A bill to repeal the contemporaneous recordkeeping requirements added by the Tax Reform Act of 1984, and for other purposes.

(Conference report filed in House, H. Rept. 99-67)

Amends the Internal Revenue Code to repeal the requirement that contemporaneous records be kept to substantiate tax deductions for certain business expenses, including automobile expenses, business entertainment expenses, and expenses for gifts. Requires taxpayers to supply adequate records or sufficient evidence corroborating the taxpayer's own statement to substantiate these deductions. Repeals the requirements imposed on tax return preparers with respect to informing taxpayers of certain recordkeeping requirements. Repeals the negligence penalty with respect to underpayment attributable to failure to meet the substantiation requirements. Repeals the regulations issued to carry out such provisions.

Provides that the substantiation requirements with respect to the deduction of certain transportation expenses shall not apply with regard to "qualified nonpersonal use vehicles" (defined as any vehicle which, by reason of its nature, is not likely to be used more than a de minimis amount for personal purposes).

Provides that an employer may elect not to deduct and withhold income taxes with respect to the noncash fringe benefit attributable to an employee's personal use of a highway motor vehicle provided by the employer. Requires an employer making such an election to notify the employee and to include the fair market value of the benefit on the Form W-2 furnished to the employee.

Reduces the amount of the limitation on the investment tax credit for an automobile from $1,000 to $675. Reduces the annual depreciation deductions that are allowed for an automobile to: (1) $3,200 depreciation in the first year (currently limited to $4,000); and (2) $4,800 depreciation for any subsequent year (currently limited to $6,000). Provides for a four-year deferral of the annual inflation adjustment of these limits.

Requires the Secretary of the Treasury to prescribe regulations by October 1, 1985, to carry out this Act.