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The Tax Court has recently emphasized that individuals who drive often or long distances for work should carefully collect evidence substantiating any mileage log prepared if individuals wish to take a mileage deduction. In a recent bench opinion in Brown v. Commissioner, the Tax Court determined that an accountant “had not offered sufficient evidence to satisfy the strict substantiation standard with respect to [the] mileage deduction.”

The petitioner had two sources of income in 2016. The first was $47,000 of unspecified earnings while $5,659 originated from Gomillion Tax Services where she prepared tax returns for her clients. The petitioner claimed $19,000 in vehicle expenses for the alleged 34,560 miles driven to meet with various clients throughout the year. The petitioner had a mileage log, but it failed to comply with the stringent guidelines of Internal Revenue Code § 274(d). While the log provided the dates, origin, mileage, and destination of every trip, it used the vague description of “business” for the reason for the trip. The log lacked any supporting specific information about each trip.  

The Tax Court reasoned that even though the Court did not doubt that the petitioner was hard at work, she “has not offered sufficient evidence to satisfy the strict substantiation standard with respect to her mileage deduction.” For example, the petitioner supplied no supporting evidence for the mileage log such as emails or calendar entries. The Tax Court added that the petitioner’s calculations could be based on the year’s beginning odometer reading and what it was at the end of the year. No accounting for miles driven in between the entries existed, and physically, it would have been impossible to travel 1,200 miles per day. In total, the petitioner had only a handful of clients that would require long-distance travel. The majority of the petitioner’s clients lived in the local area. The mileage log seemed doubtful without sufficient support to meet the strict substantiation burden of proof under I.R.C. § 274(d). In other words, the mileage log was not credible or properly supported.  

In sum, those planning to deduct their mileage should take extra steps to substantiate those miles, or in the least, provide a detailed log that other extraneous evidence can corroborate. With more revenue agents working remotely online, and the number of audits expected to increase, we anticipate seeing this issue travel to the top of compliance audits.  No harm will come by going the extra “mile.”