ew Internal Revenue Service (IRS) guidelines for the federal electric vehicle (EV) tax credit are a “recipe for fraud,” warns the head of the Tax Foundation.

Consumers will now be able to automatically claim the tax credit at the point of sale on new or used EV purchases, rather than wait to claim it on their tax return, according to the latest Treasury Department guidance.

“Under the Inflation Reduction Act, consumers can choose to transfer their new clean vehicle credit of up to $7,500 and their previously owned clean vehicle credit of up to $4,000 to a car dealer starting January 1, 2024. This will effectively lower the vehicle’s purchase price by providing consumers with an upfront down payment on their clean vehicle at the point of sale, rather than having to wait to claim their credit on their tax return the next year,” the new guidance states. “Only vehicles purchased under the consumer clean vehicle credits are eligible for this benefit.”