House Votes Repeal of IRS Auto Ruling : Senate Unit Also OKs End to Record Keeping

The House voted overwhelmingly Tuesday to repeal a controversial Internal Revenue Service requirement that taxpayers who use automobiles and trucks for business purposes must keep detailed, up-to-date records of each trip and the mileage.

The House vote of 412 to 1 came despite steps by the IRS in February to ease the burden of its new regulation, which has drawn a flood of angry protests to Congress from farmers and the self-employed.

The Senate Finance Committee, meanwhile, approved a similar measure by a vote of 17 to 0. Final congressional action to repeal the requirement may occur later this week.

On ‘Way Out’

“That little turkey’s on the way out,” Senate Majority Leader Robert Dole (R-Kan.) told reporters.

The House-passed measure would make repeal retroactive to Jan. 1, meaning that last year’s less complicated mileage-deduction rules would remain in effect for all of this year. The bill would also repeal a new requirement that up-to-date records be kept for the business use of home computers and other equipment adaptable to personal use.

Proponents of repeal said Congress did not realize what would happen when it voted last year to empower the IRS to remedy abuses by some taxpayers who purchased luxury automobiles for business and personal use but claimed a business-tax break covering the total cost of the car.

The IRS “overreacted,” according to proponents of repeal, by tightening its rules so that taxpayers had to justify each business use of a vehicle with log entries much like those kept by taxi drivers.

Reacted to Protests

Repeal advocates said farmers who drove trucks or farm vehicles had to scribble down mileage after each visit to their fields.

Reacting to the protests, the IRS in February relaxed the rule so that mileage could be tabulated at the end of a trip or the end of a day of short trips. But members of Congress said the protests continued unabated.

The repeal does not alter the longstanding requirement that taxpayers must keep adequate records to substantiate deductions claimed for business use of cars, trucks, computers or similar equipment that lends itself to personal use as well. But “contemporary” records no longer will be required.