2006 Standard Mileage Rates and Employee Reimbursement
Rules Released
(IR-2005-138; Rev. Proc. 2005-78)
2006
Standard Mileage Rates and Employee Reimbursement
Rules Released (IR-2005-138; Rev. Proc. 2005-78)
The
IRS has released the 2006 optional standard mileage
rates that may be used by employees, self-employed
individuals, and other taxpayers when computing
the deductible costs of operating an automobile
(including cars, vans, pickups or panel trucks)
for business, medical, moving or charitable purposes.
Business Mileage Rate: For
2006, the standard rate for business mileage is
44.5 cents per mile. For the first eight months
of 2005, this amount was 40.5 cents per mile however
the IRS made a special one-time adjustment for
the last four months of 2005 raising the rate
for business miles to 48.5 cents per mile because
of the sharp increases of gas prices at the time.
Medical and Moving Mileage Rate:
The standard mileage rate for medical or moving
expenses has been increased to 18 cents per mile
from 15 cents per mile. This amount had been increased
for the last four months of 2005 to 22 cents per
mile.
Charitable
Mileage Rate: The mileage rate for charitable
purposes, other than activities related to Hurricane
Katrina relief, remains at 14 cents per mile.
Katrina
Mileage Rate: For 2006, the rate for
miles driven for charities providing Hurricane
Katrina relief will be 32 cents per mile for deduction
purposes and 44.5 cents per mile for reimbursement
purposes. For the period August 25 to August 31,
2005, this was 29 cents, for deduction purposes,
and 40.5 cents, for reimbursement purposes. For
the months of September through December 2005,
the special Katrina-related rates are 34 cents
for deductions and 48.5 cents for reimbursements.
When
the 2006 business standard mileage rate of 44.5
cents is used, depreciation will be considered
to have been allowed at a rate of 17 cents per
mile. This depreciation rate will reduce the taxpayer's
basis in the automobile. The standard business
mileage rate may not be used for automobiles used
for hire (e.g., taxicabs), or when five or more
automobiles are owned or leased and used simultaneously
by the taxpayer (e.g., fleet operations). This
newly released IRS information also provides the
rules under which an employee's ordinary and necessary
expenses for local travel or transportation away
from home will be treated as substantiated. These
substantiation rules apply to situations when
the employee has received a reimbursement or other
expense allowance from an employer, its agent,
or a third party. Rev. Proc. 2004-64, I.R.B. 2004-49,
898, as modified by Announcement 2005-71, I.R.B
2005-41, is superseded.
IRS Warns of e-Mail Scam about Tax Refunds
WASHINGTON
— The Internal Revenue Service today issued
a consumer alert about an Internet scam in which
consumers receive an e-mail informing them of
a tax refund. The e-mail, which claims to be from
the IRS, directs the consumer to a link that requests
personal information, such as Social Security
number and credit card information.
This
scheme is an attempt to trick the e-mail recipients
into disclosing their personal and financial data.
The practice is called “phishing”
for information.
The
information fraudulently obtained is then used
to steal the taxpayer’s identity and financial
assets. Generally, identity thieves use someone’s
personal data to steal his or her financial accounts,
run up charges on the victim’s existing
credit cards, apply for new loans, credit cards,
services or benefits in the victim’s name
and even file fraudulent tax returns.
The
bogus e-mail, which claims to come from “tax
refunds@irs.gov,” tells the recipient that
he or she is eligible to receive a tax refund
for a given amount. It then says that, to access
a form for the tax refund, the recipient must
use a link contained in the e-mail. The link then
asks for the personal and financial information.
The
IRS does not ask for personal identifying or financial
information via unsolicited e-mail. Additionally,
taxpayers do not have to complete a special form
to obtain a refund.
If
you receive an unsolicited e-mail purporting to
be from the IRS, take the following steps:
·
Do not open any attachments to the e-mail, in
case they contain malicious code that will infect
your computer.
·
Contact the IRS at 1-800-829-1040 to determine
whether the IRS is trying to contact you about
a tax refund.
The
IRS has seen numerous attempts over the years
to defraud the public and the federal government
through a variety of schemes, including abusive
tax avoidance transactions, identity theft, claims
for slavery reparations, frivolous arguments and
more. More information on these schemes may be
found on the criminal enforcement page at IRS.gov.
Standard Mileage Rate Increase
The Internal Revenue Service has announced an
increase in the optional standard mileage rate
for the last four months of 2005. The rate has
been increased to 48.5 cents per mile for all
business miles driven between September 1 and
December 31, 2005. The increased four-month rate
for computing deductible medical or moving expenses
is 22 cents per mile. The rate for providing services
to charitable organizations still remains at 14
cents per mile.
Hurricane Katrina
The Internal Revenue Service has issued several
bulletins pertaining to the victims of Hurricane
Katrina. The bulletins explain the tax extension
times and relief available to businesses and individuals
devastated by Katrina. The link to the Internal
Revenue Service website is:
http://www.irs.gov/newsroom/article/0,,id=108362,00.html
There are also people unfortunately that take
advantage of situations like Katrina. Here is
a link to an IRS website.
http://apps.irs.gov/app/pub78
This website can be used to search for a tax-exempt
organizations. These are organizations that are
recognized by the Internal Revenue Service.
Contributions to tax-exempt organizations can
be deductible depending on an individual's tax
situation.
5,000 IRS Telephone Operators
Register Hurricane Victims for FEMA Benefits
The Internal Revenue Service announced today that
several thousand telephone operators are helping
the Federal Emergency Management Agency (FEMA)
answer telephone calls from Hurricane Katrina
victims.
The IRS has 2,743 employees working these telephone
calls today at locations in Atlanta, Buffalo,
Dallas and Philadelphia. By Friday, the number
of IRS employees will reach nearly 5,000.
IRS telephone assisters are taking calls seven
days a week from 7:30 a.m. to 11:30 p.m. to help
people with the FEMA registration process. Hurricane
victims call in and provide IRS employees with
basic information, such as name, address and types
of property damage. They are also referred to
other essential services, like the American Red
Cross.
"We've given the FEMA registration process
priority over our regular telephone service to
taxpayers. Hundreds of thousands of families have
suffered because of this hurricane and they are
scattered in communities across America,"
said IRS Commissioner Mark W. Everson. "They
can’t get the cash and housing benefits
to which they are entitled until they register
with FEMA. By calling back to work over 4,000
of our seasonal workers, we are speeding assistance
to hurricane victims while minimizing disruption
to our normal taxpayer services."
Those needing FEMA assistance
can call 1-800-621-FEMA (3362). Link to full article
below: http://www.irs.gov/irs/article/0,,id=148086,00.html
|
