If the IRS conducts an audit for one year and reviews records, but fails to keep the records and then conducts an audit for a second year, is the taxpayer obligated to provide a second copy of the records the IRS failed to keep from the first year? The court addressed this in United States v.… Continue reading Limits on IRS’s Ability to Ask for Records Multiple Times
Category: Recordkeeping
Recent cases, rulings, and guidance for substantiation and recordkeeping for tax matters.
Truck Driver Expenses Not Subject to Higher Substantiation
The absence of records results in the disallowance of tax deductions and credits on audit. This is particularly true for expenses that are subject to the higher substantiation requirement in Section 280F, such as travel expenses. In Baker v. Commissioner, T.C. Memo. 2014-122, the court considered whether a truck driver’s transportation expenses are subject to the… Continue reading Truck Driver Expenses Not Subject to Higher Substantiation
Truck Expenses Not Deductible Due to Inadequate Mileage Log
In Houchin v. Commissioner, T.C. Summary Opinion 2014-29, the U.S. Tax Court concluded that truck expenses were not deductible as the mileage log did not note the locations the taxpayer traveled to. Facts & Procedural History Mr. Houchin worked as a truck driver, but was unemployed in 2010. He collected unemployment compensation. Mr. Houchin also… Continue reading Truck Expenses Not Deductible Due to Inadequate Mileage Log
Car and Truck Expenses Allowed Based on Mileage Not Actual Costs, Absent Records
In Aivatzidis v. Commissioner, T.C. Summary Opinion 2013-105, the U.S. Tax Court concluded that a professional driver could deduct expenses based on mileage, but not for actual expenses. This case provides an example of why drivers should compute car and truck expenses based on mileage if they do not have sufficient records. Facts & Procedural… Continue reading Car and Truck Expenses Allowed Based on Mileage Not Actual Costs, Absent Records
Fashion Retailers Business Expenses Disallowed as Routine Substantiation Case
In Heinbockel v. Commissioner, T.C. Memo. 2013-125, the U.S. Tax Court considered a routine substantiation case and disallowed business expense deductions for a fashion clothing retailer. This case presents an opportunity to consider how to present routine substantiation cases to the IRS and to the courts. Facts & Procedural History Mrs. Heinbockel was in the… Continue reading Fashion Retailers Business Expenses Disallowed as Routine Substantiation Case
Taxpayer Use of Estimates for Deductions
Can you use publicly available sources of statistical information when you have no records to support the amount of your expenses? The court addressed this in Murray v. Commissioner, T.C. Summary Opinion 2012-66, which involved the IRS’s use of third-party statics. Facts & Procedural History Mr. Murray worked as a truck driver for National Freight, Inc.… Continue reading Taxpayer Use of Estimates for Deductions
Court Determines What Truck Driving Expenses Are Deductible
In Nolder v. Commissioner, T.C. Summary Opinion 2012-50, the U.S. Tax Court examined a number of different expenses incurred by a truck driver to determine which expenses were deductible. This case provides a good overview of the typical expenses truck drivers incur that are and are not deductible. Facts & Procedural History Mr. Nolder was… Continue reading Court Determines What Truck Driving Expenses Are Deductible
Truck Driver Not Entitled to Deduct Meal and Supply Expenses
In Elsayed v. Commissioner, T.C. Summary Opinion 2009-81, the U.S. Tax Court reviewed meal and unreimbursed expenses incurred by a truck driver. This is a common tax problem for truck drivers. This case shows the difficulties truck drivers have in capturing and substantiating their expenses for tax purposes. Facts & Procedural History Elsayed was employed… Continue reading Truck Driver Not Entitled to Deduct Meal and Supply Expenses
Truck Driver Not Entitled to Deductions When Records Destroyed
In Clark v. Commissioner, T.C. Memo. 2007-172, the U.S. Tax Court held that a truck driver who did not file tax returns was not entitled to deduct expenses where his records were destroyed in a fire. Facts & Procedural History Mr. Clark was a truck driver. He was employed by Jimmy Harris Trucking, Inc., Vandy… Continue reading Truck Driver Not Entitled to Deductions When Records Destroyed