joeu2004[at]hotmail.com wrote:
- quote -

See reply from LoTax for your answer. It's the 132 regs. I
have no idea why the site you reference says what it says.
If you want to know, I advise you to contact them at
1-925-422-9955.

--
Alan
http://taxtopics.net

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

LLNL is the Livermore Labs (i.e. not the IRS) and I'm not
sure the FAQ of their transportation reimbursement plan
reflect accurately the rules for transpartation
reimbursement plans found in Treasury's section 132
regulations. It seems that in places they don't reflect
those rules....

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

LoTax wrote:
- quote -

Fascinating. Obviously I should go read the Regs.

I thought a *.gov web site would correctly reflect
what the law permits. But first, the law might be
more flexible on this point than I expected. And
second, I neglected to see that LLNL is simply the
Lawrence Livermore lab, run by the U of Calif,
albeit technically part of the DoE. Its FAQ merely
reflect its own policies.

Thanks to you and Alan for raising my suspicions.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

A.G. Kalman wrote:
- quote -

Which is what I am interested in.

- quote -

Fine. I am not interested in IRC 125 for the purpose
of my question. I mentioned it only to explain why
I was surprised by the llnl.gov FAQ statement (below).
I realize that different code sections can have
different semantics.

- quote -

Are you referring to the regs for IRC 125 (which
I do not care about) or for IRC 132, which is what
I am asking about?

If the latter, how does your finding jibe with
this statement from the llnl.gov FAQ, cited above:

"Any unused amounts contributed to a pretax
transportation reimbursement account will be
returned to the employee at the end of the year.

"However, any returned amounts would be subject
to tax withholding since they were contributed
to their account on a pretax basis."

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << It may not be relied upon for the purpose of avoiding > << penalties that may be imposed on the taxpayer or the > << tax preparer. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

joeu2004[at]hotmail.com wrote:

- quote -

I think the general rule is that an employer may allow a
benefitted employee to "carry over" an unused portion of a
month's election.

Here's the Q&A from the section 132 regs:

Q-15. May an employee whose qualified transportation fringe
costs are less than the employee's compensation reduction
carry over this excess amount to subsequent periods?

A-15. (a) Yes. An employee may carry over unused
compensation reduction amounts to subsequent periods under
the plan of the employee's employer.
(b) The following example illustrates the principles of
this

Q/A-15:
Example. (i) By an election made before November 1 of a year
for which the statutory monthly mass transit limit is $65,
Employee E elects to reduce compensation in the amount of
$65 for the month of November. E incurs $50 in
employee-operated commuter highway vehicle expenses during
November for which E is reimbursed $50 by Employer R, E's
employer. By an election made before December, E elects to
reduce compensation by $65 for the month of December. E
incurs $65 in employee-operated commuter highway vehicle
expenses during December for which E is reimbursed $65 by R.
Before the following January, E elects to reduce
compensation by $50 for the month of January. E incurs $65
in employee-operated commuter highway vehicle expenses
during January for which E is reimbursed $65 by R because R
allows E to carry over to the next year the $15 amount by
which the compensation reductions for November and December
exceeded the employee-operated commuter highway vehicle
expenses incurred during those months.

(ii) In this Example, because Employee E is reimbursed in an
amount not exceeding the applicable statutory monthly limit,
and the reimbursement does not exceed the amount of
employee-operated commuter highway vehicle expenses incurred
during the month of January, the amount reimbursed ($65) is
excludable from E's wages for income and employment tax
purposes.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << It may not be relied upon for the purpose of avoiding > << penalties that may be imposed on the taxpayer or the > << tax preparer. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

joeu2004[at]hotmail.com wrote:

- quote -

The pretax transportation deduction you reference comes
under IRC 132 as a qualified transportation fringe benefit.
As such, it does not fall under the cafeteria plan rules
(IRC Sec. 125). This is not part of what most of know as a
flexible spending plan (FSA). Therefore, there are a
different set of rules. The regulations do not allow an
employer to refund any unused amounts. However, the regs do
allow the employer to allow you to rollover to the next year
any unused amount.

By the way... Sec. 132 also allows an employer to include a
benefit for parking which can be up to $195 month.

--
Alan
http://taxtopics.net

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << It may not be relied upon for the purpose of avoiding > << penalties that may be imposed on the taxpayer or the > << tax preparer. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

joeu2004[at]hotmail.com wrote:

- quote -

The pretax transportation deduction you reference comes
under IRC 132 as a qualified transportation fringe benefit.
As such, it does not fall under the cafeteria plan rules
(IRC Sec. 125). This is not part of what most of know as a
flexible spending plan (FSA). Therefore, there are a
different set of rules. The regulations do not allow an
employer to refund any unused amounts. However, the regs do
allow the employer to allow you to rollover to the next year
any unused amount.

By the way... Sec. 132 also allows an employer to include a
benefit for parking which can be up to $195 month.

--
Alan
http://taxtopics.net

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << It may not be relied upon for the purpose of avoiding > << penalties that may be imposed on the taxpayer or the > << tax preparer. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

According to the FAQ at
http://www.llnl.gov/llnl/02employmen.../pretaxfaq.htm
there is a limit of $100 per month for the pretax
transportation deduction.

Assuming a person can afford the reduced cash flow,
why not take the maximum?

According to the FAQ, if you use less in a month,
the excess set-aside cannot be added to the next
month. In effect, you "lose" the unused amount.

But also according to the FAQ, at the end of year,
all unused set-aside funds will be returned as
income. That seems to be unlike the pretax medical
deduction as I remember it, whereby any unused
set-aside funds are "lost" -- not returned to you.

(Or did the law for the pretax med deduction change
in that respect?)

So the only downside of setting aside the maximum
amount ($100 per month) for the pretax transportation
deduction seems to be a deferral of taxable income.

As long as someone can afford the deferral of income,
there does not seem to be any real downside. And the
upside is that we are assured of maximizing the use
of pretax dollars.

Right?

PS: Is the pretax transportation deduction explained
in full -- not just an FAQ -- in some federal online
document, like an IRS Pub?

I have done both a google search and a search of the
IRS Forms & Pub website, to no avail. In fact, the
IRS search results seem to be a misdirection, pointing
to Misc Deductions, not pretax deductions :-(.

I know I can look at IRC sec 132 and any corresponding
IRR regulation. But I am asking for someone else who
is not accustomed to reading law.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << It may not be relied upon for the purpose of avoiding > << penalties that may be imposed on the taxpayer or the > << tax preparer. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >