Partnership expenses

[oceanlovin'ea]

I did a search on partnerships and couldn't find this question or answer in the past posts.

New client this year with a small 2 person partnership. 2010 partnership return was audited by IRS and they came away with a no change ruling. That was great for them, especially since they went by themselves to the audit.

She has given me mileage for the vehicles used in the business during 2011. I looked at last years return and the preparer took a portion of actual expenses and depreciation. The partnership doesn't own the vehicles. So my thoughts were that they could take the mileage as unreimbursed partnership expenses.

But I might have to see the 2008 return to see if actual had been used since the beginning.

My other thought is that since it went through an audit and the auditors allowed what was being done, I should continue.

Any thoughts??

Linda, EA

[oceanlovin'ea]

Found answer

I found the answer. If fact, IRS auditor told them not to take actual expenses. That was the direction I was leaning anyway.

I will take the mileage as UPE deduction.

Linda, EA

[Gretel]

My other thought is that since it went through an audit and the auditors allowed what was being done, I should continue.

Any thoughts??

Linda, EA

Even though you might have a better argument for certain tax treatment after an audit, I do not think that just because something was allowed or overlooked at one time that one has a free ride for ever.

I would do what I feel is right to do.