Why this matters now
A new livestream titled “Trucking & Taxes, IRS debt solutions” put a timely spotlight on owner-operators and small fleets navigating back taxes, penalties and cash flow at year-end. With 2025 mileage and per diem figures set, and IRS collection activity normalizing, it’s a good moment to check your options and tighten your tax processes before Q1 freight ramps up.
Know the 2025 numbers that hit your bottom line
- Business mileage: 70 cents per mile starting Jan. 1, 2025. Consider whether standard mileage or actual expense yields a better deduction for your situation.
- Transportation-industry per diem (M&IE only): $80 CONUS and $86 OCONUS for 2025–2026; these special rates apply to truckers using the per diem method.
- Federal per diem framework (useful for context, especially for company drivers on reimbursements): FY 2025 standard M&IE tier increased to $68, with non-standard areas ranging to $92.
Falling behind? Map the IRS tools to your cash flow
- Installment agreement (Form 9465). If you can’t pay in full, you can propose a monthly plan. IRS guidance notes that if you don’t specify an amount, the agency may compute a payment by dividing your balance by 72 months, and may ask for financials (Form 433-F) for larger debts.
- Partial Payment Installment Agreement (PPIA). When your reasonable monthly ability to pay won’t full-pay the balance by the collection statute, the IRS can consider a reduced monthly amount. This often requires full financial disclosure but can keep trucks turning while you stabilize cash flow.
- Offer in Compromise (OIC). This settles for less than you owe when full payment would create hardship and your “reasonable collection potential” is limited. You must be current on filings and estimated payments to be considered. Application fee and initial payment are generally required, with low-income waivers available.
- Currently Not Collectible (CNC). If paying anything would prevent you from covering necessary living and business expenses, the IRS may pause active collection. Interest and penalties continue to accrue, but levies can stop while your finances improve.
Cut the cost of carrying tax debt
Two charges silently inflate a past-due IRS balance: interest and the failure-to-pay penalty. The failure-to-pay penalty is generally 0.5% per month of the unpaid tax, capped at 25%. If you enter an approved payment plan and filed on time, that monthly penalty drops to 0.25%—a small change that adds up for six-figure balances. If the IRS issues an intent-to-levy notice and you still don’t pay, the rate can increase to 1% per month.
Don’t overlook First Time Abate (FTA) penalty relief. If you’ve been compliant for the prior three years and meet other criteria, the IRS may remove certain penalties once—often the cheapest “win” available while you set up a plan.
Owner-operator bookkeeping moves that pay for themselves
- Lock in a documentation rhythm. For mileage, keep a consistent, contemporaneous log (e-logs can help but don’t replace a mileage record). For per diem, ensure you meet “away from home” rules and keep trip dates, locations and business purpose.
- Choose a method and stick to it. If you start a vehicle on standard mileage in year one, rules govern switching to actual expenses in later years; plan ahead for depreciation and Section 179 decisions on tractors and support vehicles.
- Fund quarterly estimates like a fixed cost. Many OO’s succeed by sweeping 25–30% of net settlement into a tax account weekly so April and September don’t become crisis months.
- Separate business and personal. Dedicated bank and card accounts make it easier to substantiate deductions and faster to produce financials if the IRS requests a 433-F for plans or settlements.
Fleet manager checklist
- Audit driver reimbursements. Align policy with GSA M&IE tiers for employee travel or use accountable plans to keep reimbursements non-taxable and reduce payroll exposure.
- Standardize recordkeeping. Provide templates or apps for receipts, trip sheets, and maintenance logs; clean books lower the time—and the payment—needed to resolve tax issues.
- Assign an escalation path. When an IRS notice arrives (balance due, intent to levy, or missing returns), designate who contacts the IRS within days to halt escalations and explore agreements.
Bottom line
If you owe, act early: get all returns filed, pick the relief track that fits your cash flow, and use 2025’s updated mileage and per diem rules to right-size deductions going forward. A modest monthly plan combined with First Time Abate or, in tougher cases, OIC/CNC can keep wheels rolling and protect working capital into peak season.
Sources Consulted: IRS (irs.gov) including pages on standard mileage, per diem guidance, penalties, installment agreements, Offers in Compromise, and Currently Not Collectible; U.S. General Services Administration (GSA) per diem highlights; CPA Practice Advisor; Forbes.
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This article was prepared exclusively for truckstopinsider.com. For professional tax advice, consult a qualified professional.
