Finance Committee Probes Volkswagen for Tax Fraud
The leaders of the Senate Finance Committee are suggesting that Volkswagen, in cheating emissions tests, also committed a massive tax fraud.
Finance Chairman Orrin G, Hatch R-Utah, and ranking Democrat Ron Wyden of Oregon question in a letter dated Tuesday to executives at the German automaker whether the company made material misrepresentations to the Internal Revenue Service, allowing car buyers to obtain tax credits to which they should not have been entitled.
“In 2008, Volkswagen certified to the Internal Revenue Service that the 2009 Volkswagen Jetta TDI Sedan and SportWagen qualified for $1,300 in tax credits per vehicle sale,” Hatch and Wyden wrote. “On October 6 of that year, the IRS acknowledged Volkswagen’s certification. Other 2010 Turbocharged Direct Injection (TDI) Volkswagen and Audi vehicles were later certified for eligibility. Volkswagen sold at least 60,000 of these vehicles by July 1, 2010, after which the credit amount was reduced in half until December 31 of that year. These figures suggest that well over $50 million in tax subsidies went to purchasers of these vehicles, depending on the number of purchasers who claimed the credit.”
A potential conspiracy to defraud the IRS could only increase the interest among lawmakers in criminal prosecutions of Volkswagen management. That’s a call already made by Sen. Bill Nelson, D-Fla.
The Finance Committee released the letter one day before Michael Horn, the president and CEO of Volkswagen Group of America, is scheduled to testify before the House Energy and Commerce Committee about the company’s practices that led to a recall of diesel-powered vehicles that the Environmental Protection Agency and other regulators found used “defeat devices” to dupe emissions inspections.
Horn and Matthias Müller, the CEO of Volkswagen AG, were each sent copies of the letter, which was first reported by The Associated Press . The full list of questions and requests for documents requested by the end of October from the Volkswagen executives appears below:
1. All certifications and quarterly reports filed by Volkswagen related to eligibility of Volkswagen vehicles for the advanced lean-burn technology motor vehicle credit. In addition to these certifications and reports, provide the following information:
a. Did Volkswagen make false or misleading assertions in any of the materials submitted to, or communications made to, the U.S. government regarding eligibility of Volkswagen vehicles for the lean-burn technology motor vehicle credit?
b. Which Volkswagen employees were primarily responsible for preparing and submitting these certifications?
c. Which Volkswagen employees were the primary points of contact for communication with the Internal Revenue Service regarding the advanced lean-burn technology motor vehicle credit?
d. List the dates and attendees of any meetings between Volkswagen employees and the Department of the Treasury, Internal Revenue Service, or the Department of Energy regarding the certification.
2. All documents and communications regarding certifications and quarterly reports filed by Volkswagen related to eligibility of Volkswagen vehicles for the advanced lean-burn technology motor vehicle credit.
3. All documents and communications between Volkswagen and the Department of the Treasury, Internal Revenue Service, or the Department of Energy referring or relating to the advanced lean-burn technology motor vehicle credit.
4. All documents and communications regarding the eligibility of the 2009 or 2010 Volkswagen Jetta 2.0L TDI, Golf 2.0L TDI, or Audi A3 2.0L TDI for the lean-burn technology motor vehicle credit.
5. All documents and communications from, to, or copying Ulrich Hackenberg, Wolfgang Hatz, or Heinz-Jakob Neusser regarding the eligibility of any Volkswagen vehicle for U.S. tax subsidies.
6. All documents and communications regarding U.S. federal tax subsidies and the manipulation of emissions testing by auxiliary emission control devices or any other method.
7. All promotional materials promoting or otherwise making potential vehicle purchasers aware of the availability of lean-burn technology motor vehicle credits.
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