Mileage Log

[Brian EA]

Taxpayer brought in a single sheet listing the months and business miles for the year.

Would this be an acceptable record?

Thanks

Brian

[taxmom34]

that's not a mileage log.

[TAXNJ]

You can....

Taxpayer brought in a single sheet listing the months and business miles for the year.

Would this be an acceptable record?

Thanks

Brian

reference TTB 10-3 (excerpt below):

Automobiles. Taxpayers using either the standard mileage rate method or the actual expense method must keep a record of total miles driven throughout the year as well as the business purpose and number of miles driven for business. One method is to use beginning and ending odometer readings.

Mileage logs. The mere existence of a mileage log is not sufficient if the entries are too generalized or not supported by other corroborating evidence.

Standard mileage rate method. In addition to the mileage records, taxpayers should keep substantiation for other deductible expenses such as auto loan interest, personal property taxes, parking fees, and tolls. See Costs not included in the standard mileage rate, page 10-4.

Actual expense method. In addition to mileage records, which will include the business purpose and destination, taxpayers should keep records showing the cost of the car and any improvements along with the date business use began. Substantiate expenses by keeping an exact record of the amount paid for gasoline, repairs, insurance, etc. as well as the date of the expense.

[TaxGuyBill]

I suppose is depends on what you mean by "acceptable". I would accept it for tax preparation, but I would tell the taxpayer it would not be acceptable in an audit.

See Table 5-1 and 5-2 in Publication 463 for what should be done.

https://www.irs.gov/pub/irs-pdf/p463.pdf#page=26

[taxea]

I would not accept it as a log unless it included columns for date, location, purpose and total miles.

[mastertaxguy]

Acceptable record for what?

Taxpayer brought in a single sheet listing the months and business miles for the year.

Would this be an acceptable record?

Thanks

Brian

Well, references to TTB and IRS Publication 463 are correct of course, but not "substantial authority" as we all know.

Along the line of "not substantial authority" is the following provision of IRS publication 463, p 26 (current version):

"Sampling. You can keep an adequate record
for parts of a tax year and use that record to
prove the amount of business or investment use
for the entire year. You must demonstrate by
other evidence that the periods for which an adequate
record is kept are representative of the
use throughout the tax year."

In spite of the character of this "authority" source, my office has utilized this method several times with "high success" on IRS examinations.

Of course, we also ask to see the odometer to see if it matches with prior claimed mileage. But then again, we take some with these issues.

[taxea]

I suppose is depends on what you mean by "acceptable". I would accept it for tax preparation, but I would tell the taxpayer it would not be acceptable in an audit.

See Table 5-1 and 5-2 in Publication 463 for what should be done.

https://www.irs.gov/pub/irs-pdf/p463.pdf#page=26

Does this meet due diligence on your part?

[Rapid Robert]

Does this meet due diligence on your part?

A related question is, what do you check for the questions about "is their a log" and "is it written"? (for example Schedule C lines 47 a and b). Once or twice, I have filed returns honestly answering "no" to the "is it written" part. Some say that alone means I cannot sign the return claiming the deduction without perjuring myself; I don't agree, and in reality, the return was accepted and no letter from the IRS about the matter.

I don't think we have a due diligence requirement to examine the logs ourselves, simply to explain the rules to the taxpayer, and have a good faith reliance on the total number they give us if it does not seem unreasonable. In other words, if they claim 20K miles for business, then I'm probably going to ask for more evidence, and not claim the deduction unless it looks up to standards.

[TAXNJ]

Is the....

A related question is, what do you check for the questions about "is their a log" and "is it written"? (for example Schedule C lines 47 a and b). Once or twice, I have filed returns honestly answering "no" to the "is it written" part. Some say that alone means I cannot sign the return claiming the deduction without perjuring myself; I don't agree, and in reality, the return was accepted and no letter from the IRS about the matter.

I don't think we have a due diligence requirement to examine the logs ourselves, simply to explain the rules to the taxpayer, and have a good faith reliance on the total number they give us if it does not seem unreasonable. In other words, if they claim 20K miles for business, then I'm probably going to ask for more evidence, and not claim the deduction unless it looks up to standards.

question directed to you?

Reasonable and judgement decisions seem to play here for tax preparation. As long as you advise the client the records "they" need to substantiate in case of an IRS audit, think you are meeting your due diligence, otherwise will you ask for all receipts for sales, etc. to substantiate ?

[Brian EA]

I do not think that I will be preparing this return. It does not look good to me.

Thanks all

Brian