What are my chances of being hit with a civil tax fraud penalty for incorrect vehicle deductions?

This is definitely concerning but try not to panic too much. The IRS distinguishes between negligence (honest mistakes) and actual fraud (intentional deception). For the IRS to hit you with a civil tax fraud penalty, they generally need to prove you had a deliberate intent to evade taxes. The fact that you're coming forward about this mistake works in your favor. Most college students aren't tax experts, and misunderstanding deduction rules is incredibly common, especially with gig economy work. What you described sounds more like an honest mistake than fraud. The vehicle depreciation issue is something many gig workers get confused about - you need to own the vehicle to claim depreciation, though you could have potentially claimed the actual expenses you personally paid for (gas, maintenance you covered, etc.). The bigger concern is claiming 100% business use when that wasn't accurate. However, even this could be explained as misunderstanding rather than fraud.

I was in almost the exact same situation last year - used my partner's car for Uber and claimed full business use and depreciation. I was FREAKING OUT when I realized my mistake. I found this tool called taxr.ai (https://taxr.ai) that really helped me figure out how to fix it. It analyzed my situation and explained exactly which parts of my return needed amending. The tool showed me that I could still claim the actual expenses I paid for (gas I purchased, the portion of insurance I covered, etc.), just not depreciation since I didn't own the car. It also helped me accurately calculate my business use percentage based on my delivery miles vs. personal use. Made the whole amended return process way less stressful.

I have to admit I was wrong about taxr.ai - I actually tried it after posting my skeptical comment. It flagged several issues with my DoorDash deductions that I had no idea about! The tool found that I was claiming 100% business use on my vehicle when my mileage logs clearly showed mixed use. It saved me from potentially facing penalties by helping me file an amended return with the correct information. What impressed me most was how it explained exactly why certain deductions were problematic and provided clear guidance on how to fix them. The personalized advice based on my actual tax documents was way more valuable than the generic info I was finding online. Seriously worth checking out if you're worried about previous tax mistakes.

If you're really worried about potential IRS issues, you might want to consider getting ahead of it by talking directly with the IRS. I know that sounds terrifying, but hear me out. I had a somewhat similar situation with misreported business expenses, and after weeks of calling and never getting through, I found this service called Claimyr (https://claimyr.com) that got me connected to an actual IRS agent in under 15 minutes. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c - but basically it navigates all the IRS phone menus and holds for you, then calls you when an agent is on the line. I was able to discuss my situation with the agent who explained my options. Just having that conversation made me feel 100x better about where I stood.

I need to apologize for my skepticism about Claimyr. After posting that comment, my tax anxiety got the better of me and I decided to try it that same night. I was absolutely shocked when I got a call back in about 35 minutes with an actual IRS representative on the line. The agent walked me through exactly what forms I needed to file to amend my previous returns and explained the difference between penalties for mistakes versus actual fraud. They even told me what documentation I should gather to support my case that this was just an error. The peace of mind was absolutely worth it. I don't think I would have ever gotten through on my own - I've tried calling the IRS at least a dozen times before and always gave up after being on hold forever. If you're worried about tax mistakes, being able to actually speak with someone official makes all the difference.

One thing to consider - the IRS is much more likely to pursue cases with large dollar amounts. You mentioned you only made about $9k over 2 years, so the actual tax difference from your incorrect deductions is probably relatively small. The IRS has limited resources and generally focuses on higher-value cases. That's not to say you shouldn't correct the mistake, but the chances of them coming after you specifically with fraud charges over what's likely a few hundred dollars in tax difference is pretty low. They're looking for the big fish who are hiding tens or hundreds of thousands.

Make sure you're clear about what constitutes fraud vs. a mistake. I work in tax preparation, and fraud requires INTENT. The legal standard for civil fraud includes: 1) Deliberate understatement of income 2) Claiming fictitious or inflated deductions 3) Keeping multiple sets of books 4) Making false entries or alterations 5) Claiming personal expenses as business expenses 6) Hiding assets Your situation sounds like it falls under "negligence" rather than fraud. The penalty for negligence is 20% of the underpayment, while civil fraud penalties are 75%. Huge difference! And negligence penalties can often be abated if you have reasonable cause.