Questions for the Tax Lady: May 17th, 2010

Check out the following new Questions for the Tax Lady answers and feel free to ask me questions through one of the links below. You can send me an email, direct message or @ reply, and I will do my best to get an answer for you!

Question #1: I had a Toyota that I turned in before the end of its lease back in 1997. It took Toyota until 2008 to report the mileage to the IRS, and Toyota didn't send me anything to dispute them. The IRS now claims I own them over $800 and they ate my entire refund this year and are now saying I still owe them $300. What should I do?

I am assuming that you are talking about business miles that you deducted on your return, which you include on your tax return the year the miles were driven. I do not quite understand why the IRS would withhold your refund for a mileage issue from 1997, and highly recommend contacting them directly at 1-800-829-1040 to find out why your refund was withheld. If you need any further assistance then I would recommend talk to professional accountant, CPA or tax attorney in order to get to the bottom of this issue.

Question #2: How do I contact the Taxpayer Advocate Service?

Answer: The Taxpayer Advocate Service (TAS) is a free service offered by the Federal government, but not every taxpayer will qualify for TAS assistance. You must meet certain income requirements and be able to prove that you are experiencing an economic burden because of the IRS collections. To find out if you qualify to work with the TAS call the Taxpayer Advocate Service Case Intake at 1-877-777-4778. If you do meet their requirements, then head over to this page on IRS.gov to find a local office to contact.

IRS Increases Mileage Rates

The IRS recently released this new press release announcing that they have increase the standard mileage rates as gas prices continue to skyrocket. According to the release, the rate will increase to 58.5 cents a mile for all business miles driven from July 1, 2008, through Dec. 31, 2008. This is an increase of 8 cents from the 50.5 cent rate in effect for the first six months of 2008.

"Rising gas prices are having a major impact on individual Americans. Given the increase in prices, the IRS is adjusting the standard mileage rates to better reflect the real cost of operating an automobile," claims IRS Commissioner Doug Shulman. "We want the reimbursement rate to be fair to taxpayers."

2007 IRS Mileage Rates

Good news for those who track their mileage expenses. The IRS recently announced that they are raising the tax mileage rate from 44.5 cents per mile to 48.5 cents starting January 1, 2007. This is up 4 cents from the 2006 mileage rate. For more information on calculating your mileage rate deduction visit 2007s.org.