How many ask clients for a copy of mileage log for review?

[Zee]

Now that the busy season is over for many of you, I'm wondering how many ask client's to provide a copy of their mileage logs for review before completing the tax return?

I don't believe it's a required step to avoid possible preparer penalties, but auto mileage is probably one of the most abused areas. So, I'm wondering if it's really enough to explain what's required in a mileage log and if they have one.

Comments please.

[ChEAr$]

There are four questions on reverse of schedule c

You know what they are. Not my job to ascertain accuracy of the log.

However, for IRS, I would suggest they modify one question which asks:
"Are the records written?" A third choice should be added:
"They are now."

[MAJ]

Mileage Logs & Charitable Donations - Hah!

Funny - Sure I ask - and the answer is alway similar.
I suggest they get the free 'Hallmark Calendar" each year and write down each day where they go. This will allow them to jog their memory and then use MapQuest to figure the correct mileage. I use that alot for people with similar driving habits.

but in the end - it's kind of like charitable donations. One of the most popular answers I get is What did I do last year? My answer, what does one have to do with the other.

I also suggest my clients go to http://itsdeductible.com to track their charitable. I've found that to be a great resourse. It's a shame TurboTax bought them - bu now it's free. I'm okay with sending them to take advantage of their resources. Tax clients I usually find are die hard loyal to their preparers.

I personally can tell you how many miles to the galon my car gets. how much a gallon of gas was at any time of the last 10 years. I have all of my little Hallmark Caelendars in my car. I write down gas, destinations, repairs and client info to job my memory. It's a 15+ year habit at this point.

Enjoy..

[JohnH]

A couple of years back I began having them fill out and sign a separate questionnaire about their mileage. It includes check boxes for the 4 questions. I usually just accept that, but if I'm suspicious or if the amount is large I do ask them to show me the log. Have only done that a few times...

[Gretel]

I use a separate questionnaire for mileage as well but if I don't see the log book I will answer the question if it is written with "No" and my client know this.

I think with donation receipts we are on the hook if we don't verify either receipts or at least get a list of of the names and amounts. Since I started doing this I am amazed how many donations don't qualify - like fund raising to help an individual in need. It's not so much that people want to cheat as it is not knowing.

[oceanlovin'ea]

Give calendars

I give all my clients a pocket calendar each year. Especially ones that will have business mileage.
I tell them to use this to keep track of their mileage. I also tell them to use Mapquest.

I ask them for their mileage figures. They are really getting very good about giving me the exact miles for business. But I don't ask to see the logs. I do ask if they have the logs.

Linda

[kaimana]

My clients are given worksheets to fill out. I keep the original in their handwriting and give them back a copy. Not required to audit their information and I don't.
Gretel you are not required to have the donation receipts, just the amount the client says is on them.

[Gretel]

Gretel you are not required to have the donation receipts, just the amount the client says is on them.

What makes you so sure? This is an honest question. I cannot see how to practice true diligence and not verify this information. You probably mean exactly what you say: no need to see to actual receipts, but do you get a list that lists each donation separately? I think, this is mainly what is needed to verify if organization or donation amount is eligible?

[Jiggers]

Substantiation of Donations

I think with donation receipts we are on the hook if we don't verify either receipts or at least get a list of of the names and amounts. Since I started doing this I am amazed how many donations don't qualify - like fund raising to help an individual in need. It's not so much that people want to cheat as it is not knowing.

I don't think that there is a requirement that we see the receipts and/or list of the donations.

I don't have the time during tax season to review a stack of donations to verify if that is an eligible organization.

I have the client sign off of a statement that substantiation is available.

[geekgirldany]

I make sure they sign off that they have a mileage record and that if anything comes up they will be required to support the deduction.

[MAJ]

Signing off.... Hmmm...

I have not made them sign off on the mileage or donations. But I do make it clear that they understand that if the IRS wanst justification they need to have it - Even for the $1 they put in the Little League can at the grocery store. I know it's an impossible task but that's what I tell them.

Many of my clients provide a list - Some try to start rattleing them off as they scan their ledger for checks. I politely let them know they can just give me a total while I move on to another area of the form.

I suppose I should start making them sign off -
I'm looking to re-write my client letter which is generic sign off -
Have we ever swapped samples and ideas?

[Gretel]

I don't think that there is a requirement that we see the receipts and/or list of the donations.

I don't have the time during tax season to review a stack of donations to verify if that is an eligible organization.

I have the client sign off of a statement that substantiation is available.

I still stand my ground with the need to at least see a list. For me this is part of due diligence especially after seeing how many donations that people think are deductible are not. After all we are supposed to know and I will not risk a $1,000 penalty because of that and have raised my fees accordingly.

It's not me making up these stupid rules.

[S T]

I concur

Gretel,
I am agreeing with you for the most part. And over the years, most of my clients, know to submit the donation receipts along with their other paperwork. We need a list if we are to prepare the form 8283 for non cash donations.

You would also be surprised how many political donations I found imbedded in the donations receipts, sometimes several hundred dollars.

In some instances, it has been a good thing, that I can review and re-tally the numbers as there has been mistakes, both ways, either listing too high a deduction or not listing enough.

On the donated items, it drives me crazy, so some of my clients are just staying under the $250 or $500 so as not to list, others abuse that deduction a lot, and I send them to Its deductible or prepare an itemized list and then review, explaining that the deduction is too high in most cases.

On Mileage, I don't reveiw the actual logs for the most part, unless I believe the mileage is too excessive. I am having the clients fill out a year end statement for my records and answering the questions that are listed on the tax forms and signing and dating the form.

More scrunity for an employee with business miles and more questions.



Sandy

[Burke]

Gretel, I agree with you too. I had quite a few clients who simply gave me a lump sum for charitables in the past. When the new IRS rule went into effect for 2007, I told every one they had to have a receipt, and I was inundated with all their papers. This year, I specifically mentioned I did NOT need to see the receipts themselves, except for property to Goodwill, etc, but I did want an itemized list of donee organizations. You are right, it is amazing how many people "donate" to NRA, AARP and various lobbying organizations that do not qualify as 501(c)(3)'s. I checked a few this year that were suspicious, and found a couple of lobbying groups whose contributions made directly to their orgs did not qualify, but if the check is written to their foundation, well, then it does. So I alerted my client to that effect. Then there was the other client who always had the same amt for in-kind donations year after year, so I told her I required the receipt to put it on the return, and she said she didn't have time to look for it, so just leave it off. Right.

[FEDUKE404]

Why not thorough questions up front?

An interesting discussion....

I do not require my clients to "show me the log" but I do ask very specific questions. As some posters have mentioned, I do not want to trudge through taxpayer records unnecessarily. (And probably the clients do not want to pay me extra $$ for same!)

Essentially it's like comparing the question "How much did you pay doctors?" to "How much did you actually pay doctors, during the calendar year, that was neither covered by insurance nor reimbursed through an employee cafeteria plan?"

Similar for contributions: "What were your contributions?" versus "Let me know your receipted cash/non-cash contributions. Remember you have to reduce the contributions by the value of any product/service received, and you cannot deduct money given to political organizations (except in some states) or to PACs." Many clients do provide a detailed list, which I will review, but doggone if I'm going through a box of receipts!

My position is pretty much that by doing so I've met the due diligence requirements, and quite frankly some of my clients might be offended if they have to sign something that more or less affirms they are not telling an untruth!

Of course, I could just be showing my age and/or ignorance.

FE