Is a Contemporaneous Travel Log Required?
I wanted to talk about contemporaneous logs for travel expenses to substantiate travel expenses. Business travel is generally what we’re talking about here. This is an area that nobody likes. At least I don’t know any of my clients that like it. No one likes to keep a log book in their car to keep track of where they went and why they went there and what they did while they were there and how many miles that they drove, etc. No one likes that and yet it is required in order to substantiate the business use of a vehicle, so that’s the bad news. It’s still the requirement.
Recently there was a case where a tax payers travel expenses and vehicle miles were allowed by the court without a contemporaneous record. So there are occasions when that happens. This tax payer was in the logging business and traveled very frequently to the properties where he has trees and stays overnight there in the forest and he kind of just does this regularly like a lot of businesses. He has a regular routine, he does it all the time. He actually maintained a contemporaneous record of his travel, but that record was destroyed in a fire. Anyway, long story short the courts, even though the IRS disallowed his deduction on audit, the court didn’t like the IRS’s kind of unsympathetic methods and gave him his deductions based on the fact that he had a credible testimony based on the fact that he provided a summary to the court of his travel which he claimed was extracted from his contemporaneous record before it was destroyed based on the fact that he had a very predictable travel schedule. In other words, it wasn’t really hard to determine what kind of travel this tax payer actually did for business, so the court allowed it.
So there are cases out there where there are times you can get away with it. My recommendation is have a log book and then you don’t have to go through all of that. Of course if this tax payer had a contemporaneous log book, the IRS would’ve just allowed the deduction and he wouldn’t have had to go to court. It would’ve been easy and would’ve saved him a lot of money in attorneys fees and accounting fees.
It’s just better. Keep a log book.
There’s apps that you can use to do it. It’s just the best way to go. If your business ever gets audited there’s a pretty good chance that the IRS is going to look into your travel because most tax payers do not keep a contemporaneous log book and the IRS thinks it’s kind of an easy deduction to target.
I’m more than happy to talk to you more about it and give you some easy options to take care of that contemporaneous log book.
I can certainly help you with any audits that you’re dealing with. If you’re dealing with this issue on audit and you do not have contemporaneous records, the chances are high that I can at least get the IRS to give you some of your claimed travel expenses. You might not have all of them without that log book.