Home Media Center News Releases

Washington, D.C.—The leader of the nation’s largest independent union of federal workers today acknowledged the small gesture by the Internal Revenue Service in raising the mileage reimbursement rate allowed as a business expense tax deduction from 40.5 cents a mile to 48.5 cents but maintained that it “simply isn’t enough.”

The move by the IRS comes in the wake of a letter sent by President Colleen M. Kelley of the National Treasury Employees Union (NTEU) to IRS Commissioner Mark Everson urging the tax agency to provide relief to those employees—both public and private sector, including federal employees—who use their personal cars during the course of their jobs.

“Staggering increases in the price of gas are having serious ripple effects throughout the economy and forcing employees to dip into their own packets to cover the costs of fuel,” said President Kelley. “This is an untenable situation for these workers.”

Kelley said that NTEU continues to support legislation being developed by Sen. Charles Schumer (D-NY)—and a companion House bill being developed by Rep. John Lewis (D-GA), Ranking Member of the House Ways and Means Oversight Subcommittee—that would boost the rate to 60 cents a mile and would be effective through 2006.

The Schumer proposal would instruct GSA to raise its rate to match that of the IRS; it also would provide the mileage deduction rate for business, medical, moving and charity purposes—a particularly important factor in light of the hurricane’s impact across a large portion of the U.S. Gulf Coast.

In her letter, Kelley called on the IRS to raise the maximum rate from its 40.5 cents a mile level. Today the IRS announced an increase to 48.5 cents a mile.

“An increase of eight cents a mile, while better than leaving the reimbursement rate untouched, falls far short of what needs to be done to help people who must travel to perform the duties of their jobs,” the NTEU leader said. The IRS said the higher rate will be in effect through the end of this year.

Kelley also said that she has learned from the General Services Administration (GSA) that the agency will raise its reimbursement rate to match the new IRS rate promptly, something GSA traditionally has done but is not obligated to do under the law.

NTEU is the largest independent federal union, representing 150,000 employees in 30 agencies and departments.