Trucker Drivers Industry – IRS Tax Audit Specialist, Former IRS 1-866-700-1040
We are IRS Tax Experts for the Trucking Industry.
We have over 60 years of working directly for the Internal Revenue Service and the local, district, and regional offices of the Internal Revenue Service.
As former IRS agents we audited hundreds and hundreds of tax returns and only make sense that we know every tax defense possible.
If you are about to undergo an IRS tax audit or an IRS tax examination contact us today for a free tax consultation and see how we can best serve your need. Not only have we worked as former IRS agents we also have been managers, instructors and also on staff IRS appeals agents.
To find out about the IRS trucking industry overview click on the link below.
This link will be a more comprehensive and exhaustive look about the way IRS trucking industry overview works within the IRS format.
http://www.irs.gov/Businesses/Trucking-Industry-Overview—Complete-Version
Accounting Principles Observed by the IRS
The link between financial accounting and tax accounting is the Schedule M-1 of the Corporate Income Tax Return, Form 1120. Examples of M-1 adjustments that should be reviewed due to differences between financial and tax accounting include:
1. Abandonment’s
2. Accrued Rent paid to greater than 50 percent stockholder
3. Accrued Wages, Bonus and Vacation Pay of greater than 50 percent stockholder
4. Depreciation variances
5. Indirect and Direct Costs Capitalized (IRC Section 263A)
Insurance,
6. Officers Life Insurance-Increase in Cash Surrender Value
7. Self Insurance Reserve
8. Interest Expense Capitalized, (IRC Section 263A)
9. Inventory and Parts Write downs
10. Lease of Equipment (Lease vs Depreciation)
11. Lobbying (Dues to organizations that lobby)
12. Meals expense 50 percent reduction
13. Penalties and Traffic Citations
14. Prepaid/accelerated expenses
15. Tires on new tractors and trailers (deducted for tax, capitalized for book)
16. Write downs of Asset Values
17. Industry Operating Procedures
You do not want to be unrepresented for IRS tax audit if you are in the truck driving industry. Contact us today for free tax consultation.
General information regarding to truck drivers industry
The Trucking Industry is pervasive.
It serves as the carrier of choice for most small businesses, especially the very small firms, who rely on package express carriers to meet their transportation and logistics needs.
By revenue, food and food products, lumber or wood products, as well as petroleum or coal account for 34.8 percent of truck traffic. By volume, clay, glass, concrete and stone, farm products, as well as petroleum and coal account for 35.6 percent of truck traffic. Trucking’s customer focus has played a key role in helping to create the logistics revolution of the past decade.
Although the popular image of the industry is the tractor-semi-trailer hauling goods long distances over the Interstate highways, this image is not reality for two reasons.
First.
Truck equipment is diverse, dominated by smaller vehicles and a wide variety of equipment types.
Second.
The bulk of trucking operations is local.
Fact
About 66 percent of truck tonnage moves distances of 100 miles or less. Local and regional hauls account for almost half of all truck revenues and are the dominant arrangement for private carriers.
Contract Carriers.
Enter into a bilateral agreement with the shipper or consignee for transportation services. The contract defines the services to be provided, the commodities transported, the projected tonnage and the rates charged.
Contracts are to contain a specific termination date, not exceeding one year.
The contract can be renewed by amendment. The contract carrier can offer freight rates that are lower than a common carrier’s published tariff since the rate will be based on the projected tonnage of freight for the year.
Private Carriers.
Are corporations who run their own truck fleets to better coordinate their manufacturing processes or better serve their customers and distributors.
These firms have decided that it is better to provide their own services rather than use the services of for-hire motor carriers.
Local and regional hauls account for almost half of all truck revenues and are the dominant arrangement for private carriers. Most of their operations are moves of less than 100 miles.
This industry segment’s average length of haul is 51 miles.
Interstate For-Hire, Common Carriers .
Are companies who provide transportation services to the general public. A common carrier must obtain licensing and publish rates through the Surface Transportation Board and the PUC.
For-hires travel much farther distances than their private counterparts, with their minimum hauls being from 200 miles to 1,500 miles or more per trip.
The average trip is 1300 miles.
Distance varies based on the state, territory, or possession being served. A single driver can drive 450 to 500 miles per day. Team or relay driving can go farther in a 24-hour period. Dedicated service can move goods cross-country by the third morning.
More normal times are 4- 7 days.
A common carrier may be referred to as the prime carrier.
A Prime Carrier.
Is the principal or overlying common carrier. The prime carrier enters into a contract with a shipper to provide transportation services, but in turn, engages the services of another authorized common carrier or independent contractor (sub-hauler) to perform the transportation service.
They offer service either on a truckload (TL) or on a less-than-truckload (LTL) basis.
Truckload (TL).
Means the goods of only one customer are being carried on the vehicle. There generally are low start up costs associated with these operations because the truck equipment is the primary expense.
Less-than-truckload (LTL).
Means a vehicle is carrying the goods of many customers. This service has much higher start up costs because in addition to equipment costs, assembly and distribution facilities must be created to consolidate and then distribute the freight.
Inter-modal refers to the use of various forms of transportation (ships, trains, planes and trucks) used to move goods from other countries to the United States and across the continent.
In the 1980’s, trucks spearheaded the just-in-time revolution. It was motor carriers and shippers who were the first to experiment with set times for pick up and delivery so that less inventory was needed in the overall production process. In essence, their actions began integrating transportation into manufacturing and distribution as another business process.
Motor carriers face competition from airfreight for high value commodities and from railroads for lower value goods.
On high value goods, the competition pits traditional airfreight services against package express or courier services as well as expedited carriers. Because transportation costs are a small portion of the purchase price of these goods, firms are willing to pay premium rates. In this segment of the industry, delivery is predicated upon strict time and service requirements.
Air freight has an average value of $26 per pound and package express $15 per pound, while trucking’s general average shipment value is 35 cents per pound. Here carriers compete for commodities like computers and related goods, fresh flowers and foods, as well as letters and business documents.
On lower value goods, trucks share a dual nature relationship with railroads. They cooperate in providing inter-modal services. They also compete to capture market share on goods like automobiles and auto parts, food and kindred products, and inter-modal shipments. Weight and distance affect this competition.
In general, under 100 miles, competition occurs only on shipments weighing more than 60,000 pounds.
At 100-300 miles, competition occurs on shipments weigh between 60,000 and 90,000 pounds.
At 300 -500 miles, competition occurs on shipments that weigh between 30,000 and 90,000 pounds.
At 500 miles or more, commodities weigh between 10,000 and 60,000 pounds.
It should be noted that shipments in excess of 50,000 normally require a special permit to operate configured as a single load. The heaviest single trucks usually serve this part of the market or longer combination vehicles that run under more tightly controlled conditions than general trucking.
Because of these vehicles’ ability to compete with railroads, the rail industry is keenly interested in assuring that the current competitive market environment is maintained.
For trips under 100 miles, it is private carriers who are providing the competition. For trips over 100 miles, it is the for-hire motor carriers who are doing so.
Exception.
The only exception is for loads weighing between 30,000 and 60,000 pounds moving between 100-200 miles. Here, private trucking seems to be the carrier of choice.
Trucking and Railroads
The reason competition is so fierce between trucking and railroads is that while these goods are not the highest value freight for the trucking industry; they are high return for the railroad industry. Railroads see the returns made from these shipments, as well as those made from inter-modal shipments, as key to maintaining their profitability.
The relationship between railroads and truck lines is the most complicated of the modes of transportation because trucks have the ability to both generate freight for the railroads and take it away from them.
Railroads and trucks are business partners in providing inter-modal services. Trucks provide the short haul connections between the firm sending the freight and the railroad as well between the railroad and the customer receiving the freight. Trains provide the long haul service between origin and destination.
When trucks and trains compete, they compete for types of traffic, mostly the goods which give the railroads their higher profit margins – inter-modal, transportation equipment (automobiles – finished products as well as assembly supplies), chemicals, and food products. Inter-modal freight is subject to competition from long distance trucking companies.
As a result, even when there is a rail/truck business relationship with one motor carrier for an inter-modal move, there is a competitive tension with other long distance truckers seeking to capture the same business.
Trucker Drivers Industry – IRS Tax Audit Specialist, Former IRS
