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Washington, D.C.--With gas prices reaching record highs, the leader of the National Treasury Employees Union (NTEU) today urged the Internal Revenue Service (IRS) to make a mid-year adjustment to the reimbursement rate for personal use of a vehicle for business reasons.
High gas prices are “placing an especially hard burden on those who must drive their own vehicle to perform their official work duties, including many employees of the IRS, FDIC and other agencies of the federal government,” NTEU National President Doreen Greenwald wrote in a letter to IRS Chief Executive Officer Frank Bisignano.
While the standard business mileage rate is normally established by the IRS at the beginning of each calendar year, the IRS has made mid-year adjustments three times since 2000, most recently in 2022. The average cost of fuel in January 2026—when the current rate was set—was $2.81 a gallon. Today, it has jumped to $4.56 a gallon.
“The current conditions warrant such action,” Greenwald said.
The federal government’s reimbursement rate is set by the General Services Administration (GSA), but cannot exceed the amount set by the IRS as the maximum rate allowed as a business deduction. That rate currently is 0.725 cents per mile.
“This is a matter of fairness and basic equity for all Americans,” Greenwald wrote. “Failing to increase the rate in response to rising fuel costs shifts unreimbursed business expenses onto employees and creates unnecessary financial strain for all workers who must rely on their cars to perform their jobs, including federal employees.”