SECTION 3. DEFINITIONS

.01 Standard mileage rate . The term “standard mileage rate” means the amount the Service provides for optional use by taxpayers to substantiate the amount of—

(1) Deductible costs of operating for business purposes automobiles (including vans, pickups, or panel trucks) they own or lease, and

(2) Deductible costs of operating automobiles for charitable, medical, or moving expense purposes.

.02 Transportation expenses . The term “transportation expenses” means the expenses of operating an automobile for local transportation or transportation away from home.

.03 Mileage allowance . The term “mileage allowance” means a payment under a reimbursement or other expense allowance arrangement that is—

(1) Paid for the ordinary and necessary business expenses an employee incurs, or that the payor reasonably anticipates an employee will incur, for transportation expenses in performing services as an employee,

(2) Reasonably calculated not to exceed the amount of the expenses or anticipated expenses, and

(3) Paid at the applicable standard mileage rate, a flat rate or stated schedule, or under any other Service-specified rate or schedule.

.04 Flat rate or stated schedule . A mileage allowance is paid at a flat rate or stated schedule if it is paid on a uniform and objective basis for the expenses de

2010–51 I.R.B. 884 December 20, 2010

.03 Charitable or medical and moving standard mileage rate in lieu of variable expenses . A deduction computed using the applicable standard mileage rate for charitable, medical, or moving expense miles is in lieu of a deduction for variable expenses (including gasoline and oil) of the automobile allocable to those purposes. Costs for items such as depreciation or lease payments, insurance, and license and registration fees are not deductible for these purposes and are not included in the charitable or medical and moving standard mileage rates.

.04 Parking fees, tolls, interest, and taxes . A taxpayer may deduct, as separate items, parking fees and tolls attributable to the use of the automobile for charitable, medical, or moving expense purposes. Interest relating to the purchase of the automobile and state and local personal property taxes are not deductible as charitable, medical, or moving expenses, but they may be deducted as separate items to the extent allowable under § 163 or § 164.