In McGowan v. Commissioner, T.C. Memo. 2009-172, the U.S. Tax Court allowed a pilot escort driver for oversize load trucks to deduct some mileage expenses but not meal expenses.

Facts & Procedural History 

Mr. McGowan worked for Servco Oil and Standard Oil of Connecticut as a truck driver.

In addition, Mr. McGowan worked for William J. Loosemore, Jr. and Safe-Way Pilot Car Service (Safe-Way) as a pilot vehicle escort for wide and/or oversize load trucks. Mr. McGowan used his own automobile in performing these tasks.

Mr. McGowan was issued Forms W-2 for his truck driving activities and Forms 1099-MISC for his pilot vehicle escort activities.

Mr. McGowan did not file federal income tax returns for 2002-2004.

The IRS prepared substitute for returns or SFRs, which were based on the Forms 1099, W-2, etc. that third parties provided to the IRS.

Mr. McGowan filed a petition with the U.S. Tax Court to contest the amount of income and expenses that the IRS allowed.

Reported Income

With respect to the amount of income reported to Mr. McGowan on Forms W-2 and 1099-MISC, Mr. McGowan merely stated that the amounts were not correct. He did not offer any evidence to support this argument. Thus, the court concluded that the IRS’s was correct in determining the amount of income Mr. McGowan received.

Allowable Deductions

With respect to the allowable deductions, Mr. McGowan argued that the IRS allowances did not account for mileage deductions and deductions for unreimbursed meal expenses arising from his work as a pilot vehicle escort for Safe-Way and William J. Loosemore, Jr.

As listed property, as defined in Section 280F, contemporaneous mileage logs are generally required for the use of a passenger automobile. Mr. McGowan did not have a contemporaneous mileage log for his car. Instead, Mr. McGowan prepared an estimate of the mileage, and arged that he was entitled to the standard mileage rate allowed by the IRS. The court relied on the mileage log maintained by Safe-Way, which provided mileage that was less than half of the amounts Mr. McGowan had estimated. The court allowed this mileage at the standard rates.

Mr. McGowan also argued that he was entitled to a deduction equal to the IRS’ per diem allowance for meals for each day he drove his automobile as a pilot vehicle escort. The IRS publishes revenue procedures each year that provide amounts that individuals may use, in lieu of actual expenses, to compute the amount allowable as a deduction for ordinary and necessary business meal and incidental expenses paid or incurred for travel away from home. These amounts are deemed substantiated, provided the individual substantiates the elements of time, place, and business purpose of the travel expense. The court noted that Mr. McGowan did not provide any information regarding the time, place or business purpose of the meals for which he claims an allowance. The court also noted that Mr. McGowan’s pilot escort activities did not last more than one day each. The travel must generally include an overnight stay to be deductible. Thus, the court did not allow Mr. McGowan to deduct his meal expenses.

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