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contemporaneous record. Sec. 1.274-5T(c)(1), Temporary Income
Tax Regs., supra.
Automobile Expenses
Petitioners failed to provide any records relating to their
automobile expenses for the pallet business either during the
examination or during the reconsideration of the original
examination for 2004. The TCO testified that during the
reconsideration of the original examination, Mr. Runels advised
her that he did not have a vehicle log. He was asked to provide
something that would show odometer readings for the years under
consideration. Petitioners provided no additional documentation
to substantiate business mileage. The TCO testified that “we
retraced what he was doing” and she allowed an amount that she
estimated was the appropriate business use. The TCO testified
that she took the mileage that Mr. Runels traveled for his job,
adjusted for nondeductible commuting mileage, and added an amount
for pickup and dropoff of his pallets. The TCO estimated his
business mileage and based depreciation on her estimate of
business use.
In the “Corrected Report”, issued as a result of the
reconsideration of petitioners’ 2004 return, the TCO determined
the business use of petitioners’ truck to be 29 percent. She
reduced the original adjustment to reflect that use. Petitioners
acquired the truck in July of 2003, when the truck was placed in
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