Human resources managers will want to studyseveral new IRS rulings on non-cash benefits to commutingemployees. The IRS has delved deeply into various systems forassisting workers with commuting costs with the intention ofdetermining whether these forms of assistance should be included inthe employees' gross income.

In essence, the IRS is examining a transition from paper transitvouchers to virtual vouchers. The conundrum here has to do with themedia itself. The paper transit vouchers of old were handed out (orpaid for) by employers, and employees could only use them for masstransit purposes. While some were perhaps using them for personal travel as well, the system itself wasa simple one.

With the advent of smartcards and debit cards as transit passreplacements for the paper tickets, the system became more complex.In a new notice, the IRS lays out which transactions it willinclude in employee gross income, and which will be excluded. Keyfactors include how strict the rules are for limiting thesmart/debit card purchases to transit only.

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Dan Cook

Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.