Can the IRS audit mileage?

Good records help you prepare for an IRS Audit

You must keep excellent records. These help you run your business smoothly, make reliable forecasts and file accurate tax returns. Having the IRS audit your vehicle expenses is something you should expect. Do not be surprised when the IRS auditor asks you to prove your mileage.

Keep a mileage log

Anthony runs a computer business. He tells friends, “I started my business with a cell phone and a Honda Civic. I live El Dorado Hills but drive all over the place. I drive 18,000 miles a year and 2/3 of that is for work. I am awesome.”

One day, the IRS asks Anthony to prove the 18,000-mile claim. Anthony does not know what to do. He calls Dave Fechter, CPA, who helps him respond in a calm, patient and professional manner. Anthony and Dave work together and review his return. Dave tells Anthony what information he needs to compile. 

Yes, this is a lot of work. Anthony is claiming 18,000 miles of driving and 12,000 miles for work. With gas receipts, maintenance records and his Calendar, Anthony shows how he drove 18,000 miles. More importantly, he shows how 12,000 miles were for work.

He shares that info with Dave Fechter, CPA, who writes a polite response for the IRS Auditor. The IRS Auditor replies within two weeks. Anthony’s return is accepted as-is.

That is why you should respond letter in a calm, patient and professional manner. Dave Fechter, CPA, has another success story.

Your takeaway

When the IRS Audit computer selects your return, you must respond. Call a CPA who deals with the IRS regularly and can help you respond letter in a calm, patient and professional manner. An IRS audit can go well if you keep excellent records and have an experienced CPA on your side.

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