IRS Shows Little Control Over Energy Tax Credits

The IRS is getting rapped on the knuckles for not showing more control over energy tax credits being claimed by taxpayers. Who would have guessed energy efficiency could be so problematic?

The government wants to wean us off of fossil fuels. To do so, it does what governments usually do. No, not arrest half the population and beat them. In the United States, we use the democratic capitalist system. In short, the government bribes us to change our conduct. More often than not, this is done with tax credits, the proverbial financial carrot.

In this case, the government has been trying to get you and me to improve our homes so they are more energy efficient. Much is said about climate change, but this is really about concerns over energy resources. What? You think we invaded Iraq for the scenery? Regardless, the government is encouraging this modification of behavior by giving us a financial reason to do it. If you buy an energy star certified window that will really act as an insulator, you can claim “x” number of dollars in tax credits. The same goes for energy efficient appliances, doors, water heaters and so on. 

According to the IRS, a surprisingly large number of people in the United States are going green. It bases this conclusion on the number of people claiming these energy efficiency tax credits. Alas, a study by the independent Treasury Department Inspector concluded that a sizeable number of these claims were being made by taxpayers that never actually purchased or installed any energy efficient items. They had just prevailed because the IRS didn’t have any real effective manner of auditing the claims. Doh! As you can imagine, the IRS is now moving to resolve this. 

I have to admit I am rather surprised to see the results of this report. Perhaps I am a dolt [don’t say it], but it would never remotely occur to me to claim tax credits for say a new window that I didn’t actually buy. I mean, what do you say when the IRS agent comes to your house to see the window?! Are people really that crass at this point? Apparently they are.