IRS Announces 2009 Standard Mileage Rates

WASHINGTON (LAWFUEL) — The Internal Revenue Service today issued the 2009 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2009, the standard mileage rates for the use of a car (also vans, pickups, or panel trucks) will be:

55 cents per mile for business miles driven
24 cents per mile driven for medical or moving purposes
14 cents per mile driven in service of charitable organizations
The new rates for business, medical and moving purposes are slightly lower than rates for the second half of 2008 that were raised by a special adjustment mid-year in response to a spike in gasoline prices. The rate for charitable purposes is set by law and is unchanged from 2008.

The business mileage rate was 50.5 cents in the first half of 2008 and 58.5 cents in the second half. The medical and moving rate was 19 cents in the first half and 27 cents in the second half.

The mileage rates for 2009 reflect generally higher transportation costs compared to a year ago, but the rates also factor in the recent reversal of rising gasoline prices. While gasoline is a significant factor in the mileage rate, other fixed and variable costs, such as depreciation, enter the calculation.

The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs as determined by the same study. Independent contractor Runzheimer International conducted the study.

A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for any vehicle used for hire or for more than four vehicles used simultaneously.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

Revenue Procedure 2008-72 contains additional information on these standard mileage rates.


Weil Gotshall are among the front runners to do the heavy legal lifting if one of the big auto companies files for Chapter 11.

Auto

Should one of Detroit’s Big Three auto manufacturers go bankrupt, it will be among the largest Chapter 11 filings in U.S. history. So who are the likely candidates for the assignment? The Am Law Daily interviewed several leading restructuring lawyers–most on the condition that they not be named–to find out.

The apparent early frontrunner for landing a Big Auto Chapter 11 assignment is New York’s Weil, Gotshal & Manges. Long a mainstay in the bankruptcy field through the founding partner of its practice, Harvey Miller, the firm also counts General Motors as a longtime client. (Miller and several other Weil restructuring partners did not respond to requests for comment.)

Several lawyers interviewed for this story say that Weil has the client relationship, pedigree, and size necessary to take on a potential GM filing. The bevy of high-profile Chapter 11 clients that Weil already has under its belt includes Enron, WorldCom, Global Crossing, Lehman Brothers, and as of today giftware maker Lenox Group.

“There aren’t that many firms that have the debtor capacity to represent [one of the Big Three],” says Mark Bane, cohead of the bankruptcy and business restructuring group at Ropes & Gray. “You would need such an enormous number of bankruptcy lawyers that many of the firms that are significant players would be precluded just by nature of their size limitations.”

Bane says that his own department, which numbers about 30 lawyers, doesn’t have the manpower necessary to take on a Big Three bankruptcy without abandoning the firm’s current clients and restricting its ability to take on new representations.

It’s uncertain whether a potential Big Three bankruptcy might present a similar problem for Weil–and how the firm would manage to juggle its Lehman, Lenox, and other client obligations in the event of such a resource-draining retention. That’s especially true given that it’s unclear whether a potential Big Three filing would proceed on a liquidation track (a la Lehman) or as an infinitely more complicated corporate restructuring.

“It’s one thing when you’re running a liquidation-mode case,” Bane says. “It’s intensive and it’s large. But it’s not the same challenge as keeping a company going and the myriad challenges you have regarding the different dimensions of a company’s operations in Chapter 11.”

Some lawyers say that Weil or any firm taking on a complex Big Three bankruptcy would likely have to rely heavily on local counsel.

Detroit’s Honigman Miller Schwartz and Cohn has historically been GM’s local counsel; the auto giant has often tapped the firm for supply chain management and insolvency issues. (The firm’s GM liaison partner, Robert Weiss, did not return a phone call requesting comment.)

Bane says that besides Weil, firms like Kirkland & Ellis, Willkie Farr & Gallagher, and Skadden, Arps, Slate, Meagher & Flom come to mind as having the appropriate capacity and expertise to handle a Big Three bankruptcy.

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