Audit Response Letter & IDR Templates

You opened the envelope. There is a Form 4564 in your hands, an examiner’s name at the top, and a list of documents the IRS wants in 30 days. Your Schedule C mileage deduction is on the list. Your stomach drops.

Take a breath. Most self-employed mileage examinations are not catastrophes. They are paperwork problems with a strict legal standard called IRC §274(d) sitting underneath them. If you have contemporaneous records, you can win. If you do not, you can still limit the damage. Either way, the response goes out on letterhead, organized, professional, and on time.

This is the operational companion to our Mileage Audit Defense Playbook. The Playbook walks you through the law. This article hands you the templates: the initial IDR response letter, the §6662 accuracy-penalty abatement letter, Form 12203 to request Appeals review, and Form 911 to call in the Taxpayer Advocate Service. Each template is followed by usage notes so you do not fill in the wrong field or miss the wrong deadline.

Key takeaways

• You usually have 30 days to respond to a Form 4564 Information Document Request. For correspondence audits, the IRS website states: “We can ordinarily grant you a one-time automatic 30-day extension” — but you must fax or mail the request to the number on the letter before the original deadline.
• §274(d) requires four elements for every business trip: amount (miles), time (date), place (destination), and business purpose. The Cohan rule does not save you here — the Tax Court reaffirmed this in Sanford v. Commissioner, 50 T.C. 823 (1968), and every §274(d) case since.
• Contemporaneous GPS-tracked logs win. In Patitz v. Commissioner, T.C. Memo. 2022-99, the Tax Court accepted electronic mileage records as adequate substantiation; the Eleventh Circuit affirmed in an unpublished per curiam opinion (No. 23-12440, Apr. 23, 2025). In Velez v. Commissioner, T.C. Memo. 2018-46, reconstructed logs created two days before trial failed and the 20% §6662 penalty was sustained.
• The §6662 penalty is negotiable. Under §6664(c) and Treas. Reg. §1.6664-4, a good-faith taxpayer who relied on contemporaneous records and a professional preparer has a real reasonable-cause defense — and Appeals officers settle penalties on the merits and the hazards of litigation.
• You have escalation paths. Form 12203 takes you to Appeals if the examination report is wrong; Form 911 brings in TAS if you are suffering financial hardship or the IRS has gone silent; a 90-day letter is your ticket to U.S. Tax Court for a $60 filing fee.

What an IDR actually is, and what is on the timeline

The IRS opens most self-employed mileage examinations one of three ways:

1. A correspondence audit opened with a Letter 566 or CP2000-style notice. This is by far the most common. A correspondence examiner — usually a Tax Compliance Officer in a service center — asks for documents by mail, fax, or the IRS document upload tool.
2. An office audit opened with a Letter 2202. You come to a local IRS office with documents in hand.
3. A field audit opened by a Revenue Agent who wants to visit your home or business. Rare for a small Schedule C.

In all three, the document request itself usually comes on Form 4564, Information Document Request (IDR). The IDR is a numbered list of items the examiner wants you to produce. Each line is a separate request. Form 4564 is not optional. If you ignore it, the next steps are a delinquency notice, a pre-summons letter, and ultimately an IRS summons — at which point the examiner can subpoena the records from third parties and propose to disallow your entire deduction.

What you will be asked for in a mileage case. The IDR will typically ask for some combination of:

• The Schedule C as filed
• Mileage logs for each business vehicle, by month or by year
• A breakdown of business miles, commuting miles, and personal miles
• Business purpose documentation for each trip (or a sample period)
• Vehicle title, registration, and any lease documents
• Receipts for actual expenses if you elected the actual-expense method
• 1099-NEC, 1099-K, and other income reconciliation
• Bank statements showing income deposits
• Photos of your odometer at the beginning and end of the year (yes, examiners ask for this)

The clock. Per the IRS’s published guidance for individual audits, you generally have 30 days from the date on the letter to respond. The IRS website states explicitly: “We can ordinarily grant you a one-time automatic 30-day extension. We will contact you if we are unable to grant your extension request.” After that, extensions become harder. For large-business (LB&I) cases the timeline is governed by the more granular IRM 4.46.4 enforcement process — but for typical self-employed Schedule C examinations, the 30-day correspondence-audit framework controls.

The four dispositions. When the examiner finishes reviewing your response, you will get one of four outcomes: full allowance (“no-change”), partial allowance, full disallowance, or full/partial disallowance plus a §6662 accuracy-related penalty. Each one has a different next move, and the templates below cover all of them.

The single most useful thing you can do in the first 72 hours is calendar the deadline, secure your electronic records, and create an audit folder — physical, digital, or both. Everything you send and receive goes in that folder, in date order, with a copy.

Template 1 — Initial IDR response letter

Send this to the examiner with your evidence attached. Use it for the first formal response to a Form 4564 in a self-employed mileage examination. Fill in the bracketed fields with your specifics, then hit the Copy button to drop the plain-text version onto a clipboard for pasting into Word or Google Docs.

How to use Template 1 — usage notes:

• Send by certified mail with return receipt requested (USPS Form 3811) OR by IRS-approved fax to the number on the examiner’s letter. For correspondence audits, the IRS now also accepts uploads via the Document Upload Tool at irs.gov/reply. Confirm with your examiner which channel they prefer; keep proof of delivery either way.
• Never send originals. Send clean, legible copies. Number every page in the lower right corner. Reference numbered pages by Exhibit and page number in the letter body.
• Include a cover page listing every exhibit. Examiners review dozens of cases at a time; a clean index gets your file resolved faster.
• Redact what you can. Black out non-relevant personal transactions in bank statements, account numbers on receipts you do not need to disclose, and SSNs of others (e.g., children) appearing on documents. Leave your own SSN visible only on the cover page where the IRS expects it.
• Tone matters. The letter is professional and confident, not defensive or apologetic. You are documenting compliance, not seeking forgiveness. The Tax Court’s standard under §7491 lets the burden of proof shift to the IRS if you have kept the required records and cooperated with reasonable requests — your letter is the cooperation step.
• Keep an identical copy. Everything you send goes in your audit folder. If the IRS later claims it never received an exhibit, you can resend on 24 hours’ notice.

Template 2 — §6662 accuracy-related penalty abatement letter

Use this letter when the examiner proposes a §6662 accuracy-related penalty in addition to (or instead of) the underlying tax adjustment. You can send it alongside Template 1, or as a follow-up after you receive a 30-day letter (Letter 525) attaching a Form 4549 examination report that proposes the penalty.

The §6662 penalty is 20% of the underpayment attributable to negligence, disregard of rules and regulations, or substantial understatement of income tax (greater of 10% of correct tax or $5,000). It is not automatic, and the IRS bears the burden of production under §7491(c) — including written supervisory approval under §6751(b)(1). Reasonable cause under §6664(c) is a complete defense if you can show it.

How to use Template 2 — usage notes:

• Lead with the law, then the facts. Examiners and Appeals officers are trained to look for the §6664(c) elements. State them explicitly.
• Name your preparer. Reliance on a professional tax adviser is one of the strongest reasonable-cause arguments, and the regulations under Treas. Reg. §1.6664-4(c) describe what reliance must look like (full disclosure of facts, qualified adviser, no unreasonable assumptions).
• Quote Patitz. Distinguish Velez, Royster, Simmons. Appeals officers read cases. Showing them the parallels and the distinctions is what frames the “hazards of litigation” analysis in your favor.
• Request §6751(b) documentation in writing. Penalties can be invalidated for lack of timely written supervisory approval. The Tax Court has invalidated penalties on this ground repeatedly.
• Do not bundle and do not trade. Per IRM 8.11.1, Appeals “will not concede penalty issues to obtain a concession on other issues.” Treat the penalty as its own argument on its own merits.

Template 3 — Form 12203 request for Appeals review

If the examination report (Form 4549 attached to a Letter 525 or Letter 915) rejects your position, you have 30 days from the date of the letter to request an Appeals review. Use Form 12203, Request for Appeals Review (Rev. 8-2022) if the proposed adjustment is $25,000 or less per tax year. Above that threshold you need a formal written protest under Publication 5.

The Independent Office of Appeals is, by statute (IRC §7803(e)), separate from the examination function. Appeals officers have settlement authority that examiners do not, and they are instructed by IRM 8.6.4 to weigh the hazards of litigation — the probable outcome if the case went to U.S. Tax Court.

Per the Taxpayer Advocate Service’s FY 2024 Annual Report to Congress, 17,659 Tax Court cases were settled in FY 2024 — 11,720 by Appeals and 5,939 by Chief Counsel, with 75.8% of all Tax Court cases closed by settlement before trial. The leverage is real if you bring a strong record.

How to use Template 3 — usage notes:

• Mail it to the address on your 30-day letter, not directly to Appeals. Per IRS guidance, the examination office that issued the letter must receive the request first and forward the file to Appeals.
• Watch the dollar threshold. Form 12203 is for $25,000 or less per tax year. Over that, you need a formal written protest with a more detailed legal argument — but the substance is the same.
• Pick your conference modality deliberately. Telephone is fastest. Video (Microsoft Teams via the IRS platform) gives you the human-presence element without travel. In-person is now rare for individual examinations and not always available.
• Appeals is a reset, not a continuation. A new officer with settlement authority reads the file fresh. Do not assume the examiner’s reasoning will carry forward. Re-argue the case cleanly.
• Most penalty disputes resolve at Appeals. Per IRM 8.11.1, “Penalties may be settled based on hazards of litigation.” A strong reasonable-cause file plus an officer’s hazards analysis is often the difference between a full penalty and zero.
• You can still bring a representative (CPA, EA, or attorney) — file Form 2848 Power of Attorney.

Template 4 — Form 911 Taxpayer Advocate Service request

The Taxpayer Advocate Service (TAS) is an independent organization within the IRS, established by IRC §7803(c). TAS is your move when (1) you are suffering financial hardship from the proposed adjustment or an IRS collection action, (2) the IRS has gone silent for 30+ days past a stated response deadline, or (3) an IRS process is failing systemically. TAS will not substitute for an Appeal — but it can break a logjam, expedite review, or stop a levy that is about to land.

The current form is Form 911 (Rev. 8-2025), and TAS accepts submissions by fax to your local office, by mail, or by email to TAS.Form.911.Request.for.Assistance@irs.gov (unencrypted — TAS will reply by phone or letter, not email). The national TAS line is 1-877-777-4778.

How to use Template 4 — usage notes:

• TAS is not a substitute for appeal. File your Form 12203 or written protest on the underlying merits. Use Form 911 in parallel to address hardship or non-response.
• Find your local TAS office. TAS has at least one office in every state. The directory is at taxpayeradvocate.irs.gov/contact-us. Each office has a fax number and a mailing address. For overseas taxpayers, fax to (304) 707-9793.
• Be specific about the hardship. TAS prioritizes cases with documented economic harm. “I’m stressed” is not enough; “the proposed levy on my checking account on [date] will leave me unable to pay rent on [date]” is.
• Expect a Case Advocate. A TAS Case Advocate will be assigned to your case and will work it through to resolution. You will get a name and a direct phone line.
• Avoid duplicate filings. TAS specifically asks taxpayers not to file multiple Forms 911. One per issue.
• Frivolous requests are penalized $5,000 under §6702(b). This is not relevant for a normal hardship case; it exists to deter abusive filings.

The §274(d) mechanics in depth

Now that you have the templates, here is the legal framework underneath them. Understanding §274(d) is what lets you adapt the language to your specific facts.

The statute. IRC §274(d) provides that “[n]o deduction or credit shall be allowed” for traveling expenses (including local transportation), entertainment, gifts, or expenses with respect to listed property under §280F(d)(4) — which includes passenger automobiles — “unless the taxpayer substantiates by adequate records or by sufficient evidence corroborating the taxpayer’s own statement” four required elements.

The four elements. Per Treas. Reg. §1.274-5T(b)(6), for listed property, you must substantiate:

1. Amount of each separate expenditure (or each business use — i.e., mileage)
2. Time of each expenditure or use
3. Place where used or destination
4. Business purpose (and business relationship where applicable)

Miss any one and the deduction fails for that trip.

“Adequate records” vs. “sufficient evidence.” Treas. Reg. §1.274-5T(c) provides two paths:

• Adequate records (the higher path): an account book, diary, log, statement of expense, trip sheet, or similar record, made “at or near the time of the expenditure or use,” together with documentary evidence. This is what contemporaneous GPS apps produce.
• Sufficient evidence corroborating the taxpayer’s own statement (the harder path): a written or oral statement from the taxpayer plus other corroborating evidence. The regulation explicitly warns that “the corroborative evidence required to support a statement not made at or near the time of the expenditure or use must have a high degree of probative value.”

“Contemporaneous” is the magic word. Treas. Reg. §1.274-5T(c)(2)(ii)(A) makes the standard clear: records made “at or near the time of the expenditure or use” have “a high degree of credibility” that records made later do not. A GPS-tracking app that timestamps each trip at the moment it happens is exactly the kind of record the regulation rewards.

The Cohan rule does not save you. Under Cohan v. Commissioner, 39 F.2d 540, 543–44 (2d Cir. 1930), the Tax Court can sometimes estimate a deduction “bearing heavily” against the taxpayer. But for §274(d) expenses, the Tax Court is barred from using Cohan. Sanford v. Commissioner, 50 T.C. 823, 827–28 (1968), held this directly, and the Tax Court has reaffirmed it in dozens of subsequent cases, including DeLima v. Commissioner, T.C. Memo. 2012-291, and Hoakison v. Commissioner, T.C. Memo. 2022-117 (“the Court may not use the Cohan doctrine to estimate expenses covered by section 274(d)”).

Burden of proof under §7491. The general rule is that the IRS’s determination of deficiency is presumed correct and the taxpayer bears the burden of proving it wrong (Tax Court Rule 142(a)). Under §7491(a), the burden shifts to the IRS only if the taxpayer (1) introduces credible evidence, (2) has complied with all substantiation requirements, (3) has maintained all records required, and (4) has cooperated with reasonable requests for information. Contemporaneous GPS records, sent timely with a clean response letter, satisfy all four.

§6001 record retention. Independent of §274(d), every taxpayer must keep books and records sufficient to establish income and deductions (IRC §6001; Treas. Reg. §1.6001-1). The IRS recommends keeping vehicle expense records for at least three years after the return is filed; six years if income was substantially under-reported; indefinitely if no return was filed.

What the verified Tax Court record actually shows.

• Wins on contemporaneous electronic logs: Patitz v. Commissioner, T.C. Memo. 2022-99, aff’d, No. 23-12440 (11th Cir. Apr. 23, 2025).
• Wins on partial substantiation under §274(d): Hoakison v. Commissioner, T.C. Memo. 2022-117 (qualified nonpersonal use vehicles).
• Losses on reconstructed logs: Velez v. Commissioner, T.C. Memo. 2018-46. Logs created “two days before trial” failed; the 20% accuracy-related penalty of $3,948 was sustained.
• Losses on odometer-only records: Royster v. Commissioner, T.C. Memo. 2010-16. Logs that “contained entries for only the beginning and ending odometer reading of the vehicle each day” failed for lack of business purpose.
• Losses on QuickBooks aggregations: Simmons v. Commissioner, T.C. Memo. 2026-34. The Tax Court rejected three pages of QuickBooks transactions because the entries “suffered from a ‘dearth of information that would allow us to evaluate the nature of the alleged expenses or their business purposes.’”
• Losses on log lacking business purpose: Garza v. Commissioner, T.C. Memo. 2014-121.
• Losses on §179 vehicle for §274(d) failure: Ottuso v. Commissioner, T.C. Memo. 2024-91.

The pattern is clean: contemporaneous, GPS-backed, per-trip records win. Reconstructed, aggregated, or odometer-only records lose. Your job in the response letter is to demonstrate which side of the line your records are on — and to do it by referencing the verified cases by name.

§6662 penalty mechanics and the real defenses

§6662 imposes a 20% accuracy-related penalty (40% in cases of gross valuation misstatement, rarely relevant for mileage) on any portion of an underpayment attributable to one or more of the bases in §6662(b). The two most common in mileage cases:

• §6662(b)(1) negligence or disregard of rules and regulations. Treas. Reg. §1.6662-3 defines negligence as “any failure to make a reasonable attempt to comply with the provisions of the internal revenue laws or to exercise ordinary and reasonable care in the preparation of a tax return,” and specifically includes “any failure by the taxpayer to keep adequate books and records or to substantiate items properly.”
• §6662(b)(2) substantial understatement of income tax. Applies when the understatement exceeds the greater of 10% of the tax required to be shown on the return, or $5,000 (Treas. Reg. §1.6662-4(b)).

The defenses.

1. Reasonable basis safe harbor — §6662(d)(2)(B)(i). For substantial-understatement cases, the penalty is reduced for any item with “substantial authority” for its treatment, or “reasonable basis” with adequate disclosure. A position grounded in §274(d), Treas. Reg. §1.274-5T, IRS Publication 463, and Patitz easily clears this bar.

2. Reasonable cause and good faith — §6664(c). A complete defense. Treas. Reg. §1.6664-4(b)(1): “[t]he most important factor is the extent of the taxpayer’s effort to assess the proper tax liability.” What earns reasonable cause, on the verified Tax Court record: contemporaneous GPS-backed records; reliance on a competent tax preparer (Neonatology Associates, P.A. v. Commissioner, 115 T.C. 43, 99 (2000); Hoakison); reliance on IRS publications; demonstrated effort to track and substantiate.

3. §6751(b)(1) written supervisory approval. The IRS must show that the immediate supervisor of the examiner approved the penalty determination in writing before assessment. This is a procedural requirement that has invalidated penalties in many cases. Always reserve this argument and request the §6751(b) approval document from the examination file.

What loses, on the verified record:

• Reconstructed logs created in anticipation of audit (Velez).
• Odometer-only records with no per-trip business purpose (Royster).
• Aggregated bookkeeping entries with no per-trip detail (Simmons).
• Logs created after the audit notice.
• “Estimated” mileage with no contemporaneous record.

The lesson for an audit defense letter: on the verified Tax Court record, contemporaneous GPS-tracked mileage with per-trip business purpose tagging is substantially better evidence than what most taxpayers who lost had. Your reasonable-cause and reasonable-basis arguments should reflect that confidence.

Appeals strategy and the hazards of litigation

The Independent Office of Appeals is structurally separate from examination under IRC §7803(e). Appeals officers have settlement authority that examiners do not.

The hazards of litigation standard. Per IRM 8.6.4 and the Office of Appeals’ published materials, Appeals officers settle cases by evaluating “the probable result in the event of litigation.” Per IRM 8.11.1, “Penalties may be settled based on hazards of litigation. Unlike Compliance, Appeals may consider the hazards of litigation in attempting to reach a settlement.” If your record would likely produce a partial or full taxpayer win in Tax Court, the Appeals officer is supposed to settle in that range.

The numbers tell the story. Per the Taxpayer Advocate Service’s FY 2024 Annual Report to Congress, 17,659 Tax Court cases were settled in FY 2024 — 11,720 by Appeals (about two-thirds) and 5,939 by Chief Counsel before trial. 75.8% of Tax Court cases were closed by settlement and a very small share went to trial. Most disputes resolve before a judge ever looks at them.

Strategy at Appeals.

• Lead with the case law parallels. Quote Patitz by name; quote Hoakison on reasonable cause; quote Sanford on the Cohan bar.
• Quantify the hazards. If you went to Tax Court, what is the realistic outcome? Full allowance? Partial allowance under Hoakison? If your records are clean, the Appeals officer’s hazards analysis points toward a substantial concession.
• Propose a specific settlement. “Full allowance of the mileage deduction; full abatement of the §6662 penalty” is a clean ask. If you have partial-substantiation weaknesses (e.g., a few months of incomplete records), propose a partial allowance corresponding to the substantiated period.
• Use time as leverage. Appeals officers carry inventory and have closure incentives. A taxpayer who is organized, responsive, and reasonable is easier to close than one who is not — and gets better outcomes.

The 30-day letter vs. the 90-day letter.

• 30-day letter (Letter 525 or Letter 915). Triggers your 30-day window to file Form 12203 or a written protest with Appeals.
• 90-day letter (Statutory Notice of Deficiency, Letter 3219 or Letter 531). Triggers a 90-day window (150 days if you are outside the United States) to file a petition with the U.S. Tax Court. The 90-day deadline is jurisdictional — you cannot get an extension. Per the Tax Court and TAS, the filing fee is $60. Small case procedures (amounts in dispute of $50,000 or less per year) apply under §7463 and provide informal procedures; the trade-off is that small case decisions cannot be appealed.

The 30-day operational checklist

The first month of an examination determines the next year. Here is the day-by-day:

Days 1–3: Stabilize.

• Read the letter carefully. Identify: (a) the exact deadline, (b) the examiner’s name, employee ID, phone, fax, (c) the items requested, (d) the tax year(s) under examination.
• Calendar the deadline. Set a reminder 10 days, 5 days, and 2 days before.
• Open an audit folder. Physical, digital, or both — but one canonical location.
• Pull your EveryLastMile annual export, your bank statements, your Schedule C as filed, your 1099-NEC/1099-K forms, your vehicle title/registration.
• Do not call the examiner to “explain” anything. Communicate in writing.

Days 4–7: Reconcile.

• Compare your mileage log totals to what you reported on Schedule C (Line 9 and Line 44a-c). Note any discrepancies — small differences (a few hundred miles) are normal; large ones need explanation.
• Reconcile gross receipts to 1099-NEC + 1099-K + cash deposits.
• Identify any items the IRS asked for that you cannot produce (e.g., a year-end odometer photo you did not take). Plan how to substitute — service-record odometer reads, oil-change receipts, contemporaneous insurance odometer updates.

Days 8–14: Draft the response.

• Use Template 1 as your skeleton.
• Assemble exhibits in the order the IDR lists items.
• Number every page. Build the exhibit index cover page.
• If you have a CPA or EA, send them the draft for review.

Days 15–21: Send.

• Print, sign, scan a copy for your records.
• Mail via USPS Certified Mail with Return Receipt Requested. Save the tracking number and the green card.
• Or upload via the IRS Document Upload Tool (irs.gov/reply) if the letter offers that option. Save the confirmation.
• Or fax. Save the confirmation page.

Days 22–30: Watch and prepare.

• Calendar the IRS response date (typically 30–90 days after receipt).
• Prepare a contingent §6662 abatement letter using Template 2. If the examiner proposes a penalty in the report, you will already be drafted.
• If you anticipate the response will be late or the examiner has gone silent, draft Form 911 for hardship.
• If you will need more time, fax a one-page extension request to the examiner before the deadline. Per the IRS website, “We can ordinarily grant you a one-time automatic 30-day extension” on correspondence audits.

Day 30+: Outcome.

• No-change letter. You are done. File the letter. Keep your records for at least three years from the date the return was filed.
• 30-day letter (Letter 525) with examination report. You have 30 days to file Form 12203 or a written protest. Use Template 3.
• 90-day letter (Letter 3219). You have 90 days to petition U.S. Tax Court (or 150 days if abroad). This is jurisdictional and cannot be extended. Consider engaging counsel.

How EveryLastMile helps, before and during an audit

The reason §274(d) cases turn on the same arguments over and over is that the regulation rewards a very specific kind of record — contemporaneous, per-trip, four-element — and most people do not generate that record by hand. Automatic GPS tracking does, automatically, in the background.

Before audit:

• Automatic GPS tracking captures the date, time, distance, origin, and destination of every trip in real time, satisfying Treas. Reg. §1.274-5T(c)(2)(ii)(A)‘s “at or near the time of the expenditure or use” standard.
• Per-trip business purpose tagging lets you mark each trip’s purpose at or near the time of the trip — the element Royster, Garza, and Simmons taxpayers lacked.
• Vehicle-specific tagging by VIN matches each trip to the right vehicle on Schedule C Part IV and Form 4562 Part V Section B.
• Annual mileage summary with monthly breakouts mirrors the format the IRS asks for in IDRs.

During audit:

• Audit defense bundle export produces the trip ledger, monthly summaries, and annual reconciliation in PDF (for human review) and CSV (for IRS scanning).
• Time-stamped records demonstrate contemporaneousness on the file itself, not just by assertion.
• Cloud backup preserves records if your phone is replaced or your paper records are damaged — the Patitz-style scenario, where Hurricane Matthew destroyed the taxpayers’ paper records but contemporaneous electronic records remained.

Frequently asked questions

How long do I have to respond to a Form 4564 Information Document Request?

Typically 30 days from the date of the letter. The IRS website states: "We can ordinarily grant you a one-time automatic 30-day extension" if you fax or mail a written request to the number on the letter before the original deadline.

Can I send my IDR response by email?

Some examiners allow upload via the IRS Document Upload Tool (irs.gov/reply) or secure email. Confirm with the examiner. Certified mail with return receipt requested is the safest universal option.

What four elements must a mileage log show?

Under Treas. Reg. §1.274-5T(b)(6): (1) amount/mileage, (2) time/date, (3) place/destination, (4) business purpose. Each element must appear for each trip — or each business use.

Does the Cohan rule let me estimate mileage I did not track?

No. Sanford v. Commissioner, 50 T.C. 823, 827–28 (1968), and every §274(d) case since (including Hoakison v. Commissioner, T.C. Memo. 2022-117) hold that the Cohan rule does not apply to §274(d) expenses. The Tax Court "may not use the Cohan doctrine to estimate expenses covered by section 274(d)."

Will an automatic GPS app like EveryLastMile satisfy the IRS?

The Tax Court accepted electronic mileage records as adequate contemporaneous substantiation in Patitz v. Commissioner, T.C. Memo. 2022-99, affirmed by the Eleventh Circuit in No. 23-12440 (Apr. 23, 2025). Automatic GPS tracking with per-trip business purpose tagging meets the "adequate records" standard of Treas. Reg. §1.274-5T(c)(2)(ii)(A).

What is the §6662 accuracy-related penalty?

A 20% penalty on the portion of an underpayment attributable to negligence, disregard of rules and regulations, or substantial understatement. Substantial understatement means an understatement greater than the greater of 10% of the correct tax or $5,000.

How do I get the §6662 penalty abated?

Invoke the reasonable cause and good faith defense under IRC §6664(c) and Treas. Reg. §1.6664-4. The most important factor is "the extent of the taxpayer's effort to assess the proper tax liability." Contemporaneous records, reliance on a competent preparer (per Neonatology Associates and Hoakison), and good-faith effort all support abatement.

What is the difference between a 30-day letter and a 90-day letter?

A 30-day letter (Letter 525 or 915) gives you 30 days to file an Appeals request. A 90-day letter (Letter 3219, the Statutory Notice of Deficiency) gives you 90 days to petition the U.S. Tax Court — the only court where you can dispute the tax without first paying it.

Can I appeal an examination report without a lawyer?

Yes. Form 12203 is designed for taxpayers to use on their own, for adjustments of $25,000 or less per year. Above that, you need a formal written protest. You can also bring a CPA, EA, or attorney via Form 2848 Power of Attorney.

What does it cost to file a U.S. Tax Court petition?

$60. Small case procedures are available under IRC §7463 for disputes of $50,000 or less per year (informal, no appeal). E-filing is available through the Tax Court's DAWSON system.

What is the Taxpayer Advocate Service and when should I use it?

TAS is an independent organization within the IRS, established under IRC §7803(c). Use Form 911 when you are suffering financial hardship from an IRS action, when the IRS has gone silent for 30+ days, or when an IRS process is failing systemically.

Will the IRS accept odometer-only records?

No. Royster v. Commissioner, T.C. Memo. 2010-16, denied a deduction where the taxpayer's logs "contained entries for only the beginning and ending odometer reading of the vehicle each day." Per-trip business purpose is required.

Are QuickBooks vehicle entries enough?

Not by themselves. Simmons v. Commissioner, T.C. Memo. 2026-34, rejected QuickBooks entries that recorded only date, amount, and payee with general categories like "gasoline" or "Uber" because they suffered from a "dearth of information that would allow us to evaluate the nature of the alleged expenses or their business purposes."

What happens if I reconstruct a mileage log after the audit starts?

Reconstructed logs created in anticipation of audit are routinely rejected and often trigger the §6662 penalty. Velez v. Commissioner, T.C. Memo. 2018-46, sustained a 20% penalty of $3,948 where the taxpayer "created the reconstructed logs two days before the trial."

How long should I keep mileage records?

At least three years from the date the return was filed (the general §6501 statute of limitations); six years if income is substantially understated; indefinitely if no return was filed. We recommend seven years for self-employed drivers as a practical matter.