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Taxpayers may use a standard mileage rate established by the
Internal Revenue Service in lieu of substantiating the actual
amount of the expenditure. See sec. 1.274-5(j)(2), Income Tax
Regs. The standard mileage rate is generally multiplied by the
number of business miles traveled. See Rev. Proc. 2002-61, 2002-
2 C.B. 616 (in effect for transportation expenses incurred during
2003). The use of the standard mileage rate establishes only the
amount deemed expended with respect to the business use of a
passenger automobile. Sec. 1.274-5(j)(2), Income Tax Regs. The
taxpayer must still establish the actual mileage, the time, and
the business purpose of each use. Nicely v. Commissioner, T.C.
Memo. 2006-172; sec. 1.274-5(j)(2), Income Tax Regs.
Petitioners introduced an appointment calendar for 2003 to
support their business mileage deductions. Mr. Soholt kept the
calendar in his car during 2003 and made handwritten notations of
the total mileage incurred on days when he had to travel for
business. Mr. Soholt calculated the mileage by determining the
difference on the odometer from the beginning of the day to the
end of the day. Mr. Soholt acknowledged, however, that the daily
odometer readings also possibly included non-business trips he
made during the day.
Although we recognize the efforts Mr. Soholt made to record
his daily mileage, we are constrained to find that petitioners
failed to satisfy the strict substantiation requirements.
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