I'm not a lawyer so you need to find out if you need to proceed against your daughter. The IRS generally does not like deductions when there is a source for reimbursement that the taxpayer ignores.
as I stated previously, see what others say.
In any case since the daughter was driving that says business use was not 100% so that would also limit any deduction your client is entitled to. Personal casualty losses are not deductible.
