Hi all,
It seems that there is a problem with the approximate 15% personal use of a cargo van if you do not keep accurate records for that personal use,
That use is considered for shopping for food stock up, clothes, movies, or any entertainment that you chose to do on the road,
The actual law states that you really cannot use the standard mileage rate due to the fact that you are considered '' FOR HIRE" ACCORDING TO THE IRS and must use the actual expenses that you incur while on the road.
If you are in a Sprinter, or any other GVW vehicle it must be under 10,000 GVW in order to that the standard Rate. in the Ohio Valley area (Cincinnati and Chicago IRS office were disallowing the standard mileage rate use in our businesses due to the "FOR HIRE" DESIGNATION. If your lease contract states that the company has exclusive use
phrased out , then you are not "FOR HIRE" to anyone else for loads.
Your company weather it be, FEDEX, Panther, CTX, Tri-state, Express 1, Try Hours, etc, the loads that they give to you are theirs, They own the load until it delivered. and they are billing the shipper for the load.
even though you are an independent contractor leased to them.
There is a Chief Council Memo, that was never updated that was issued in 1997 in reference to the standard mileage rate and its use, it was CCM 1997-40, I do have a Copy if you need it. If they are deciding to disallow the standard rate. and I do not know if they would honor now 12 years later. You would need a full copy of that memo, to take with you to the audit.
If you have any questions please do not hesitate to ask!
Franklin Katz, ATP ,PA, PB
Frank’s Tax and Business Service
120 York Rd
Kings Mountain, NC 28086-3151
(704) 739-4039
Fax: (704) 739-3934
Providing Professional Accounting Services and Income Tax Preparation
Circular 230 Disclaimer – Any tax advice in this communication (including any attachments) is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of (1) avoiding tax related penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any transaction or tax-related matters addressed herein.