May 12th, 2011
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Author: Wisconsin Rep. Jim Sensenbrenner, along with eight other house Republicans and three Democrats, wrote a letter to IRS Commissioner Douglas Shulman earlier this week calling on the agency to increase the rate it uses for mileage deductions.
The letter says that record increases in gas prices have led many to “rightfully worry that the costs of operating an automobile may soon prove to be prohibitive, dealing a potential crushing blow to individuals and businesses.”
Currently, a mileage deduction of 51 cents per miles is used to calculate “the deductible costs of operating an automobile,” according to the letter. Businesses frequently claim such deductions, and many offer an equivalent reimbursement rate to employees to compensate them for gas expenses.
The current rate, established at the end of 2010, could be increased mid-year, effective for miles driven in the second half of 2011. The IRS made such a change when gas prices spiked in 2008.
“We are now faced with a similar situation in which high gas prices are hurting individual Americans,” the letter adds.
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