No Mileage Log, No Deduction!!

No Mileage Log, No Deduction!!

Many clients ask me ” do I have to keep a mileage log or some form of documentation to claim my auto or truck expenses”–My response and the tax courts response is always a resounding YES!!

The Tax Court has this to say about the auto deduction:

  • Automobile mileage deductions are subject to the strict substantiation requirements of IRS Code Section 274(d)
  • The court will NOT grant a deduction to the taxpayer who proves business use but fails the heightened substantiation requirements of section 274(d)
  • To deduct expenses such as travel, entertainment, and auto expense the taxpayer must substantiate, by adequate records or sufficient evidence to corroborate the taxpayer’s own testimony, by the amount spent (or mileage, if electing the mileage method), the time and place of use, and the business purpose
  • In lieu of contemporaneous log of auto use, the taxpayer may present corroborative evidence to support their reconstruction of the elements of use, but the corroborative evidence must have ” a high degree of probative value to elevate such statement” to the level of credibility of a contemporaneous record

The tax Court then continues to outline the necessary components to deduct the standard mileage rate method, which I will not discuss here.

There are a number of planning tips to reduce this burdensome record keeping and documentation requirement that I discuss with clients.

However, rest assured–No Mileage Log, No Deduction!