A couple who used their vehicles in their sole proprietorships found this out the hard way. Their logbooks were riddled with mistakes, questionable entries and other irregularities – so much so that the Tax Court was unable to rely on them. As a result, the Court upheld IRS’ disallowance of all mileage expenses for the vehicles, even though they were partially for business (Moore, TC Summ. Op. 2012-16)
Kiplinger Tax Letter March 2012
We covered auto substantiation rules in greater detail on our blog article (http://bit.ly/Mn6gtb). This is an area that the IRS auditors are keying in on since it is usually a high dollar amount and very few business owners actually keep good mileage logs.
Don’t say I didn’t warn you!
Like any good CPA, I need to add a disclaimer: Unfortunately, it is impossible to offer comprehensive tax info over the internet, no matter how well researched or written. And remember, I love my readers but having me bookmarked on your computer doesn’t make you a client: before relying on any information given on this site, contact a tax professional to discuss your particular situation.