IRS Updates Maximum Values for Employee Automobile Use

The IRS has updated for 2009 the maximum allowable value of an employer-provided vehicle for which the cents-per-mile and fleet-average rules may be used in determining the value of an employee’s personal use of the vehicle as a taxable fringe benefit.


Revenue Procedure 2009-12, issued by the Service on Wednesday, specifies that the maximum permissible fair market value of vehicles eligible for the cents-per-mile valuation rule is $15,000 for passenger automobiles and $15,200 for trucks and vans. For employers using the fleet-average valuation rule, the limit is $19,900 for both categories of vehicles. The limits are for vehicles first made available to employees for personal use in calendar year 2009.


The cents-per-mile valuation rule is described in Treas. Reg. § 1.61-21(e). Employers that cannot use this method because the fair market value of the vehicle exceeds the maximum allowable amount can use the general valuation rules in Treas. Reg. § 1.61-21(b), the annual lease value rule in Treas. Reg. § 1.61-21(e), or the commuting valuation rule in Treas. Reg. § 1.61-21(f). Under the cents-per-mile rule, for vehicles (1) that the employer regularly expects will be used in the employer’s trade or business throughout the calendar year or (2) that are driven at least 10,000 miles in the calendar year and are used primarily by employees, the taxable benefit from personal use of a vehicle is the standard mileage rate (55 cents per mile for 2009) multiplied by the number of miles driven by an employee for personal purposes. Fair market value of the vehicle is determined as of the date on which it is made first available to any employee, and the limits are set by reference to maximum recovery deductions under IRC § 280F.


The limits also are adjusted annually—usually for inflation, but this year for deflation in an automotive component of the Consumer Price Index. For 2008, the limits were $15,400 for cars and $16,700 for trucks and vans under the cents-per-mile method and $19,900 and $20,800, respectively, under the fleet-average valuation rule (Rev. Proc. 2008-13).



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