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Bob Parrish C PA. P.C.
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Truckers - Pilots - Mariners - Etc. Special
Provisions for Travel & Supplies |
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What proof is required to claim these rather expensive employee business expenses? The answer may surprise you, but almost none is required. A timely entry into your driver's log, flight logbook and/or duty logs is all that is necessary to establish your deduction. No further records are required per this I.R.S. Notice. Afraid of an I.R.S. Tax Audit? Do not be. Understand that a "Notice" (I.R.S. Notice) is published out of I.R.S.'s Washington D.C. headquarters and is expressly written to provide both I.R.S. Field/Office Auditors and the public with Nationwide Audit Guideline Procedures which I.R.S. personal must follow. An I.R.S. Auditor cannot deviate from a published Notice. If you believe you spend $75 in a week for travel, for any expense for traveling, entertainment, gifts, or listed property, then there is a deduction of $75 for 50 weeks (two weeks for vacation) which is $3,750. Furthermore, only the meals and entertainment are subject to the percentage reduction rules. (Note: lodging is excluded as the lodging must be documented with a paid bill.)
List of examples of travel:
SUBSTANTIATION REQUIREMENTS FOR TRAVEL AND ENTERTAINMENT EXPENSES IRS NOTICE 95-50 This notice provides information on a change that the Service will make to the substantiation rules in the regulations under section 274(d) of the Internal Revenue Code, and also invites public comment on possible additional changes to certain other substantiation rules under that section. Receipt threshold to increase from $25 to $75. Section 274(d) disallows an otherwise allowable deduction under sections 162 or 212 for any expense for traveling, entertainment, gifts, or listed property, unless the expense is substantiated by adequate records. Section 1.274-5T(c)(2)(iii) of the temporary Income Tax Regulations requires a taxpayer to maintain documentary evidence (such as receipts) for
The $25 receipt threshold was established in 1962. The Service will amend section 1.274-5T(c)(2)(iii)(B) to increase the $25 receipt threshold to $75, effective for expenditures incurred on or after October 1, 1995. Public comment invited. An employee who is reimbursed by his or her employer may substantiate expenses under the "adequate accounting" rules of section 1.274-5T(f). Under these rules, (1) the employee must furnish the employer with adequate records as provided in section 1.274-5T(c)(2), including documentary evidence (such as receipts), that establish each element (e.g., amount, time, place, and business purpose) of the expenditure, and (2) the employer must maintain the documentary evidence and produce it if requested by the Service. The Service is also reviewing section 1.274-5T(f) to determine whether changes should be made to the adequate accounting rules to provide alternative means of satisfying the substantiation requirements of section 274(d). The Service invites public comment on this matter. Written comments should be submitted by December 15, 1995, to:
All materials submitted will be available for public inspection and copying.
DRAFTING INFORMATION The principal author of this notice is Donna M. Crisalli of the Office of Assistant Chief Counsel (Income Tax and Accounting). For further information regarding this notice, contact Ms. Crisalli on (202) 622-4920 (not a toll-free number).
Engagement Status Letter ~ WARNING!
travel_truckers_pilots_mariners.htm |
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