Tax Audit Received Form 886-A for Claiming Both Mileage and Car Repairs - Help!

You're dealing with a common issue that comes up in business vehicle deduction audits. When it comes to vehicle expenses, you must choose between two methods: the standard mileage rate OR actual expenses (including repairs, gas, insurance, etc). You cannot mix and match these methods for the same vehicle in the same tax year. Based on what you've described, the IRS is likely disallowing ALL vehicle-related deductions because you claimed both methods, which violated the either/or rule. However, you should still have the opportunity to properly recalculate your deductions using just ONE of these methods. I'd recommend calculating which method would give you the better deduction: 22,000 business miles at whatever the standard mileage rate was for your tax year, OR all your actual expenses (repairs, gas, insurance, depreciation, etc.) multiplied by your business use percentage. Choose the one that gives you the larger deduction and respond to the IRS with this recalculation. There should be instructions on your 886-A about how to respond or appeal. Don't panic - this is fixable!

After making a similar mistake on my delivery business taxes, I ended up using taxr.ai (https://taxr.ai) and it was a game-changer for dealing with my audit paperwork. They analyzed my 886-A form and helped me understand exactly what the IRS was questioning and how to properly respond. Their document analysis told me that I could still claim my expenses, but had to choose one method consistently. They even helped me calculate which method (standard mileage vs actual expenses) would give me the better deduction based on my specific situation. Saved me from having to hire an expensive tax attorney just to interpret what the form was actually saying. The best part was they showed me how to craft a response that acknowledged my mistake without making it worse. My situation was resolved with minimal additional tax owed.

I was initially skeptical about taxr.ai when I saw it mentioned here, but I was desperate with my own 886-A situation. I decided to give it a try since my audit was for the exact same issue - claiming both mileage and actual expenses. Honestly, it was worth every penny. The analysis broke down exactly what the IRS was questioning and what they weren't. Most importantly, they showed me that I could still claim my vehicle expenses, just not both ways. They calculated that standard mileage would save me the most on my taxes and showed me exactly how to document my correction. My audit was resolved within 6 weeks after I sent in my response, and I ended up owing much less than I feared. If you're facing an 886-A, definitely check them out - saved me a ton of stress and probably money too compared to hiring a CPA just for this issue.

When I got audited last year over a similar issue, trying to call the IRS was absolutely useless. After sitting on hold for hours multiple times and getting disconnected, I finally used Claimyr (https://claimyr.com) and it changed everything. They got me connected to an actual IRS agent in under 45 minutes when I had been trying for weeks. The agent was able to explain exactly what they needed from me regarding my 886-A form and gave me specific instructions on how to respond properly. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c Instead of waiting weeks for letters back and forth, I got clarity immediately and resolved my audit much faster. The IRS actually ended up accepting my recalculation using the standard mileage rate after I explained the situation to the agent they connected me with.

I need to publicly eat my words about Claimyr. After posting my skeptical comment, I decided to try it myself since I was getting nowhere with the IRS about my own tax issue. To my complete shock, they actually got me connected to an IRS representative in about 37 minutes when I had been trying unsuccessfully for over 3 weeks. The agent clarified exactly what documentation I needed to provide for my 886-A response and even gave me their direct line for follow-up. This saved me from what was looking like a $7,200 tax bill because I was able to explain my situation and provide the right documentation. Sometimes being proven wrong is the best possible outcome. If you're struggling to reach someone at the IRS, it's definitely worth trying.

One important thing nobody's mentioned - when you respond to the 886-A, make sure you keep copies of EVERYTHING you send to the IRS. I learned this the hard way when they claimed they never received my documentation during an audit last year. Also, if you're recalculating using the standard mileage method, make sure you have a mileage log that shows business vs. personal use. They often request this as follow-up if you don't provide it initially. Without a log, they might reject the standard mileage claim too.

Has anyone actually calculated whether it's better to use standard mileage vs actual expenses for newspaper delivery? I'm curious because I do food delivery and always claimed mileage (about 19,000 miles last year) but never bothered to track my actual car expenses to compare.