Turning Back Time on Actual Expenses vs. Standard Mileage

Q: I know that the IRS prohibits using the actual expenses method during the first year of vehicle usage and then using the standard mileage deduction for the succeeding years.  However, I have tried to circumvent this rule:

I want to shift to the standard mileage method this year and subsequent years. Therefore, I filed an amended tax return for the first year of the vehicle's use and changed my vehicle deduction from actual to standard mileage. Then I included a payment with the return to make up for the resulting tax deficiency.

I then filed my current return for 2006 using the standard mileage method which is easier and allows me a larger deduction this year. Is this allowed?

A: I applaud your outside the box thinking.  Let's look at this one piece at a time.

First, those not familiar with the actual vs. standard debate, click here to read about the basics.

According to tax rules, if one is to use the standard mileage system at all, it must be so elected in the first year.  Claiming actual expenses the first year precludes using standard mileage at all in future years.

So, can you go back and amend the return later?  No such luck.  From Publication 463:

"You must make the choice to use the standard mileage rate by the due date (including extensions) of your return.  You cannot revoke the choice."

What that tells me is that you can't elect the standard mileage rate, and then go back and elect the actual expenses method.  However, your plan is to go back to a year when you claimed actual expenses and instead choose the standard mileage rate.  That is precluded from the first sentence in the paragraph, which says standard mileage must be chosen by the due date of the return, including extensions.

The quick and dirty of it is that amended returns in this area are simply not possible.  If you choose actual expenses, the time limit of the first sentence trips you up.  If you choose standard mileage, the non-revocation language of the second sentence trips you up.  Either way, you made your bed and you have to sleep in it.