Branscome: Hello, everybody.  I'm Theresa Branscome from the Internal Revenue Service.  Today we're going to talk about an increase in the standard mileage rates, and here to talk to us about this is Eric Smith.  He's a spokesman at the IRS.  Thank you for joining us, Eric.   

Smith: Good to be with you, Theresa.   

Branscome: How much is the increase?   

Smith: Well, it's 8 cents a mile, Theresa, and that means for business use of an automobile, the rate is going from 50.5 cents a mile to 58.5 cents a mile.  So, for the first half of 2008, you'll use the figure of 50.5 cents a mile, and then effective July the 1st, it increases to 58.5 cents a mile.   

Branscome: Is 8 cents a big increase?   

Smith: You know, Theresa, it really is. A few years ago, it rose by 8 cents a mile at another time when gas prices were rising quickly.  But usually the rate increases -- Usually the increases are much smaller.   

Branscome: Okay.  Why is the IRS increasing it by that much now?   

Smith: Well, we recognize that the gas prices are having a real impact on taxpayers, and we really want to be fair to everyone.  We want to make sure that the standard mileage rate reflects the actual cost of operating an automobile, so that's why we took this unusual step under these extraordinary circumstances.   

Branscome: Isn't it kind of early in the year for the IRS to adjust the standard mileage rates?   

Smith: Well, you know, it really is, Theresa.  We usually announce the standard mileage rate in November, and then the new rate takes effect on January 1st, and then it's in effect for the entire year.  So, it's a once-a-year deal.  This is an unusual situation, so we took this unusual step of making a change in the middle of the year.   

Branscome: All right.  Who is affected by the standard mileage rate?   

Smith: The standard mileage rate is used by people who are operating a car for business.  So if you drive a car for basically anything other than commuting, you may be able to take advantage of the standard mileage rate or the business use of your car deduction.  Self-employed people take it, employees -- people working for somebody else -- also take it.  And it can really help you save money on your taxes if you drive many miles a year for your work.   

Branscome: What if you want to calculate the actual costs of operating your vehicle?  Are you allowed to do that?   

Smith: You are allowed to do that.  In all cases, you can do that.  You can keep track of your depreciation -- gas, oil, tires, maintenance, insurance, those kinds of expenses -- and you can take your deduction based on that, or you can use the standard mileage rate based on the actual miles driven for business use.   

Branscome: If taxpayers want more information about this, is there a publication?   

Smith: The IRS does have a publication.  It's a very good one.  It's number 463 -- "Travel, Gift, and Entertainment Expenses" -- and you can find it right here on this website.   

Branscome: What about the mileage rate for moving or going to the doctor?   

Smith: Those rates have gone up, as well, Theresa.  They've risen by 8 cents a mile, as well.  And the new rate is 27 cents a mile.  So it's 19 cents a mile from January 1st to June 30th, 27 cents a mile from July 1st to December 31, 2008.   

Branscome: What about if you use your car for charitable organizations?   

Smith: If you do volunteer work for charity or are involved with a charitable organization in some way, the rate is 14 cents a mile, and it remains unchanged.   

Branscome: Why is that?   

Smith: Well, that rate is set by law.  Congress set that up several years ago, and so at this point, it's not changing.   

Branscome: Okay. The IRS does not have control over that.   

Smith: That's right.   

Branscome: Okay.  Well, Eric, thanks for this information.   

Smith: Good to be with you, Theresa.   

Branscome: And thank you all for joining us.  I'm Theresa Branscome.  You can read more about the standard mileage rates on the IRS' official website, www.irs.gov.