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Income tax item- corps and use of mileage method.......
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jakescia
Posted 6/25/2006 15:34 (#21916 - in reply to #21868)
Subject: RE: Income tax item- corps and use of mileage method.......



Oskaloosa, Iowa 52577

From Reg 1.274-5T-----------

para 1.274-5T(c)(2)(ii(C)------------

 

(C) Substantiation of business use of listed property


(1) Degree of substantiation. --In order to constitute an adequate record (within the meaning of section Previous Term274(d)Next Term and this paragraph (c)(2)(ii)), which substantiates business/investment use of listed property (as defined in §1.280F-6T(d)(3)), the record must contain sufficient information as to each element of every business/investment use. However, the level of detail required in an adequate record to substantiate business/investment use may vary depending upon the facts and circumstances. For example, a taxpayer who uses a truck for both business and personal purposes and whose only business use of a truck is to make deliveries to customers on an established route may satisfy the adequate record requirement by recording the total number [of] miles driven during the taxable year, the length of the delivery route once, and the date of each trip at or near the time of the trips. Alternatively, the taxpayer may establish the date of each trip with a receipt, record of delivery, or other documentary evidence.

(2) Written record. --Generally, an adequate record must be written. However, a record of the business use of listed property, such as a computer or automobile, prepared in a computer memory device with the aid of a logging program will constitute an adequate record.

We recommend.........date.........miles beginning.....miles ending......name of person and location................short description as to business purpose.

The above will satisfy all of the different situations that I can think might exist.
Personal miles would then not have to be accounted for, except in total for the year........although keeping track of personal miles would help a person to NOT overlook writing down business trips.

In the case of auto and travel expenses, the concept of too much documentation does not exist------the more the better.

If a diary is presented during audit, we have seen very few agents (I cannot remember of any) who did anything more than just thumb thru the pages, apparently checking to see that entries were in fact made.    HOWEVER.........no detailed log means automatic killing of the deduction.  The US Supreme Court sometime back ruled that no record, no deduct.  So, the agents have no choice in the matter---------no detail, no deduct.

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