Perhaps no provision of the Tax Reform Act of 1984 generated more controversy than the requirement for contemporaneous record-keeping to substantiate a tax deduction for business use of an automobile.
The heat was felt in the marbled halls of Washington, and the IRS recently issued new temporary rules that provide some relaxation of the requirements for a detailed log of use.
There are now a number of "exceptions" that will exempt car users from the rules for record-keeping. For example, no log need be kept if the vehicle stays at the place of business during nonbusiness hours, if the employer has a policy against personal use and if the car is in fact not used for personal purposes (except for what the IRS calls "de minimus" use, such as going to lunch).
The number of other exceptions, and their complexity, precludes further explanation here. If you're concerned about business use of a car, consult your tax accountant about the new rules or ask the IRS for a copy of the proposed regulations (which may not be available for the general public yet).
But I should warn you that the rules are lengthy and complicated; you may have trouble finding your way through the maze of technical jargon without some help from a professional.
If your research leads you to conclude that your situation still requires record-keeping, I have an offer for you. The accounting firm of Deloitte Haskins & Sells has published a glove-compartment-sized booklet designed to satisfy IRS requirements.
They'll be glad to send you one free if you write on your business letterhead (or enclose your business card). Send your request to Wade S. Williams, Manager, Corporate Services Group, Deloitte Haskins & Sells, 655 15th St. NW, Washington, D.C. 20005.
Here's another "freebie." Fidelity Investments is offering an updated version of its comprehensive "IRA Owner's Guide." Except for brief mention on the last page and on the back cover, this booklet is not a promotion piece for either Fidelity or mutual funds.
The booklet contains answers to the most commonly asked questions, an excellent list of suggested sources for additional information and a "record keeper" to help you keep track of your IRA investments.
For your free booklet, write -- mentioning this column -- to Fidelity Investments, 82 Devonshire St., P.O. Box 832, Boston, Mass. 02103.
From the law firm of Strauss and Wolf (Two Park Ave., New York, N.Y. 10016) comes a reminder of the importance of having a fallback position for management of your assets in case you become seriously ill and unable to handle your affairs.
Here and there, you'll find a person who has executed a power of attorney, giving a trusted family member or friend the right to act in the event of the grantor's incompetence. Until fairly recently, however, a standard power of attorney became invalid the moment you became incapacitated.
Now, however, most jurisdictions recognize what has come to be called a "durable power of attorney" -- one that remains in effect in the event of your incompetence.
The power can be written in such a way that it only comes into being when you are determined to be incompetent -- perhaps by a specified physician of your own choosing.
If you prefer, Strauss and Wolf suggest that the instrument can be placed in escrow with your personal attorney, with written instructions that it be activated only in the event of your incapacitation.
The durable power of attorney should be a part of your financial planning and should be executed along with your will. Failure to do so could prevent family members from obtaining funds for your care, or might require them to go to court for appointment of a conservator, imposing extra costs and state interference.