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Archives
2008 Issue 3
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Mid-Year Changes for Standard Mileage Rates IRS Announces Voluntary Compliance Program for Form 990-Nonfilers Mid-Year Changes for Standard Mileage Rates The IRS has announced a rare mid-year increase in the 2008 optional standard mileage rates used to calculate deductions associated with the use of a car for business, medical, or moving purposes. Though the IRS normally adjusts mileage rates just once each calendar year, it has issued a special increase for the next six months in response to soaring gas prices. Effective July 1, 2008 through December 31, 2008, the new mileage rates are 58.5 cents per mile for business expenses and 27 cents per mile for medical and moving expenses. Both of the new rates represent an 8-cent increase from those set forth in Rev. Proc. 2007-70 at the beginning of the year. The mileage rate used to calculate deductions for services to charitable organizations, which is set by statute rather than the IRS, remains at 14 cents per mile. These mileage rates are currently fixed under the Internal Revenue Code and have not been changed in a number of years. Recognizing the burden that rising gas prices have placed on volunteers, three senators recently introduced the Fair Deal for Volunteers Act, which would allow the IRS to set the mileage rate for charitable activities so that it is more closely aligned with economic realities. Volunteers and the nonprofits that rely on their services have been strained by the current economic conditions, and the passage of this bill would allow the IRS to better enable them to continue to serve communities in need. Harmon Curran will continue to track this legislation and keep you apprised of new developments as they occur. By Christine Tschiderer  IRS Announces Voluntary Compliance Program for Form 990-Nonfilers The IRS recently announced that it will develop a voluntary compliance program to help organizations which have failed to file their Form 990s maintain their exempt status. The impetus for the program, which is not yet fully developed, is a provision in the Pension Protection Act that automatically revokes an organization's exempt status if it fails to file Form 990 for three consecutive years. Penalty fees for late filing will be waived for organizations in this program, but they will be required to pay a compliance fee which will be set on a sliding scale based on their gross receipts and assets. With the new program, the IRS hopes to enable exempt organizations to continue their good work while encouraging compliance. Once the program has been developed, the IRS plans to issue a revenue procedure and conduct outreach and publicity efforts. By Christine Tschiderer This publication is designed to provide accurate and authoritative information about the subject matter covered. It is not distributed with the intent to render legal, accounting, or other professional advice. The services of a competent professional should be sought if legal advice or other expert assistance is required. Newsletter Home | HarmonCurran Home | |