Reporting your vehicle identification on your 2290 return is important. Period.
But there is more to it.
VINs save most taxpayers from scams and straining tax liabilities.
Scenario #1: Reporting VINs For Used Vehicles
If you’re reporting a vehicle identification number for a used vehicle that you just bought, then you might want to check if the seller also sold you the tax burden with the vehicle.
New truckers and fleet owners are sometimes lured in with suspiciously good deals on used vehicles. But once the deal has been closed and the money has been paid, the tax burden surfaces, which brings with it a chaotic wave of tax reporting and worse penalties.
Some sellers price their vehicles at a low price point because they no longer want to deal with the taxes they owe on that vehicle.
And worse, some sellers do not file or pay taxes on their vehicles at all, and when you buy a vehicle with such a complex tax history, you ultimately have to bear the entire tax liability.
And at this point, the “good” deal doesn’t seem that good.
Scenario #2: Reporting Incorrect VINs
Now, in a different scenario, if you do happen to land a good deal but report your vehicle identification number incorrectly, you are in trouble.
Reporting an incorrect will not only result in rejected files but the IRS can also assess noncompliance measures, including unannounced audits and penalties.
But all’s not gray here.
Fleet owners are aware of the dangers of misreporting or not reporting their vehicle identification numbers. So, they depend on certain “hacks” and measures that verify the vehicle identification number.
So, today, we will be introducing you to a tri-step regime to help you report the correct vehicle identification number on your HVUT Form 2290.
Identifying Your VINs Before Reporting
In order to understand if you are actually reporting a VIN that belongs to the vehicle you own, you need to identify the vehicle identification number of the vehicle.
Vehicle identification numbers are a combination of alphabets and numbers. Not all VINs are long, some VINs can be short. This is because of the standardization of the vehicle identification number format. Read more about the history of VINs here.
A vehicle identification number will give away the original geographical location of the manufacturer, model number, and other details about the vehicle.
You can decode the vehicle identification numbers with the help of this detailed read on identifying VINs from EZ2290 without depending on a VIN Lookup tool. If you need additional help, a simple and free VIN decoding tool like VIN Decoder from NHTSA will help you view the details about the vehicle. This will further accelerate identifying the correct VIN that belongs to your vehicle.
Validating Your VINs Before Reporting
Check your vehicle identification number with an authorized VIN Lookup tool such as NICB VIN Check. VIN Validation gives you an inside view of the vehicle history.
Right from checking any public records of accidents in which the vehicle was involved, insurance coverage status and disputes, legal cases, to criminal history in correlation with the VIN you’ve entered, and other important details – VIN validation helps you make well-informed purchases and tax decisions.
Further, all these details help you understand if the vehicle is even worth the effort and the money you are spending.
What’s more? VIN Validation helps you derive your tax liability.
If the previous owner did not pay the taxes or if they paid their taxes in part, you might have to pay those taxes once the ownership changes.
For this reason, the IRS encourages taxpayers who bought used cars to accurately specify the month of first use.
This way, vehicle owners can be taxed appropriately.
Verifying Your VINs Before Reporting
Similar to VIN Validation, VIN Verification is a process where you check if the vehicle identification number and details that you own match the records of the IRS and federal authorities.
When you’re verifying the VIN, be sure to enter the correct VIN characters into the search tools. And be careful and conscious of reporting the correct VIN.
Accurately specifying the month in which your vehicle was first used saves you from straining tax burden.
EZ2290, Powered by Zenwork, Inc., is an IRS-Approved eFile provider for Form 2290 filings. This blog provides informative articles on Form 2290 compliance, expert tips, insights, engaging stories related to truck drivers and trucking regulations.