VW buyers improperly got $50 million in 'clean energy' tax credits, senators say

A diesel Passat is photographed at the Al Johnson Volkswagen Volvo dealership on Tuesday, Sept. 22, 2015, in Dalton, Ga.
photo A diesel Passat is photographed at the Al Johnson Volkswagen Volvo dealership on Tuesday, Sept. 22, 2015, in Dalton, Ga.

Motorists who bought Volkswagen and Audi diesel models in 2009 and 2010 shared more than $50 million in federal tax credits that are now being questioned by the leaders of the Senate Finance Committee because of VW's violation of EPA emissions standards with its diesel engines.

U.S. Senate Finance Chairman Orrin Hatch, R-Utah, and ranking member Ron Wyden, D-Ore., said 60,000 VW diesel buyers improperly got $1,300 per vehicle under a federal tax credit for clean energy cars sold during the Great Recession since the vehicles now appear not to have met EPA pollution standards. Congress authorized the credits to help promote high-mileage, cleaner burning fuel and increase car sales during the recession.

Buyers of the the 2009 VW Jetta TDI sedans and sportwagens and turbocharged direct-injection VW and Audi vehicles sold in 2009 and 2010 got the $1,300 tax credit. Hatch and Wyden has asked VW to provide details about how many and how it certified its vehicles for the federal tax credits.

VW has admitted that it installed software on the diesel models to help pass emission tests even though the actual tailpipe emissions contained up to 40 times more nitrogen oxide pollutants that what EPA allows.

"The vehicles in which Volkswagen installed 'defeat devices' included those that the company certified as qualifying for the advanced lean-burn technology," Hatch and Wyden said in a joint statement. "This activity raises questions of whether Volkswagen made false representations to the U.S. government in its certification for federal tax subsidies."

Volkswagen has admitted that as many as 11 million cars marketed in model years 2009 to 2015 installed the "defeat devices" to fool emission tests and comply with pollution standards even though the vehicles don't do so on the open road.

The senators want Volkswagen to produce by the end of the month answers to the question of whether VW falsely submitted information to the federal government for buyers to qualify for the credits.

"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?" the senators asked in their letter to VW.

Volkswagen is already having to answer questions about its own government subsidies in Tennessee where the company is getting nearly $800 million of tax breaks, grants and other assistance for its Chattanooga assembly plant and its planned expansion.

Tennessee Senate Speaker Pro Tem Bo Watson, R-Chattanooga, has scheduled an Oct. 29 legislative hearing on the state and local tax incentives for VW in Chattanooga.

Contact Dave Flessner at dflessner@timesfreepress.com or at 423-757-6340.