I'm trying to understand how I wouldn't be able to write off the following on my company taxes. We tow for the police departments. We get called out by the police and most of the time the vehicle goes to the tow yard. If the person involved in the accident doesn't have towing or only liability insurance they end up abandoning the vehicle at our yard. If this happens, I have to file an ABV and pay fees, then the process takes 45 to 60-days for us to receive the title, so I can dispose of the vehicle. So I'm already at a loss from the start. Below is an example of the loss.
01/01/2021 Police department calls for an accident tow and the customer abandons the vehicle at the yard.
$235 for tow
$4.50 @ 7 miles for mileage = $31.50
45 days at $30 = $1350.00
By the end of the 45 days, the owner owes me $1616.50 but never pays.
Now during this, I have paid 35 % of the original tow to the driver $93.28 (235+31.50)
Filing fee's $12.00 (ABV)
Inspection fee $30.00 (Vin check)
Employee 2 hours of time @ 420 ph $40.00 more if vin inspection is needed
Total 175.28 I've paid and never received the $1616.50 from the owner.
Above Totals $1791.78 of my loss
If I sell to a junk yard upon receiving the title, I usually get $200.00.
I'm being told by an accountant, I can't write it off because I'm a cash based company! Please don't pay attention to the numbers it's just an example. I'm also told to go to small claims and pay more fees to get a judgement that they wont pay anyways. How do you guys/gals handle this? Thanks!