Tax Update Blog: Permalink

« Previous · Tax Update Blog Home · Next »

PLAY "GUESS HOW THE CASE CAME OUT"

May 03, 2005

Today we challenge you to guess the winner of a tax case by reading a revealing passage from the "findings of fact." Answer in the extended entry. This one should be easy. Go!

Petitioner claimed $15,7411 of automobile expenses as unreimbursed employee business expenses for 2000. He testified that he daily maintained a mileage log by recording the odometer reading for each sales call on the day that he made the sales call, then transferred this information into a spreadsheet on his personal computer because, as he testified, he wanted to have a "more efficient paperless office." Petitioner maintained no other paper records for the business use of his automobile. The mileage log contained entries that were inconsistent with and in fact contradicted other evidence before the Court. For example, there were numerous entries on the same day on both the flight log and the mileage log that showed times and distances traveled that could not have taken place on the same day.

Ready?

Decision for IRS. In the opinion, the Court said:

First, we are skeptical of the number of miles, almost 50,000 in 1 year, that petitioner asserts were solely business related. This car mileage, we note, is in addition to miles petitioner flew on his private airplane. We also find numerous inconsistencies between the spreadsheet and other evidence before the Court. For example, petitioner apparently drove to a location on the same day he claimed to have flown there, and he claimed extensive mileage on days that he was involved in flight training for his private airplane.

Moral: If you fly somewhere, don't turn around and drive there the same day.

Cite: Barton v. Commissioner, T.C. Memo 2005-97.

      Bookmark: del.icio.us • Digg • reddit