Discussion:2004 audit regarding writing off car 100% bus.
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Discussion Forum Index --> Consumer Questions --> 2004 audit regarding writing off car 100% bus.
NOTE - this is a discussion from 2006!
| 1 August 2006 | |
| I am being audited for 2004. What IRS is questioning is the write off of my vehicle purchase price used for 100% business on my Schedule C. They want to see a log showing mileage for the year. I kept the mileage on my tripometer and not on a daily log, as all my mileage was for business. I thought what I could do to establish a log is to use my bank statements with gas charges to verify my driving every weekend to another city (approx 100 miles each way) where I did a lot of my business that year. Does any one have any suggestions has to what is allowable for proof of mileage? Also, they are asking for receipts for all of my schedule C writeoffs. I could only come up with approximately 50% of them, as when I redo a clients loan, we sometimes shred the old file for storage purposes and take out what is needed for the next refinance. (Not to smart, I've learned). With only 50% of receipts, will this give IRS the ability to go back in years to recoup the same write offs that I'm short receipts. Help please! | |
| 1 August 2006 | |
| With regard to your lack of receipts - is it possible to use your bank statements for this as well? Do you have a separate bank account for your business? If you do, you should be able to get copies of cleared checks from which you can rebuild your expense totals - if you have done any kind of accounting, this should be easy. But if not, it could be very tedious work. Also, if you used credit cards, you might be able to provide evidence of these expenses as well by referencing credit card statements. Regarding your car, do you have a separate vehicle used for personal use? If so, that should make it easier to sustain the business auto write-offs. | |
| August 3, 2006 | |
| You might want to prepare an analysis of your expenses. For example, if you have some files that are intact, you can arrive at the estimated costs for the average loan. Then you would take total loan fee revenue times this average cost to come up with the amounts for those expenses. If you are doing basically the same type of loan refinancing each time, this should be acceptable.
One of my previous employers was audited. They only had one car for personal use. Since the owners kept inventory in their home and lived within two miles of shopping, the agent bought their story that about 80% of the car use was for the business. I agree with MST that if you have another car for personal use, it makes it a lot easier to substantiate business use. How about re-creating a log based on your appointment book? | |
| 3 August 2006 | |
| Hi sounds like you have some problems 1) you say you use the car 100% for business OK, no commute never took it to church or the grocery store? I had an agent tell me once not even God uses his car 100%. I suggest you get your log together form your calendar as to where and when you drove and then settle. As to your expenses marvelous you can only find 50% a true "cash" basis taxpayer. This agent will have a field day going back 3 years on you and probably have reason to assess an accuracy realted penalty. ps I like the tag name seems to suit your predicament. bye | |
| 3 August 2006 | |
| No doubt you're going to have to settle on something, but I wouldn't throw in the towel yet. You have plenty of options for presenting evidence that supports your deductions - assuming the evidence exists. If we're talking about big bucks here, and especially if the agent tries to hit you with an accuracy related penalty, plan on going to appeals. It all depends on how much detail you can dig up and how comfortable you are with what you've done. | |
Taxalmancer (talk|edits) said: | 28 January 2009 |
| Can you contact some of your suppliers and ask them for copies of invoices/statements going back to the audit period? It would take some phone calls on your part and effort on their part but it might help. | |
| 28 January 2009 | |
| You are responding to a post that is more than two and a half years old. | |
| 28 January 2009 | |
| Actually, it won't be two and a half years old until next Tuesday. Maybe we should have a cake for it...
How many people are now going to read this entire thread, as I did, without noticing the date? | |
| 28 January 2009 | |
| (AEMCPA, what happened is that someone had made a SPAM post, which brought the thread back to life. I've since deleted the SPAM post, but the thread comes up as a recent post question.) | |
Rgtaxservice (talk|edits) said: | 28 January 2009 |
| I fell into the trap. I caught the date after reading Wes' comment but by that time I was commited. | |
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