"As you know, gasoline prices are reaching record levels, and all indications are that prices will stay at that level or rise during the summer months and even to the end of the calendar year," said Kelley in her letter. "This is placing an especially hard burden on those who must drive to perform their work duties including many employees of the IRS and other agencies of the federal government. The federal government's mileage reimbursement rate is set by the General Services Administration. But that rate may not exceed the amount set by the IRS as the maximum amount allowed to be deducted as a business expense."

Typically the IRS sets a new standard mileage rate in late fall, with that rate to be effective January 1 of the following year, however there have been circumstances in the past that have triggered mid-year adjustments. For example, the rate was increased in the summer of 2005 due to high increases in gasoline prices.

Gasoline is one of several factors that play into the calculation of the annual standard mileage rate. An independent contractor, Runzheimer International, makes the calculation each year for the IRS, taking into consideration gasoline prices, costs of vehicles, insurance, and maintenance, and other related costs.

Kelley points out that the current standard mileage rate of 48.5 cents per mile is the same as it was in late 2005 when the cost of gasoline was not as high as it is today. The federal Energy Information Administration and the American Automobile Association are both citing gas prices at over $3.00 per gallon and have indicated that prices are expected to increase.

The NTEU represents over 150,000 employees in 31 federal agencies and departments.

Firozali A Mulla , 22 June 2007 @ 07:50 AM  IRS has been asked to consider mid-year increase to standard mileage rate When I read anything to compare the men power put in and the price of oil my PC gives hiccups. Let me elaborate. The oil that is uses to manufacture any product is channeled in R&D or the running cost or the stock. How on earth can you put a mileage on the petrol consumption? If this is true for USA then China with millions of bicycles is rich as they do not use petrol. Is that what you are telling me sir? The consumption of petrol is good on the rich. Sir, tax the poor they become poorer. Period and then to state that the MANPOWER IS THE BRAIN Drain, right I agree. I do not want to pay the tax on the car I do not have, I do not use and have never seen. I thank you Firozali A.Mulla MBA PhD P.O.Box 6044 Dar-Es-Salaam Tanzania East Africa