Form 8834 Reqeusted by IRS

[Ferdinand_S]

I filed a standard individual tax return for 2020 I purchased a new plug-in hybrid car on November 2020. I took a credit for the car and turbo tax used form 8936. I received a letter from the IRS that form 8834 is missing. I try to contact IRS but no luck.

I don't understand why I need form 8834 if I already submitted form 8936. What do I do? I gust want to get credit for buying a plug-in car.

[ErnieS0]

Were you able to use the full credit? The IRS may be asking for Form 8834 because you only claimed part of the credit.

Unfortunately if you cannot use part of the credit because of the tax liability limit, the unused credit is lost. The unused or excess credit cannot be carried back or forward to other tax years.

[Ferdinand_S]

On form 8936 generated by Turbo Tax, I had the maximum credit allowed. 

[ThomasM125 · Accepted solution]

Form 8834 is used when your vehicle is used in a passive activity, which means you use it in a business that generated passive income.

If that does not apply to you, you need to respond to the IRS notice and explain that you don't use the vehicle in a passive activity, so you they don't need the form 8834.

[Ferdinand_S]

Thank you. I will write a letter to the IRS.