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FFF ~ ~ <br />Employer-Provided Vehicle <br />If an employer provides a vehicle which is used exclusively for business purposes (except for <br />allowable de minimis use, discussed later) there are no tax consequences or reporting. Business <br />use does not include commuting (except as discussed later). Records should be maintained to <br />substantiate that all vehicle use was for business. <br />Employer Vehicle Used for Both Business and Personal Use <br />If an employer-provided vehicle is used for both business and personal purposes, substantiated <br />(see Substantiation Requirements, below) business use is not taxable to the employee. Personal <br />use is taxable to the employee as wages. The employer can opt to include all use as wages; <br />however, the employee can pay the employer for personal use rather than having it treated as <br />wages. Reg. ~' 1.61-21(c) <br />What is Personal Use? <br />The following are examples of taxable personal use of anemployer-provided vehicle: <br />Commuting between residence and work station. <br />Vacation, weekend use, or use by spouse or dependents. <br />The employee goes into his office on the weekend. This is personal commuting, <br />regardless of whether it is required by the employer. Reg. X1.162-2(e) <br />Examples of De Minimis Nontaxable Personal Use <br />• Small personal detour while on business, such as driving to lunch while out of the <br />office on business. <br />• Infrequent (not more than one day per month) commuting in employer vehicle. This <br />does not mean that an employee can receive excludable reimbursements for <br />commuting 12 days a year. The rule is available to cover infrequent, occasional <br />situations. Reg. ~ 1.132-6(d)(3) <br />Example: An employee uses a motor pool vehicle for a business meeting. The employer <br />requires that motor pool vehicles be returned at the end of the business day, but the <br />employee is delayed and ±he motor pool is closed when the employee arrives back at the <br />office. The employee takes the vehicle home and returns it the next morning. <br />Assuming that this is an infrequent occurrence for that employee (generally happening no <br />more than once a month) the commuting value of the trip would be considered a <br />nontaxable de minimis fringe benefit. If not an infrequent occurrence, the commuting <br />would be taxable to the employee. <br />Substantiation Requirements <br />48 <br />