Weekly Legislative Update
February 27, 2023

TIA Exploring Defect Issue: Hyundai and Kia

From: Joanna Johnson, AOCA (Automotive Oil Change Association) Policy Advisor

Regarding all of the following listed Hyundai and Kia models, have any TIA members experienced a customer’s dealership claiming an engine seizure was caused by the oil drain plug falling out mid-interval i.e., 1,000 – 8,000 miles post-aftermarket service?

AOCA is in the process of developing a NHTSA defect petition and related MMWA complaint to the FTC. Please report confidentially to TIA or AOCA by VIN, city/state, mileage between service and allegation of plug-out, and the result of any aftermarket inspection of the alleged plug-out engine.

We cannot use any case that does not provide a complete VIN. Consumer complaints to NHTSA and aftermarket professionals’ experience with inspecting these alleged plug-out engines thus far indicates some of the cases are actually rod punctures.

BACKGROUND: Hyundai and Kia have issued an extensive patchwork of recalls and/or TSBs for all the listed models—Theta, Nu & Gamma engines alike—on the subjects of excessive oil consumption and/or rod bearing problems that can ultimately cause engine seizure, including after a rod punctures the

engine block. The discovery of this nearly make-wide defect and the automakers’ attempts to manage it came from studying a bizarre recent trend of mid-interval plug-out claims made by Hyundai and Kia dealerships nationwide in situations where specification parts and torque pressure had been used and could be verified. There may also be another defect associated with the factory oil drain pan assembly being made of cheap stamped steel and painted so that the factory gasket and plug are painted together onto the pan, thereby camouflaging the gasket and creating a risk of double-gasketing. The factory gasket appears to be plastic and must be pried off.

KIA VEHICLES

2014 – 2021 Kia Cadenza

2012 – 2021 Kia Forte

2021 K5 (DL3A)

2015 – 2021 K900 (KH, RJ)

2017 – 2021 Niro (DE, DE HEV)

2014 – 2021 Kia Optima

2011 – 2013 Kia Optima Hybrid

2018 – 2021 Rio (SC)

2015 – 2021 Kia Sedona

2021 Kia Seltos

2018 – 2021 Stinger (CK)

2012 – 2021 Kia Sorento

2012 – 2021 Kia Soul

2011 – 2021 Kia Sportage

2020 – 2021 Telluride (ON)

HYUNDAI VEHICLES

1997-2021 Hyundai Accent

1997 Hyundai Accent Gt

1997 – 2021 Hyundai Elantra

2013 – 2020 Hyundai Elantra GT

2007 – 2013 Hyundai Elantra Touring

2018 – 2022 Hyundai Kona

2019 – 2021 Hyundai Kona Electric

2000 – 2021 Hyundai Santa Fe

2019 Hyundai Santa Fe XL

2013 – 2018 Hyundai Santa Fe Sport

1997 – 2021 Hyundai Sonata

2011 – 2021 Hyundai Sonata Hybrid

2016 – 2019 Hyundai Sonata Plug-in Hybrid

2004 – 2021 Hyundai Tucson

2015-2017 Hyundai Tucson Fuel Cell

2011 – 2021 Hyundai Veloster

2021 Hyundai Genesis Gv80

2019-2021 Hyundai Genesis G70

2017-2021 Hyundai Genesis G80

2017-2020 Genesis G90

1997 Hypertek Dominator

2005-2017 Hyundai Azera

2006-2009 Hyundai Entourage

2009-2017 Hyundai Equus

1997-1998, 2001 Hyundai Excel

2008-2018 Hyundai Genesis

2010-2017 Hyundai Genesis Coupe

2020 Hyundai Genesis G70

2020 Hyundai Ioniq

2017-2020 Hyundai Ioniq Electric

2017-2020 Hyundai Ioniq Hybrid

2018-2020 Hyundai Ioniq Plug-In Hybrid

2019-2020 Hyundai Nexo

2019-2020 Hyundai Nexo Fuel Cell

2020-2021 Hyundai Palisade

1997 Hyundai Scoupe

1997-2008 Hyundai Tiburon

2001 Hyundai Trajet

2020-2021 Hyundai Venue

2007-2012 Hyundai Veracruz

1999-2002 Hyundai Xg

2004 Hyundai Xg 350

2001-2004 Hyundai Xg300

2001-2002 Hyundai Xg300l

2001-2006 Hyundai Xg350

Please contact: rlittlefield2@tireindustry.org if you have experienced this issue.

IRS Introduces New Service Industry Tip Reporting Program

The Treasury Department and Internal Revenue Service recently issued Notice 2023-13, which contains a proposed revenue procedure that would establish the Service Industry Tip Compliance Agreement (SITCA) program, a voluntary tip reporting program between the IRS and employers in various service industries. The IRS is issuing this guidance in proposed form to provide an opportunity for public comment.

The proposed SITCA program is designed to take advantage of advancements in point-of-sale, time and attendance systems, and electronic payment settlement methods to improve tip reporting compliance. The proposed program would also decrease taxpayer and IRS administrative burdens and provide more transparency and certainty to taxpayers. The proposed program includes several features:

1. The monitoring of employer compliance based on actual annual tip revenue and charge tip data from an employer’s point-of-sale system, and allowance for adjustments in tipping practices from year to year.
2. Participating employers demonstrate compliance with the program requirements by submitting an annual report after the close of the calendar year, which reduces the need for compliance reviews by the IRS.
3. Participating employers receive protection from liability under the rules that define tips as part of an employee’s pay for calendar years in which they remain compliant with program requirements.
4. Participating employers have flexibility to implement employee tip reporting policies that are best suited for their employees and their business model in accordance with the section of the tax law that requires employees to report tips to their employers.

The intent of the SITCA program is to serve as the sole tip reporting compliance program for employers in various service industries and would replace the following programs:

1. Tip Rate Determination Agreement (TRDA)
2. Tip Reporting Alternative Commitment (TRAC)
3. Employer designed TRAC (EmTRAC)

The IRS is continuing to explore opportunities within the gaming industry and, as such, this program does not impact the existing Gaming Industry Tip Compliance Agreement (GITCA) program.

?The proposed revenue procedure provides that for employers with any of these existing agreements, such agreements would remain in effect until the earlier of:

1. The employer’s acceptance into the SITCA program;
2. An IRS determination that the employer is noncompliant with the terms of their TRDA, TRAC or EmTRAC agreement; or
3. The end of the first full calendar year after the final revenue procedure is published in the Internal Revenue Bulletin.

Anyone interested in providing feedback to the proposed SITCA program should follow the instructions in the notice and reply by May 7, 2023.