Hitting the highway with Uncle Sam's help

The only good thing about higher gasoline prices is
that the IRS uses them to determine its annual inflation adjustments to the standard mileage rates we use to calculate our deductible driving.

Beginning Jan. 1, 2007, you can deduct 48.5 cents per mile for business travel and 20 cents per mile for medical or moving miles.

The new business rate is 4 cents higher than this year's rate of 44.5 cents per mile. The medical and moving rate is 2 cents more than the 18 cents allowed for such driving in 2006.

The standard mileage rates are based on an annual study of the fixed and variable costs of operating an automobile. In addition to making the changes based on pump prices, the IRS also took into account higher auto prices during the year that ended in October.

One tax-related travel deduction remains the same. You still can only deduct 14 cents per mile for travel done in connection with a charitable organization's services. This figure has been stuck at that ridiculously low level for years, since it's set by statute rather than inflation adjusted like the others each year.

If you use your car for business, stick a notepad in your glove box or in-seat console so you can jot down the miles for your next tax return. You can use it to also note any other deductible driving distances.

You don't have to submit the documentation with your return, but you'll definitely want them in case the IRS has questions later.

Clicking away the miles: Keeping an
eye on those dashboard numbers comes naturally. I suspect there's not a driver among us who hasn't noticed when his or her car is about to hit an odometer milestone.

There's something magical about watching the digits roll to that lovely line of zeroes. I know when I pulled back into the garage a few months ago, the first thing I did upon walking into the house was announce to the hubby that the ol' Cavalier hit 30,000.

Yes, added mileage is definitely a matter of pride; a reflection of your vehicle's dependability and your commitment to keep it running after all these years. The ultimate achievement is when you get to boast of five goose eggs on the dashboard reading.

Of course, when we go to buy a used car, our approach is totally reversed. This time, the fewer the miles, the better. Unfortunately, unscrupulous sellers know that, so they turn to rolling back, or "clocking," odometers.

In an effort to thwart such scams, there's a federal odometer law (49 U.S.C. Chapter 327; initially enacted in 1974 and updated in 1994 as part of Public Law 103-272) against tampering with mileage meters. It prohibits the "disconnection, resetting, or alteration of a motor vehicle's odometer with intent to change the number of miles indicated thereon." The law also requires written disclosure of the odometer reading by the seller to the purchaser on the vehicle's title when ownership changes hands.

To assist with this law's enforcement, there's a federal office dedicated to tracking down and prosecuting odometer tampering. The Office
of Odometer Fraud Investigations, which is part of the National Highway Traffic Safety Administration, was created to "reduce the cost of vehicle ownership by deterring odometer fraud."

Costly rollbacks: The NHTSA says that consumers too often pay more than they should for used autos based on fraudulent odometer readings that misrepresent the vehicles' actual condition and expected remaining usefulness. The numbers: More than 400,000 vehicles are sold each year with false odometer readings, costing buyers more than $1 billion, or an average of $2,336 per each incident.

And that billion dollar estimate is just for the price of the cars; that is, the difference between the inflated prices that consumers paid for rolled-back vehicles and what they would have been willing to pay if they had known the autos' true mileage.

To calculate the full cost of odometer tampering, you'd have to figure in inflated financing, insurance and tax costs on falsely over-valued autos, along with the eventual repairs that follow since the autos have more wear and tear than indicated by the false dashboard readings.

Detecting odometer fraud: It's not easy to determine whether an odometer has been tampered with, but there are some indicators that a reading might be too low. When conducting a prepurchase auto inspection, you should --

• Closely examine the vehicle's title if the mileage notation seems obscured or is not easy to read.
• Be suspicious of a recently-issued title, a title stamped "duplicate" or a one issued in another state.
• Compare the mileage on the odometer with the mileage indicated on the vehicle's maintenance or inspection records.
• Look for old oil change stickers, repair orders or inspection certificates (either posted on the vehicle's windshield, inside the doors or in the glove compartment) that show mileage inconsistent with the current readings.
• Make sure the odometer works.
• Check that the gauge numbers are aligned correctly. It's definitely not a good sign if they're crooked, contain gaps or jiggle when you bang on the dash with your hand.
• Watch out for a dashboard that's missing screws or has loose parts. It could mean the odometer has been dissembled.
• Take note of tell-tale tire wear. An auto with an odometer reading of 20,000 or less should have the original tires.
• Observe other wear indicators, especially the gas, brake and clutch pedals, to be sure it seems consistent with and appropriate for the number of miles displayed on the odometer.

To get the official word on a vehicle's odometer reading, check with your state's motor vehicle office. You can find contact info for all 50 plus D.C. here.

And if you think you've been the victim of odometer fraud, in addition to contacting the OFI, also give your state Attorney General a call. Here is a comprehensive AG list.

All about odometers: Want to know how odometers work? Find out here, as well as in this article.

This CarConnection item includes a discussion of how criminals tamper with the dashboard readings. No, it's not as simple as that futile teenage dream of driving in reverse so that mom and dad can't tell you took the car out against their orders.

But in some cases, especially with the older analog odometers, auto crime experts say the rollback can be done in as little as five minutes. Even the toughest digital gauges can be clocked in a few hours.

Comments

[JH27]

Did you know that odometers are also how they kept track of where Odo, that shape-shifter guy on Star Trek: Deep Space Nine, went?

[Kay]

Dimes to Dollars (http://dimestodollars.blogspot.com/) submitted a comment to this entry, but for some unknown technical reason, it showed up in my email but not here. So I'm reproducing it here:

"Charitable mileage is embarrassing. Our state allows a few extra cents deduction per mile, if I recall correctly. And does the fiscal year end 31 Oct, or 30 Sept?"

I totally agree about the incomprehensible way federal law treats charitable mileage write-offs. There have been some rumblings about tying it to inflation, too. Maybe in the next Congress.

As for the fiscal year, she's right. My bad. The IRS release said "the year that ended in October" and in my haste to post, I automatically thought federal government-fiscal year and inserted the word "fiscal" erroneously.

Thanks, Dimes, for reading, for your comments and for keeping me on my toes!