Substantiation Requirements and Qualified Nonpersonal Use Vehicles, 95727-95731 [2024-28040]

Agencies

• Internal Revenue Service
• DEPARTMENT OF THE TREASURY

[Federal Register Volume 89, Number 232 (Tuesday, December 3, 2024)]
[Proposed Rules]
[Pages 95727-95731]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-28040]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-106595-22]
RIN 1545-BQ83


Substantiation Requirements and Qualified Nonpersonal Use 
Vehicles

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This document sets forth proposed regulations relating to the 
definition of qualified nonpersonal use vehicles. Qualified nonpersonal 
use vehicles are excepted from the substantiation requirements that 
apply to certain listed property. These proposed regulations add 
unmarked vehicles used by firefighters or members of a rescue squad or 
ambulance crew as a new type of qualified nonpersonal use vehicle. 
These regulations affect governmental units that provide firefighter or 
rescue squad or ambulance crew member employees with unmarked qualified 
nonpersonal use vehicles and the employees who use those vehicles.

DATES: Written or electronic comments and requests for a public hearing 
must be received by March 3, 2025.

ADDRESSES: Commenters are strongly encouraged to submit public comments 
electronically via the Federal eRulemaking Portal at https://www.regulations.gov (indicate IRS and REG-106595-22) by following the 
online instructions for submitting comments. Requests for a public 
hearing must be submitted as prescribed in the ``Comments and Requests 
for a Public Hearing'' section. Once submitted to the Federal 
Rulemaking Portal, comments cannot be edited or withdrawn. The 
Department of the Treasury (Treasury Department) and the IRS will 
publish for public availability any comment submitted electronically or 
on paper, to the IRS's public docket. Send paper submissions to 
CC:PA:01:PR (REG-106595-22), Room 5203, Internal Revenue Service, P.O. 
Box 7604, Ben Franklin Station, Washington, DC 20044.

FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, 
Stephanie Caden at (202) 317-4750; concerning submissions of comments 
or requests for a public hearing, the Publications and Regulations 
section by email at [email protected] (preferred) or (202) 317-
6901 (not toll-free numbers).

SUPPLEMENTARY INFORMATION: 

Authority

    This notice of proposed rulemaking contains proposed regulations 
issued under the authority granted to the Secretary of the Treasury or 
her delegate (Secretary) by sections 274(p) and 132(o) of the Internal 
Revenue Code (Code) that would amend the Income Tax Regulations (26 CFR 
part 1) under sections 274(i) and 132(d) related to qualified 
nonpersonal use vehicles. Section 274(p) provides the Secretary with an 
express grant of regulatory authority with respect to section 274 as 
the Secretary may deem necessary to carry out the purposes of that 
section. Section 132(o) provides the Secretary with an express grant of 
regulatory authority with respect to section 132 to prescribe such 
regulations as may be necessary or appropriate to carry out the 
purposes of that section. In addition, section 7805(a) authorizes the 
Secretary to prescribe all needful rules and regulations for the 
enforcement of the Code.

Background

    In general, section 274 limits or disallows deductions for certain 
expenditures that otherwise would be allowable under chapter 1 of the 
Code, primarily under section 162(a), which allows a deduction for 
ordinary and necessary expenses paid or incurred during the taxable 
year in carrying on any trade or business.
    Section 274(d), as relevant to these proposed regulations, provides 
that a taxpayer is not allowed a deduction or credit for certain 
expenses unless the expenses are substantiated by adequate records or 
by sufficient evidence corroborating the taxpayer's own statement as to 
the amount, time and place, business purposes of the expenditure, and 
the business relationship to the taxpayer of the person receiving the 
benefit. These substantiation requirements apply to expenses incurred 
in the use of any listed property, as defined in section 280F(d)(4), 
which includes any passenger automobile and any other property used as 
a means of transportation.
    In 1985, Congress modified section 274(d) and added section 274(i), 
creating an exception from the substantiation requirements for 
qualified nonpersonal use vehicles. Public Law 99-44 2, 99 Stat. 77 
(1985). Section 274(i) provides that the term ``qualified nonpersonal 
use vehicle'' means any vehicle, which by reason of its nature, is not 
likely to be used more than a de minimis amount for personal purposes.
    Both the business and personal use of an employer-provided vehicle 
that is a qualified nonpersonal use vehicle under section 274(i) 
qualifies under section 132(d) as a working condition fringe benefit 
that is excluded from the employee's income. Thus, if an employer 
provides an employee with a qualified nonpersonal use vehicle, the 
employee does not need to keep records of how the vehicle is used, and 
the total use of the vehicle is excluded from the employee's income as 
a working condition fringe benefit under section 132(d). See Sec. Sec.  
1.132-5(h) and 1.274-5(k).
    The legislative history to section 274(i) includes examples of 
qualified nonpersonal use vehicles such as school buses, qualified 
specialized utility repair trucks, qualified moving vans, clearly 
marked police and fire vehicles, and unmarked law enforcement vehicles. 
H.R. Rep. No. 99-67, at 16 (1985) (Conf. Rep.). The legislative history 
indicates that Congress intended the IRS and the Treasury Department to 
expand the list to include other vehicles that, by reason of their 
nature, are highly unlikely to be used more than a very minimal amount 
for personal purposes. H.R. Rep. No. 99-34, at 11 (1985).
    Temporary Regulations Sec.  1.274-5T(k) and (l) were issued in 
1985, identifying categories of qualified nonpersonal use vehicles and 
providing definitions (by cross reference) of terms such as 
``automobile,'' ``vehicle,'' and ``personal use.'' TD 8061, 50 FR 
46006, 46033, and 46036. Police and fire vehicles that are clearly 
marked and law enforcement vehicles that are unmarked were included as 
categories of qualified nonpersonal use vehicles. However, clearly 
marked vehicles provided to Federal, State, and local government 
workers who respond to emergency situations as public safety officers 
but

[[Page 95728]]

who are not employed by either a fire department or police department 
were not included as qualified nonpersonal use vehicles.
    In 2008, proposed regulations were issued to incorporate the text 
of Sec.  1.274-5T(k) and add clearly marked public safety officer 
vehicles as a new type of qualified nonpersonal use vehicle. 73 FR 
32500. An example illustrating the application of the rules to a 
clearly marked public safety officer vehicle was included at Sec.  
1.274-5(k)(8) as Example 3.
    In 2010, final regulations were published adding clearly marked 
public safety officer vehicles to the list of qualified nonpersonal use 
vehicles. TD 9483, 75 FR 27934 (current regulations). As a result, 
emergency responders who are provided a clearly marked vehicle receive 
the same tax treatment whether they work for the police department, 
fire department, or other governmental unit, or any agency or 
instrumentality thereof.

Explanation of Provisions

    The Treasury Department and the IRS have become aware that certain 
emergency responders not covered by the current regulations are 
provided unmarked vehicles by a governmental unit or an agency or 
instrumentality thereof (governmental unit). In particular, 
stakeholders have commented that fire chiefs or members of rescue 
squads or ambulance crews who, when not on a regular shift, need to be 
on call at all times to respond to emergencies will often be assigned 
unmarked command vehicles to travel safely and quickly to a scene and 
perform emergency services. While the authorized use of unmarked 
vehicles by law enforcement officers employed on a full-time basis by a 
governmental unit that is responsible for the prevention or 
investigation of crime involving injury to persons or property 
(including apprehension or detention of persons for such crimes) 
satisfies the current regulations governing qualified nonpersonal use 
vehicles, the use of unmarked vehicles provided to firefighters or 
members of a rescue squad or ambulance crew does not satisfy the 
current regulations.
    Section 274(i) defines a qualified nonpersonal use vehicle as one 
which, by reason of its nature, ``is not likely to be used more than a 
de minimis amount for personal purposes.'' The current regulations 
define qualified nonpersonal use vehicles to include clearly marked 
police, fire, or public safety officer vehicles that are owned or 
leased by a governmental unit and required to be used for commuting by 
a police officer, firefighter, or public safety officer (as defined in 
section 402(l)(4)(C)) who, when not on a regular shift, is on call at 
all times. Any personal use (other than commuting) of the vehicle 
outside the limit of the police officer's arrest powers or the 
firefighter's or public safety officer's obligation to respond to an 
emergency must be prohibited by the governmental unit. See Sec.  1.274-
5(k)(2)(ii)(A) and (k)(3). The various examples included in Sec.  
1.274-5(k)(8) illustrate that a prohibition on personal use (other than 
commuting) is intended to exist in situations where both commuting and 
only de minimis personal use, such as personal errands, are permitted.
    The current regulations also define qualified nonpersonal use 
vehicles as including unmarked law enforcement vehicles owned or leased 
by Federal, State, county, or local governmental agencies or 
departments that officially authorize the business and personal use of 
the vehicle by law enforcement officers whom they employ, provided any 
personal use is incidental to law enforcement functions. See Sec.  
1.274-5(k)(2)(ii)(R) and (k)(6). The regulations define law enforcement 
officers as individuals who are employed on a full-time basis by a 
governmental unit that is responsible for the prevention or 
investigation of crime involving injury to persons or property 
(including apprehension or detention of persons for those crimes), who 
are authorized by law to carry firearms, execute search warrants, and 
to make arrests (other than merely a citizen's arrest), and who 
regularly carry firearms (except when it is not possible to do so 
because of the requirements of undercover work). See Sec.  1.274-
5(k)(6)(ii). Unmarked law enforcement vehicles allow law enforcement 
officers to operate inconspicuously, e.g., so that they can conduct 
these duties while performing undercover work.
    Historically, firefighters and rescue squad and ambulance crew 
members were provided with vehicles that had markings to indicate their 
status as emergency response vehicles. More recently, the IRS and 
Treasury Department have become aware that some governmental units are 
assigning these emergency responders unmarked vehicles due to increased 
incidents of harassment of first responders and vandalism of clearly 
marked fire and emergency vehicles and equipment.
    Generally, fire and emergency response departments retain the title 
to the unmarked vehicles and maintain policies that limit the use of 
the vehicles for personal, non-work purposes. Because firefighters and 
members of a rescue squad or ambulance crew respond to a wide variety 
of emergencies at all hours, including fires, medical crises, vehicular 
accidents, natural disasters, and terrorist attacks, these vehicles 
typically are specially equipped to allow firefighters and members of 
rescue squads or ambulance crews who, even when not on a regular shift, 
are on call at all times to travel safely and efficiently to the scene 
of an emergency and provide emergency services. Onboard equipment may 
include lights and sirens, medical emergency equipment, life-saving 
devices such as defibrillators, and radios that assist firefighters, 
rescue squads, or ambulance crews in communicating with a central 
source and other emergency response crews related, for example, to 
traffic or hospital capacity. Onboard equipment may also include items 
such as personal protective equipment (helmet, coat, boots), emergency 
oxygen tanks, reference books, and laptop computers that enable workers 
to access important information related to the emergency. Under the 
current regulations, emergency responders must substantiate all of the 
time they spend using these unmarked vehicles for work related 
purposes, and the value of any personal use of these vehicles, even if 
minimal, must be included in the employees' taxable income.
    Unmarked firefighter and rescue squad or ambulance crew vehicles 
are less likely to be utilized in undercover work than unmarked law 
enforcement vehicles. However, the use of unmarked vehicles allows 
firefighters and other emergency personnel who commute and are required 
to be on call at all times, even when not on a regular shift, to travel 
inconspicuously, thereby reducing risk of harassment and vandalism. 
Also, as described above, unmarked firefighter and rescue squad or 
ambulance crew vehicles typically are specially outfitted with onboard 
equipment, which is used by firefighters and emergency personnel to 
suppress fires, conduct rescue activities, or provide emergency medical 
services as part of an official emergency response system. Because 
these vehicles are generally specially outfitted with such equipment, 
any personal use of these vehicles is likely to be minimal. Thus, 
adding unmarked firefighter, rescue squad or ambulance crew vehicles as 
a new category of qualified nonpersonal use vehicle is consistent with 
the underlying intent of section 274(i).
    Accordingly, the proposed regulations would amend Sec.  1.274-
5(k)(2)(ii) to add unmarked vehicles used by firefighters, members of 
rescue squads, or

[[Page 95729]]

ambulance crews to the list of qualified nonpersonal use vehicles that 
are exempt from the substantiation requirements of section 274(d). In 
addition, the proposed regulations would amend Sec.  1.274-5(k) to add 
a new Sec.  1.274-5(k)(7) providing definitions for the terms 
``unmarked firefighter, rescue squad or ambulance crew vehicles'', 
``firefighter,'' and ``member of a rescue squad or ambulance crew,'' 
and add Sec.  1.274-5(k)(9)(v) (Example 5) illustrating the new 
provision.
    The proposed regulations provide that the substantiation 
requirements of section 274(d) do not apply to an unmarked firefighter, 
rescue squad, or ambulance crew vehicle that is required to be used for 
commuting by the firefighter or member of a rescue squad or ambulance 
crew, who, when not on a regular shift, is on call at all times. 
Because any personal use of an unmarked firefighter, rescue squad, or 
ambulance crew vehicle should be minimal and incidental to its main 
purpose in providing emergency services, the proposed regulations also 
provide that personal use of the vehicle, other than commuting and 
personal errands, that is outside the firefighter's or rescue squad or 
ambulance crew member's obligation to respond to an emergency must be 
prohibited by the governmental unit that owns or leases the vehicle and 
employs the firefighter or rescue squad or ambulance crew member.
    The proposed regulations define an ``unmarked firefighter, rescue 
squad, or ambulance crew vehicle'' as a vehicle, that is owned or 
leased by a governmental unit, or any agency or instrumentality 
thereof, and that is specially outfitted to allow firefighters or 
members of rescue squads and ambulance crews to travel safely and 
efficiently to the scene of an emergency and provide emergency 
services. The description of the types of special equipment found in 
the unmarked vehicles is derived from information provided by 
stakeholders requesting updates to the current regulations. The 
proposed regulations also provide that a license plate marking or 
insignia do not disqualify a vehicle from being an unmarked 
firefighter, rescue squad, or ambulance crew vehicle.
    The definition of ``firefighter'' for purposes of these proposed 
regulations, is modeled in part on the definition of ``law enforcement 
officer'' in Sec.  1.274-5(k)(6)(ii) and draws from relevant language 
in the Public Safety Officers' Benefits Act (PSOB Act)'s definition of 
``action outside of jurisdiction'' in 34 U.S.C. 10284(1)(C), as well as 
from outside sources. The definition of ``member of a rescue squad or 
ambulance crew'' in these proposed regulations is the same definition 
that is set forth in 34 U.S.C. 10284(10), which was enacted as an 
amendment to the PSOB Act that establishes a framework for the 
expeditious and fair processing of claims brought by disabled law 
enforcement officers, firefighters, and other first responders or their 
survivors. H. Rep. No. 112-548 (2012).
    These proposed regulations provide an example of circumstances in 
which a member of a rescue squad or ambulance crew assigned an unmarked 
vehicle would qualify for the exclusion under this new provision.
    Finally, these proposed regulations provide conforming amendments 
to Sec. Sec.  1.132-1(g) and 1.132-5(h)(1).
    The purpose of these proposed regulations is to ensure that 
firefighters and members of rescue squads and ambulance crews who are 
officially authorized to use specially equipped unmarked vehicles to 
respond to emergencies are accorded the same tax treatment as other 
first responders who use qualified nonpersonal use vehicles. The 
Treasury Department and the IRS request comments on whether the 
definitions of ``unmarked firefighter, rescue squad or ambulance crew 
vehicles,'' ``firefighter,'' and ``member of a rescue squad or 
ambulance crew,'' are sufficient to accomplish the intended purpose of 
these proposed regulations or whether any of them might lead to 
potential abuse.

Applicability Date

    Proposed Sec.  1.274-5(k)(2)(ii)(S), (k)(7), (k)(9)(v) and 
references to Sec.  1.274-5(k)(9) in Sec.  1.132-5(h) are proposed to 
apply to tax years beginning on or after the date of publication of 
final regulations in the Federal Register. Until the date of 
publication of final regulations in the Federal Register, for purposes 
of proposed Sec.  1.274-5(k)(2)(ii)(S), (k)(7), (k)(9)(v) and 
references to Sec.  1.274-5(k)(9) in Sec.  1.132-5(h), taxpayers may 
rely on the guidance provided in these proposed regulations.

Special Analyses

I. Regulatory Planning and Review--Economic Analysis

    Pursuant to the Memorandum of Agreement, Review of Treasury 
Regulations under Executive Order 12866 (June 9, 2023), tax regulatory 
actions issued by the IRS are not subject to the requirements of 
section 6 of Executive Order 12866, as amended. Therefore, a regulatory 
impact assessment is not required.

II. Paperwork Reduction Act

    This proposed regulation does not create new collection 
requirements, as defined under the Paperwork Reduction Act (44 U.S.C. 
35); and does not alter any previously approved Office of Management 
and Budget information collection requirements and their associated 
burden.

III. Regulatory Flexibility Act

    It is hereby certified that these proposed regulations will not 
have a significant economic impact on a substantial number of small 
entities pursuant to the Regulatory Flexibility Act (5 U.S.C. chapter 
6). This certification is based on the fact that these proposed 
regulations do not impose any new or different requirements on small 
entities. The proposed regulations would apply only to employers that 
utilize unmarked firefighter, rescue squad, or ambulance vehicles and 
therefore would affect a relatively small number of entities, most of 
which would be public entities. In addition, these proposed regulations 
would not affect employment tax reporting or require any additional 
substantiation. Rather, the proposed regulations exempt affected 
entities from substantiation requirements and for this reason do not 
add any economic burden to affected entities. Therefore, a Regulatory 
Flexibility Analysis under the Regulatory Flexibility Act (5 U.S.C. 
chapter 6) is not required.

IV. Section 7805(f)

    Pursuant to section 7805(f), this notice of proposed rulemaking has 
been submitted to the Chief Council for the Office of Advocacy of the 
Small Business Administration for comment on its impact on small 
business.

V. Unfunded Mandates Reform Act

    Section 202 of the Unfunded Mandates Reform Act of 1995 requires 
that agencies assess anticipated costs and benefits and take certain 
other actions before issuing a final rule that includes any Federal 
mandate that may result in expenditures in any one year by a State, 
local, or Tribal government, in the aggregate, or by the private 
sector, of $100 million in 1995 dollars, updated annually for 
inflation. These proposed regulations do not include any Federal 
mandate that may result in expenditures by State, local, or Tribal 
governments, or by the private sector, in excess of that threshold.

VI. Executive Order 13132: Federalism

    Executive Order 13132 (Federalism) prohibits an agency from 
publishing any rule that has federalism implications if

[[Page 95730]]

the rule either imposes substantial, direct compliance costs on State 
and local governments, and is not required by statute, or preempts 
State law, unless the agency meets the consultation and funding 
requirements of section 6 of the Executive order. These proposed 
regulations do not have federalism implications, do not impose 
substantial direct compliance costs on State and local governments, and 
do not preempt State law within the meaning of the Executive order.

Comments and Request for a Public Hearing

    Before final regulations regarding the definition of qualified 
nonpersonal use vehicles are adopted, consideration will be given to 
any written or electronic comments on these proposed amendments that 
are submitted timely (in the manner described under the ADDRESSES 
heading) to the IRS. The Treasury Department and the IRS request 
comments on all aspects of the proposed regulations. Any electronic or 
paper comments submitted, will be made available at https://www.regulations.gov or upon request.
    A public hearing will be scheduled if requested in writing by any 
person who timely submits electronic or written comments. Requests for 
a hearing are strongly encouraged to be submitted electronically. If a 
public hearing is scheduled, notice of the date and time for the public 
hearing will be published in the Federal Register.

Drafting Information

    The principal author of these regulations is Stephanie L. Caden of 
the Office of the Associate Chief Counsel (Employee Benefits, Exempt 
Organizations, and Employment Taxes). However, other personnel from the 
Treasury Department and the IRS participated in their development.

List of Subjects in 26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

Proposed Amendments to the Regulations

    Accordingly, the Treasury Department and IRS propose to amend 26 
CFR part 1 as follows:

PART 1--INCOME TAXES

0
Paragraph 1. The authority citation for part 1 is amended by revising 
the entries for Sec. Sec.  1.132-0 through 1.132-8T and Sec.  1.274-5 
to read in part as follows:

    Authority: 26 U.S.C. 7805 * * *
* * * * *
    Sections 1.132-0 through 1.132-8T also issued under 26 U.S.C. 
132(o).
* * * * *
    Section 1.274-5 also issued under 26 U.S.C. 274(p).
* * * * *
0
Par. 2. Section 1.132-1 is amended by adding a sentence to the end of 
paragraph (g) to read as follows:


Sec.  1.132-1  Exclusion from gross income for certain fringe benefits.

* * * * *
    (g) * * * In addition, references to Sec.  1.274-5(k)(9) in Sec.  
1.132-5(h) are applicable as of [date of publication of final 
regulations in the Federal Register].
0
Par. 3. Section 1.132-5 is amended by revising paragraph (h)(1) to read 
as follows:


Sec.  1.132-5  Working condition fringes.

* * * * *
    (h) * * * (1) In general. Except as provided in paragraph (h)(2) of 
this section, 100 percent of the value of the use of a qualified 
nonpersonal use vehicle (as described in Sec.  1.274-5(k)) is excluded 
from gross income as a working condition fringe, provided that, in the 
case of a vehicle described in Sec.  1.274-5(k)(3) through (9), the use 
of the vehicle conforms to the requirements of Sec.  1.274-5(k)(3) 
through (9).
* * * * *
0
Par. 4. Section 1.274-5 is amended by:
0
1. Redesignating paragraph (k)(2)(ii)(S) as paragraph (k)(2)(ii)(T) and 
adding new paragraph (k)(2)(ii)(S);
0
2. Redesignating paragraph (k)(8) as paragraph (k)(9);
0
3. Redesignating paragraph (k)(7) as new paragraph (k)(8) and adding 
new paragraph (k)(7);
0
4. In newly redesignated paragraph (k)(9), designating Examples 1 
through 4 as paragraphs (k)(9)(i) through (k)(9)(iv), respectively.
0
5. Adding paragraph (k)(9)(v); and
0
6. Revising paragraph (m).
    The additions read as follows:


Sec.  1.274-5  Substantiation requirements.

* * * * *
    (k) * * *
    (2) * * *
    (ii) * * *
    (S) Unmarked firefighter, rescue squad, or ambulance crew vehicles 
(as defined in paragraph (k)(7) of this section).
* * * * *
    (7) Unmarked firefighter, rescue squad, or ambulance crew 
vehicles--(i) In general. The substantiation requirements of section 
274(d) and this section do not apply to an unmarked firefighter, rescue 
squad, or ambulance crew vehicle required to be used for commuting by 
the firefighter or member of a rescue squad or ambulance crew, who, 
when not on a regular shift, is on call at all times. Personal use 
(other than commuting) of the vehicle outside the firefighter's or 
rescue squad or ambulance crew member's obligation to respond to an 
emergency must be prohibited by the governmental unit, or any agency or 
instrumentality thereof, that owns or leases the vehicle and employs 
the firefighter, rescue squad, or ambulance crew member.
    (ii) Unmarked firefighter, rescue squad, or ambulance crew vehicle 
defined. An unmarked firefighter, rescue squad, or ambulance crew 
vehicle is an unmarked vehicle used by a firefighter, or member of a 
rescue squad or ambulance crew, that is owned or leased by a 
governmental unit, or any agency or instrumentality thereof, and that 
is specially outfitted to allow firefighters or members of rescue 
squads and ambulance crews to travel safely and efficiently to the 
scene of an emergency and provide emergency services. Onboard equipment 
on the vehicles includes but is not limited to lights and sirens, 
medical emergency equipment, life-saving devices such as 
defibrillators, and radios that assist firefighters, rescue squads, or 
ambulance crews in communicating with a central source or other 
emergency response crews related, for example, to traffic or hospital 
capacity. Onboard equipment may also include items such as personal 
protective equipment (helmet, coat, boots), emergency oxygen tanks, 
reference books, and laptop computers that enable workers to access 
important information related to the emergency. A license plate marking 
or insignia does not disqualify a vehicle from being an unmarked 
firefighter, rescue squad, or ambulance crew vehicle for purposes of 
this paragraph (k)(7).
    (iii) Firefighter. The term firefighter means an individual who is 
employed by a governmental unit, or any agency or instrumentality 
thereof, that is responsible for firefighting, rescue activity, or the 
provision of emergency medical care, and other related emergency 
services to prevent injury to persons or property and has the official 
authority to engage in fire suppression and provide related emergency 
services.
    (iv) Member of a rescue squad or ambulance crew. For purposes of 
this paragraph (k)(7), the term member of a

[[Page 95731]]

rescue squad or ambulance crew has the same meaning as in 34 U.S.C. 
10284(10).
* * * * *
    (9) * * *
    (v) Example 5. Emergency medical technician, X, is a member of a 
rescue squad employed by City M. X is provided with an unmarked vehicle 
(equipped with sirens and medical equipment) for use in responding to 
emergencies. X, along with other members of the rescue squad, is 
ordinarily on duty for a regular shift, and on call during the other 
hours of the day. X is required to use the unmarked rescue squad 
vehicle to commute to X's home in City M. The rescue squad's official 
policy regarding unmarked rescue squad vehicles prohibits personal use 
(other than commuting) of the vehicles outside the city limits. When 
not using the vehicle on the job, X uses the vehicle only for 
commuting, personal errands on the way between work and home, and 
personal errands within City M. All use of the vehicle by X conforms to 
the requirements of paragraph (k)(7) of this section. Therefore, the 
value of that use is excluded from X's gross income as a working 
condition fringe and the vehicle is not subject to the substantiation 
requirements of section 274(d).
* * * * *
    (m) Applicability date. This section applies to expenses paid or 
incurred after December 31, 1997. However, paragraph (j)(3) of this 
section applies to expenses paid or incurred after September 30, 2002, 
and paragraph (k) of this section applies to clearly marked public 
safety officer vehicles, as defined in paragraph (k)(3) of this 
section, only with respect to uses occurring after May 19, 2010. The 
rules of paragraphs (k)(2)(ii)(S), (k)(7) and (k)(9)(v) of this section 
apply to taxable years ending on or after [date of publication of final 
regulations in the Federal Register].

Douglas W. O'Donnell,
Deputy Commissioner.
[FR Doc. 2024-28040 Filed 12-2-24; 8:45 am]
BILLING CODE 4830-01-P