IRS urged to increase standard mileage rates

IRS urged to increase standard mileage reimbursement rates

Several requests have been made to the IRS in recent days to increase its standard mileage rates.

The standard mileage rate for use of a car (including vans, pickups, and panel trucks) is currently 50.5 cents per mile for business-related travel, and 19 cents per mile for medical or moving expense-related travel. Employers paying a mileage allowance in excess of the standard rate must report the excess on Form W-2. The IRS generally adjusts the standard mileage rates annually, based on a yearly study of the fixed and variable costs of operating an automobile.

On May 19, 2008, Sen. Charles Schumer (D-NY) introduced a bill in the Senate called the “Reimburse Our American Drivers (ROAD) Act of 2008,” that would temporarily increase the standard mileage rate to 70 cents per mile on travel for business, medical, and moving expense-related purposes. Federal employees would also be allowed to use this rate. The rate would be in effect during all of 2008. The legislation has been referred to the Senate Finance Committee for consideration [S. 3032, 5/19/2008].

On June 6, 2008, National Treasury Employees Union (NTEU) President Colleen Kelley wrote a letter to IRS Commissioner Douglas Shulman, on behalf of federal government employees, asking him to consider making a mid-year adjustment to the 2008 standard mileage rates. Kelley noted that taxpayers would receive relief much sooner if there was direct IRS action to increase the standard mileage rate, rather than waiting for the merits of a rate increase to be debated in Congress [NTEU Letter to IRS, 6/6/2008].

On June 11, 2008, Senator Norm Coleman (R-Minn.) sent a letter to Commissioner Shulman, requesting that the IRS increase the 2008 standard mileage rates to better reflect the high cost of travel. Coleman noted that in 2005, the IRS raised the standard mileage rates for the last four months of the year, rather than waiting until year-end, due to a large increase in gas prices [Coleman Letter to IRS Commissioner, 6/10/08].