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IRS.gov Website
Publication 534
taxmap/pubs/p534-013.htm#en_us_publink100043728

What Records Must Be Kept(p12)

rule
You cannot take any depreciation or section 179 deduction for the use of listed property (including passenger automobiles) unless you can prove business/investment use with adequate records or sufficient evidence to support your own statements.
taxmap/pubs/p534-013.htm#en_us_publink100043729

How long to keep records.(p12)

rule
For listed property, records must be kept for as long as any excess depreciation can be recaptured (included in income).
taxmap/pubs/p534-013.htm#en_us_publink100043730

Adequate Records(p12)

rule
To meet the adequate records requirement, you must maintain an account book, diary, log, statement of expense, trip sheet, or similar record or other documentary evidence that, together with the receipt, is sufficient to establish each element of an expenditure or use. It is not necessary to record information in an account book, diary, or similar record if the information is already shown on the receipt. However, your records should back up your receipts in an orderly manner.
taxmap/pubs/p534-013.htm#en_us_publink100043731

Elements of Expenditure or Use(p12)

rule
The records or other documentary evidence must support:
  1. The amount of each separate expenditure, such as the cost of acquiring the item, maintenance and repair costs, capital improvement costs, lease payments, and any other expenses;
  2. The amount of each business and investment use (based on an appropriate measure, such as mileage for vehicles and time for other listed property), and the total use of the property for the tax year;
  3. The date of the expenditure or use; and
  4. The business or investment purpose for the expenditure or use.
Written documents of your expenditure or use are generally better evidence than oral statements alone. A written record prepared at or near the time of the expenditure or use has greater value as proof of the expenditure or use. A daily log is not required. However, some type of record containing the elements of an expenditure or the business or investment use of listed property made at or near the time and backed up by other documents is preferable to a statement prepared later.
taxmap/pubs/p534-013.htm#en_us_publink100043732

Timeliness(p12)

rule
The elements of an expenditure or use must be recorded at the time you have full knowledge of the elements. An expense account statement made from an account book, diary, or similar record prepared or maintained at or near the time of the expenditure or use is generally considered a timely record if in the regular course of business:
  1. The statement is submitted by an employee to the employer, or
  2. The statement is submitted by an independent contractor to the client or customer.
For example, a log maintained on a weekly basis, which accounts for use during the week, will be considered a record made at or near the time of use.
taxmap/pubs/p534-013.htm#en_us_publink100043733

Business Purpose Supported(p13)

rule
An adequate record of business purpose must generally be in the form of a written statement. However, the amount of backup necessary to establish a business purpose depends on the facts and circumstances of each case. A written explanation of the business purpose will not be required if the purpose can be determined from the surrounding facts and circumstances. For example, a salesperson visiting customers on an established sales route will not normally need a written explanation of the business purpose of his or her travel.
taxmap/pubs/p534-013.htm#en_us_publink100043734

Business Use Supported(p13)

rule
An adequate record contains enough information on each element of every business or investment use. The amount of detail required to support the use depends on the facts and circumstances. For example, a taxpayer whose only business use of a truck is to make customer deliveries on an established route can satisfy the requirement by recording the length of the route, including the total number of miles driven during the tax year and the date of each trip at or near the time of the trips.
Although an adequate record generally must be written, a record of the business use of listed property, such as a computer or automobile, can be prepared in a computer memory device using a logging program.
taxmap/pubs/p534-013.htm#en_us_publink100043735

Separate or Combined Expenditures or Uses(p13)

rule
Each use by you is normally considered a separate use. However, repeated uses can be combined as a single item.
Each expenditure is recorded as a separate item and not combined with other expenditures. If you choose, however, amounts spent for the use of listed property during a tax year, such as for gasoline or automobile repairs, can be combined. If these expenses are combined, you do not need to support the business purpose of each expense. Instead, you can divide the expenses based on the total business use of the listed property.
Uses which can be considered part of a single use, such as a round trip or uninterrupted business use, can be accounted for by a single record. For example, use of a truck to make deliveries at several locations which begin and end at the business premises and can include a stop at the business in between deliveries can be accounted for by a single record of miles driven. Use of a passenger automobile by a salesperson for a business trip away from home over a period of time can be accounted for by a single record of miles traveled. Minimal personal use (such as a stop for lunch between two business stops) is not an interruption of business use.
taxmap/pubs/p534-013.htm#en_us_publink100043736

Confidential Information(p13)

rule
If any of the information on the elements of an expenditure or use is confidential, it does not need to be in the account book or similar record if it is recorded at or near the time of the expenditure or use. It must be kept elsewhere and made available as support to the district director on request.
taxmap/pubs/p534-013.htm#en_us_publink100043737

Substantial Compliance(p13)

rule
If you have not fully supported a particular element of an expenditure or use, but have complied with the adequate records requirement for the expenditure or use to the district director's satisfaction, you can establish this element by any evidence the district director deems adequate.
If you fail to establish that you have substantially complied with the adequate records requirement for an element of an expenditure or use to the district director's satisfaction, you must establish the element:
  1. By your own oral or written statement containing detailed information as to the element, and
  2. By other evidence sufficient to establish the element.
If the element is the cost or amount, time, place, or date of an expenditure or use, its supporting evidence must be direct, such as oral testimony by witnesses or a written statement setting forth detailed information about the element or the documentary evidence. If the element is the business purpose of an expenditure, its supporting evidence can be circumstantial evidence.
taxmap/pubs/p534-013.htm#en_us_publink100043738

Sampling(p13)

rule
You can maintain an adequate record for portions of a tax year and use that record to support your business and investment use for the entire tax year if it can be shown by other evidence that the periods for which an adequate record is maintained are representative of use throughout the year.
taxmap/pubs/p534-013.htm#en_us_publink100043739

Loss of Records(p13)

rule
When you establish that failure to produce adequate records is due to loss of the records through circumstances beyond your control, such as through fire, flood, earthquake, or other casualty, you have the right to support a deduction by reasonable reconstruction of your expenditures and use.
taxmap/pubs/p534-013.htm#en_us_publink100043740

Reporting Information on Form 4562(p13)

rule
If you claim a deduction for any listed property, you must provide the requested information on page 2 of Form 4562. If you claim a deduction for any vehicle, you must answer certain questions on page 2 of Form 4562 to provide information about the vehicle use.
taxmap/pubs/p534-013.htm#en_us_publink100043741

Employees.(p13)

rule
Employees claiming the standard mileage rate or actual expenses (including depreciation) must use Form 2106 instead of Part V of Form 4562. Employees claiming the standard mileage rate may be able to use Form 2106-EZ.
taxmap/pubs/p534-013.htm#en_us_publink100043742

Employer who provides vehicles to employees.(p13)

rule
An employer who provides vehicles to employees must obtain enough information from those employees to provide the requested information on Form 4562.
An employer who provides more than five vehicles to employees need not include any information on his or her tax return. Instead, the employer must obtain the information from his or her employees and indicate on his or her return that the information was obtained and is being retained.
You do not need to provide the information requested on page 2 of Form 4562 if, as an employer:
  1. You can satisfy the requirements of a written policy statement for vehicles either not used for personal purposes, or not used for personal purposes other than commuting; or
  2. You treat all vehicle use by employees as personal use.
See the Instructions for Form 4562.