Professor Can't Use Mileage Log Created After-the-Fact:
Here's a story from a recent tax court case that should be a lesson for us all (Daniel-Berhe v. Comm'r, T.C. Summary 2013-33 (4/29/13)).
A professor, who taught at five different schools, could not deduct vehicle expenses related to traveling to the various schools because he did not adequately substantiate the remainder of his car and truck expenses. A mileage log created after the year at issue could not be used to substantiate his travel expenses. The mileage had to be entered at the time the vehicle was used, the court stated. In addition, the taxpayer provided no evidence to corroborate entries in the mileage log for random trips to the schools other than testimony that he made various trips to prepare for the semester. The court was unable to verify whether these trips were for business or were personal and thus denied the related expense deductions. However, the court concluded that the taxpayer had a genuine misunderstanding of the law and thus held that the taxpayer was not liable for the accuracy-related penalties. [Code Sec. 162].
The Code and Regulations clearly state that a contemporaneous log must be maintained for your mileage records, not one created a year after-the-fact. Here the court clearly upheld the letter of the IRS Regulations and denied the deduction for business travel expenses. Lesson learned!
Jeremiah K. Murphy, CPA is an accounting firm providing tax services, audits and business consulting.