Man Allowed to Take Tax Deduction for Damage to Car from DUI Wreck
The United States tax code allows taxpayers to deduct property damage, using Form 4684 to claim a casualty loss deduction. One motorist took that to an extreme when he wrote off the value of his wrecked pickup truck following a DUI accident.
In 2005, Justin M. Rohrs attended a party where he anticipated he would be drinking, so he arranged for a ride to and from the gathering at his friend’s house. But after arriving at home after the party, he decided to drive to his parent's house in his new 2006 Ford F-350 pickup truck, originally valued at $40,210. En route, he slid off the road and rolled the vehicle. Rohrs registered a blood alcohol content of .09%, just above the legal limit for intoxication, and he was charged with driving under the influence.
Rohrs' insurance company declined to pay for the loss of his truck because of the charge of drunk driving. The IRS initially denied his deduction of a $33,629 casualty loss.
Rohrs elected to take the issue to Tax Court, where a judge had to decide if there was willfull negligence. The judge said that drinking and driving in itself does not amount to willful negligence, and that the degree of impairment would be important in making that finding. Noting that Rohrs had arranged for a ride earlier in the day and had a BAC just above the legal limit, the judge found in Rohrs' favor.
The U.S. Tax Court was established by Congress to resolve taxpayer disputes with the IRS. The court is based in Washington, D.C., though its judges travel across the United States to conduct trials.
