Compliance December 9, 2011

IRS Announces Business Mileage Rate for 2012

The Internal Revenue Service issued the 2012 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

 

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Beginning on January 1, 2012, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

  • 55.5 cents per mile for business miles driven
  • 23 cents per mile driven for medical or moving purposes
  • 14 cents per mile driven in service of charitable organizations

The agency said the rate for business miles driven is unchanged from the mid-year adjustment that became effective on July 1, 2011. The medical and moving rate has been reduced by 0.5 cents per mile.

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The standard mileage rate for business is based on an annual study, conducted by independent contractor Runzheimer International, of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs as determined by the same study.

A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

The IRS notice is available here.  

Compliance December 8, 2011

EBSA Clarifies Electronic Fee Disclosure Rules

The Employee Benefits Security Administration issued Technical Release 2011-03R, revising its interim policy regarding the use of electronic media to satisfy participant-level fee disclosure requirements.
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The technical release revises and restates Technical Release 2011-03 to clarify that continuous access websites are permissible electronic disclosures if the administrator complies with the conditions in the technical release; and investment-related information under paragraph (d) of the participant-level fee disclosure regulation may be furnished as part of, or along with, a pension benefit statement, either electronically under the conditions in the technical release or in paper form.    

On September 13, 2011, the department issued Technical Release 2011-03 (see “DoL Will Allow for Electronic Disclosure to Participants“), which states that the department will not take enforcement action based solely on a plan administrator’s use of electronic media to make the required disclosures under the participant fee disclosure regulation if the administrator complies with the conditions in the technical release.   

EBSA said it has received a number of inquiries regarding whether Technical Release 2011-03 is intended to apply to continuous access websites and whether, and under what circumstances, it allows investment-related information required under paragraph (d) of the participant-level fee disclosure regulation (i.e., the comparative chart) to be furnished as part of a pension benefit statement.      

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To view Technical Release 2011-03R visit http://www.dol.gov/ebsa/newsroom/tr11-03r.html.

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