicle(s)would need to be RDYi resubmitted under the revised provisions of ction 30D and any subsequent IRS notices covering that 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 5 1 2 3 4 5 6 7 8 9 10 11 12 13 period. The letter further stated that a purchaser of any of the listed vehicles may rely on the certification concerning the vehiclesk qualification for the Section 30D credit. On December 31, 2009, the Dapps ordered an electric vehicle from Drive Electric via its web site, Freeelectriccar.com. The vehicle was a one Spark NEV-48EX Low Speed Vehicle to be manufactured A by Zone Electric. This model was one of the types of vehicles described in the IRS letter of October 7, 2009. On December 31, 2009, Susan Dapp made a $7,329.53 payment to purchase a vehicle in that 14 model. This amount comprised $6,596.53 for the 15 16 17 18 19 20 21 22 23 24 vehicle, a $695 shipping fee, or rather fee for shipping the vehicle to Carmel, Indiana, where the Dapps resided, with a scheduled delivery date of August 30, 2010, and a $38 handling fee. In connection with the purchase of the vehicle, Susan Dapp was issued a bill of sale by Drive Electric dated December 31, 2009. The bill of sale stated that Drive Electric"hereby sells and conveys a vehicle with VIN number 5F8SE24L8AZ009746 and Jtransfers title" 'b the vehicle to Susan Dapp. A A of The 25 bill of sale further described the vehicle as odel 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company Spark NEV-4AEX, vehicle year 2010, vehicle color"fire RlV4 6 A A AE engine red and vehicle body type %SV/NEV/ZEV? A certificate of origin)dated December 31, A 2009, was issued by Zone Electric. The certificat,Úen R 83h4 h 1 2 3 4 5 6 of origin stated that the vehicle as described in the above-referenced bill of sale had been transferred to 7 Drive Electric from Zone Electric. 8 9 10 11 12 On June 2, 2010, Susan Dapp paid an additional $695 to upgrade the vehicle to be delivered from a standard to a premium package.4Von R17v August 31, 2010, Susan Dapp took delivery of the , vehicle ordered and paid for on December 31, 2009,, 13 with the upgrade ordered and paid for on June 2, 14 15 16 17 18 19 20 21 22 23 24 25 2010, at the Dapps' home in Carmel, Indiana. The Dapps then began to use this vehicle. They elected joint filing status on their timely filed income tax return Form 10403 for the taxable year ended December 31, 2010. On the return they claimed entitlement to a carryover of a $6,497 Section 30D credit from 2009 for the vehicle. They now contend that the $6,497 credit is directly applicable to their 2010 tax liability. OPINION Generally the IRS's determination of a deficiency is presumed correct:and the taxpayer bears p A 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 7 the burden of proving that it is incorrect by a preponderance of the evidence. The burden of proof is imposed on the IRS for factual issues which meet the requirements of Section 7491(a). The findings of fact in this nch O inion are supported by the preponderance of the evidence. Therefore, it does not matter which party bears the burden of proof. Section 30D was first added to the Internal Revenue Code by the Energy Improvement and Extension Act of 2008 effective for taxable years beginning after December 31, 2008. Section 30D provided a tax credit for the taxable year for each new qualified plug-in electric drive motor vehicle placed in FC service by the taxpayer during the taxable year. The vehicle purchased by the Dapps was a new qualified plug-in electric drive motor vehicle, as that A term was defined in ection 30Dias it was originally enacted. Section 30D was amended by the American Recovery and Reinvestment Act of 2009. Under the amended Section 30D, the definition of a new qualified plug-in electric drive motor vehicle was g}YV\ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 modified. Under the new definition, the type of 24 25 vehicle purchased by the Dapps was not a new qualified plug_in electric drive motor vehicle. The 33VT 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 8 amended Section 30D applied to vehicles acquired after December 31, 2009. To determine whether the Dapps are entitled to a Section 30D credit for the vehicle that they purchased, we first consider whether the governing statute is the originally-enacted Section 30D or the pyy4 A amended Section 30D. The answer to this question depends on whether the Dapps acquired the vehicle after December 31, 2009. We hold that the Dapps acquired the vehicle after December 31, 2009. Thel vehicle was not in existence in the year 2009. Th Dapps payment made on the last day of 2009, A their P(W placement of the order on the last day of 2009, and the bill of sale and other paperwork)gave the Dapps the right to receive a vehicle of the type specified by them in 2009 Iut they did not acquire the vehicle itself in 2009. The Dapps contend that they relied on IRS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Notice 2009-54, which stated in part that a purchaser 20 21 22 23 24 of a vehicle can claim the Section 30D credit if the vehicle is purchased by the taxpayer on or before it R-PP December 31, 2009. A This language, the Dapps contend, should be given effect by the Court in resolving their entitlement to the credit. We disagree. 25 Notice 2009-54 was one of two notices issued by the 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 9 IRS to administer the Section 30D credit. By its own terms, Notice 2009-54 applied to vehicles acquired on or before December 31, 2009. The second notice applied to vehicles acquired after December 31, 2009. Because the Dapps acquired their vehicle after December 31, 2009, Notice 2009-54 is not applicable to their vehicle.ÚbTheir entitlement Ñ¶h4 to the Section 30D credit for the vehicle is governed by the language of amended Section 30D. Under the amended Section 30D, the vehicle they purchased is not a new qualified plug_in electric drive motor R"hv\ vehicle. Therefore, the Dapps are not entitled to the Section 30D. Consequently, the IRS's determination of the deficiency for 2010 is sustained.ho give effect to the foregoing, a decision will be entered in favor of the spondent. This concludes the Court's pral findings of ftTh fact and opinion in this case. R7l THE COURT: This also concludes the trial session. THE CLERK: All rise. (Whereupon, at 10:14 a.m., the above- entitled matter was concluded.) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 866.488.DEPO www.CapitalReportingCompany.com