Posted on 10/12/2011 10:18:17 AM PDT by celticfreedom
Just received a letter from the IRS informing me that I am being audited on my 2009 return. They are looking into the amount of mileage I claimed (it was 18,000). I have already pulled all my assignments for that year and included the round trip mileage for each location, copied the part of my contract with the nursing agency I work for that states I am responsible for my own travel expenses and had the garage print out a list of all repairs and oil changes, etc...on my vehicle for that year, have tracked down my gas receipts...Is there anything else anyone can think of that I may need? I only want to have to do this ONE time! Thanks in advance for any and all advice.
—Is there anything else anyone can think of that I may need?—
Other than a cyanide capsule, I think you have it covered.
When I did it, I kept a mileage log of every single trip (and its purpose) in an excel spreadsheet and let it sum the miles. I use the 1040 short form now. :-D
I went through this last year.
Take your time getting all your paperwork together. No matter what they say, they need to give you the time.
Over document if possible.
Paying your tax man can be useful if your bill is high.
The last thing to do is blow them off.
Good luck!
ML/NJ
You mention mileage and expenses both. I did not think you could deduct repair expenses if you were reimbursed/claimed for mileage. However, the tax code is the one piece of accounting I never could seem to get a handle on.
Are you an independent contractor.....file on a Schedule C..or are you an employee who is reimbiursed for your mileage. If the latter, then you can’t take auto expenses off your return..
Independent.....I am not reimbursed for mileage or any other expenses.
Your records sound too good to be believed, LOL It should be OK. I just keep a dog-eared hand-written diary in the car for mileage and the service records and gas receipts in an envelope, which can always be cross-checked against my credit card trail. Maybe going to the short form set off the alarm
You need one more thing: a good tax attorney.
Ask your tax lawyer what you need.
“Other than a cyanide capsule, I think you have it covered.”
Would that be for me or the IRS agent?
Take only the documents that deal with the question. Don’t volunteer any other info. Be friendly.
—Maybe going to the short form set off the alarm—
Naw. I don’t make enough. And the mileage was for a band. I only did it two years. It was to show I was losing money. I don’t “lose money” any more so I’m sure they’re happy.
On a side note, can you imagine how simple it would be for most people to do their taxes if there was no mortgage interest deduction? In my case, my rate is so low that it’s not worth itemizing my deductions, even with the charitable contributions. The “standard” deduction is bigger.
—You either get to deduct a certain amount per mile, or your actual expenses (gas, tolls, repairs insurance, etc.), but not both.—
That is why I kept track of mileage only. I did my own repairs and had a VERY economical car for business trips.
I suspect that you probably claimed a very high % of total mileage for business use..they assume that most people have about 10-12k miles for personal use..IOW..if you drove 36k miles that year, 18,000 for business is normal..however, if you drove only 24,000 miles total, then 18k for business isn’t the norm, and the assumption is that you’re tinkering with the numbers..also..your comments are a tad confusing..either you claim the IRS allowed mileage rate, OR your actual expenses...you can’t do both...so all you need is your diary..showing the mileage..don’t even bother with gas receipts and repair costs...
—Your records sound too good to be believed—
To be frank, I just kept track of what days I went where and then used Google maps to calculate the mileage. Since there were only three or four destinations always from the same place, I just put in the same distance for all the relevant dates. Band rehearsals and gigs was what it amounted to. I claimed all gig income to justify it.
This was a few years ago. I like it simple now. Heck, I like all aspects of my life simple now. It’s worth money to keep it simple.
What you really need is a list of jobs and the mileage round trip to each job. If you can document hat and understated your mileage ask for a refund. That will frost them.
That is not correct. You can either:
1. deduct actual expenses (with certain restrictions, as summarized below); or,
2. use a mileage rate.
There are different mileage rates for business, charitable, medical, and moving expense purposes.
The business mileage rate includes depreciation (or lease payments), maintenance and repairs, tires, gasoline (including all taxes thereon), oil, insurance, and license and registration fees. Parking fees and tolls attributable to use of the automobile for business purposes may be deducted as separate items. Likewise, interest relating to the purchase of the automobile as well as state and local personal property taxes may be deducted as separate items, but only to the extent allowable under § 163 or § 164, respectively.
The charitable, medical, and moving expense mileage rates do not include depreciation (or lease payments), insurance, and license and registration fees. Parking fees and tolls attributable to the use of the automobile for charitable, medical, or moving expense purposes may be deducted as separate items.
You can take standard mileage charges or actual expenses, your choice. But you cannot take both. If you took both, then that’s why you were audited. You’ll have to correct your return and pay back taxes, interest and penalty charges.
—Take only the documents that deal with the question. Don’t volunteer any other info. Be friendly.—
This.
I actually went four years (after a very nasty divorce) with filing no return back around the turn of the century. I ended up paying an extra $900 a month for something like a year and a half when I got it all straightened out. The IRS was always very nice about things. One month I was unable to make the payment and I called them. They just shifted the whole schedule a month and that was it.
If you are nice, they tend to be nice.
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