Internal Revenue Bulletin: 2012-2
January 9, 2012
Table of Contents
This notice provides the 2012 standard mileage rates for taxpayers to use in computing the deductible costs of operating an automobile for business, charitable, medical, or moving expense purposes. This notice also provides the amount taxpayers must use in calculating reductions to basis for depreciation taken under the business standard mileage rate, and the maximum standard automobile cost that may be used in computing the allowance under a fixed and variable rate (FAVR) plan.
Rev. Proc. 2010-51, 2010-51 I.R.B. 883, provides rules for computing the deductible costs of operating an automobile for business, charitable, medical, or moving expense purposes, and for substantiating, under § 274(d) of the Internal Revenue Code and § 1.274-5 of the Income Tax Regulations, the amount of ordinary and necessary business expenses of local transportation or travel away from home. Taxpayers using the standard mileage rates must comply with Rev. Proc. 2010-51.
An independent contractor conducts an annual study for the Internal Revenue Service of the fixed and variable costs of operating an automobile to determine the standard mileage rates for business, medical, and moving use reflected in this notice. The standard mileage rate for charitable use is set by § 170(i).
Notice 2010-88, 2010-51 I.R.B. 882, requested comments on the limitation in section 4.05(1) of Rev. Proc. 2010-51 on using the business standard mileage rate for five or more automobiles (such as in fleet operations). Only one responsive comment was received, which suggested extending the business standard mileage rate to larger fleets. After considering this comment, and in light of the limited number of comments, the Service has decided to make no changes to section 4.05(1) at this time.
The standard mileage rate for transportation or travel expenses is 55.5 cents per mile for all miles of business use (business standard mileage rate). See section 4 of Rev. Proc. 2010-51.
The standard mileage rate is 14 cents per mile for use of an automobile in rendering gratuitous services to a charitable organization under § 170. See section 5 of Rev. Proc. 2010-51.
The standard mileage rate is 23 cents per mile for use of an automobile (1) for medical care described in § 213, or (2) as part of a move for which the expenses are deductible under § 217. See section 5 of Rev. Proc. 2010-51.
For automobiles a taxpayer uses for business purposes, the portion of the business standard mileage rate treated as depreciation is 21 cents per mile for 2008 and 2009, 23 cents per mile for 2010, 22 cents per mile for 2011, and 23 cents per mile for 2012. See section 4.04 of Rev. Proc. 2010-51.
For purposes of computing the allowance under a FAVR plan, the standard automobile cost may not exceed $28,000 for automobiles (excluding trucks and vans) or $29,300 for trucks and vans. See section 6.02(6) of Rev. Proc. 2010-51.
This notice is effective for (1) deductible transportation expenses paid or incurred on or after January 1, 2012, and (2) mileage allowances or reimbursements paid to an employee or to a charitable volunteer (a) on or after January 1, 2012, and (b) for transportation expenses the employee or charitable volunteer pays or incurs on or after January 1, 2012.
Notice 2010-88, as modified by Ann. 2011-40, 2011-29 I.R.B. 56, is superseded.
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