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I N T E R O F F I C E M E M O R A N D U M
Date: 12-Jan-1996 01:49pm EST
From: DEMPSED DEMPSEY
DEMPSED DEMPSEY@3=IBMMAIL@2=IBMX400@1=US@MRX_MCI@USTEL3@USX3
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TO: See Below
Subject: Washington Status Report
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To: HewittLink Clients
From: Hewitt Associates LLC
. Research Staff
Subject: Washington Status Report
WASHINGTON STATUS REPORT
JANUARY 15, 1996
BUSINESS EXPENSE REIMBURSEMENT
The standard mileage rate recognized by the IRS for the operation of a
passenger automobile for business purposes will increase to 31 cents per mile
in 1996 (from 30 cents per mile in 1995). This is the rate used by employees
and self-employed individuals in computing tax-deductible business expenses.
The rate for use of an automobile for charitable purposes stays at 12 cents,
and the rate for use of an automobile to obtain medical care or as part of
moving expenses increases to 10 cents in 1996 (from 9 cents in 1995).
This same announcement (Revenue Procedure 95-54) also provides the rules under
which expenses of local travel or transportation away from home, paid by an
employee but reimbursed by an employer, are deemed to be substantiated for IRS
purposes.
Separately, in Notice 95-67 issued in late December, the IRS said there will
be a delay in the announcement of 1996 per diem rates. These are rates that
businesses may use to reimburse employee expenses for business travel and that
employees and self-employed individuals may use for substantiating such
expenses to claim business travel expense deductions.
IRS PROCEDURES
On January 5, the IRS released a set of revenue procedures (Revenue Procedure
96-1 through 96-8) updating the procedures related to letter rulings,
determination letters, etc. In particular, Revenue Procedure 96-6 provides
for a new Schedule Q for the Form 5300 to demonstrate compliance with
nondiscrimination requirements. However, the new Schedule Q has not yet been
released by the IRS, and there is no time estimate yet for its availability.
Also, Revenue Procedure 96-8 provides a new schedule of user fees.
ESTIMATED INCOME TAX PAYMENTS FOR INDIVIDUALS
On January 9, the IRS announced an extension of time for individual taxpayers
in 15 states affected by the extreme winter weather, for the payment of fourth
quarter estimated income taxes. For these taxpayers, the estimated tax payment
otherwise payable by January 16 will be due on January 22 instead. (The
extension does not apply to corporations and other business entities.)
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