The IRS has announced that they have again delayed the effective date of Revenue Ruling 2006-57, originally released in November 2006.
The Ruling provides guidance to employers on the use of items like smartcards, debit or credit cards to provide qualified transportation fringes under Internal Revenue Code §§ 132(a)(5) and 132(f). The basic idea behind the Ruling is to allow employers to grant employees certain Smartcards, travel debit cards, etc. as a fringe benefit which would not be included as gross income (this is a good thing).
The effective date was originally planned for January 1, 2008 but was delayed last year until January 1, 2009. It has now been delayed until January 1, 2010. Ahh, bureaucracy… don’t you love it?
To be fair, it’s not the IRS’ fault. Last year, the IRS realized that “certain transit systems” (I don’t know which ones but I have my guesses) needed additional time to modify their technology and make it compatible with the requirements for vouchers in the Regs. The problem is that there are not restrictions on many of the cards that allow for transit only fare purchases to be recorded – the IRS more or less wants to ensure that the fare cards are only used for fares. Fares would include local and suburban commuter passenger transport; passenger railway; bus lines (not including charters and tours); and transportation service. Sounds simple enough, right? Not quite. A year later, those “certain transit systems” are still not ready.
So, get moving “certain transit systems”… You’re being shown up by the IRS!
(Note to grammar sticklers: Hubby and I debated for quite some time whether to use “showed up” or “shown up” – the Urban Dictionary says “shown up.” I live in the City, I went with the Urban Dictionary.)
