@Vasia wrote:
Great explanation except for one thing….Where does it state in the tax code that it depends on if the vehicle is owned by the LLC (s-corp), C-Corp etc…? I ask this as I worked for a very large corp chain for 20 years. These were leased vehicles. With these vehicles we had to do 3 things each month. Log the starting odometer. The ending odometer. And the amount of personal mileage we drove. Nobody has a log each trip each day lol.
In the situation you describe, driving a company-provided car for personal use (owned or leased doesn't matter) is taxable income to the employee. The employer is supposed to add the value of your personal miles to your income and deduct social security and medicare tax, and include the value of the car on employee W-2s. If the company were audited, they have to prove that their method of determining the taxable portion of company car use is accurate and reliable. I don't know what the IRS audit manual says on the topic, but it seems from your story that either the company was never audited, or a monthly self-report was considered reliable.
