Announcement 2026-11, 2026-4 I.R.B. 378, July 10, 2026

The Internal Revenue Service has issued Announcement 2026-11, which serves as a formal modification to the previously issued Notice 2026-10. This announcement specifically targets the "optional standard mileage rates for computing the deductible costs of operating an automobile for business, medical, or moving expense purposes." Furthermore, these rates are utilized for "determining the reimbursed amount of these expenses that is deemed substantiated." The announcement clarifies the updated rates and the specific temporal boundaries for their application to various taxpayer activities.

Rationale for the Modification

The necessity for this regulatory adjustment is driven by shifting economic conditions. Specifically, the IRS notes that "this modification results from recent increases in the price of fuel." To maintain the integrity of the standard mileage rate system—which is intended to reflect the actual costs of vehicle operation—the Service must adjust the rates to align with current fuel price volatility.

Statutory Framework and Legal Analysis

In its analysis, the IRS addresses the necessity of adjusting the rates used to compute deductible costs and substantiated reimbursements. The IRS's determination is predicated on the need to accurately reflect the "deductible costs of operating an automobile" in light of fluctuating fuel prices. While the rates for business, medical, and moving expenses are subject to these administrative adjustments, the IRS notes that the rate applicable to charitable contributions remains unchanged. Specifically, the mileage rate for charitable contributions "is fixed under § 170(i) of the Internal Revenue Code at 14 cents per mile." Consequently, the IRS's analysis maintains the distinction between rates subject to periodic adjustment based on operating costs and those fixed by statutory mandate.

Application of Revised Rates to Taxpayer Transactions

The application of these revised rates is strictly governed by the date the expense was incurred or the allowance was paid. The new rates apply to "deductible transportation expenses paid or incurred for business, medical, or moving expense purposes on or after July 1, 2026."

For employers and employees, the announcement clarifies that the revised rates apply to "mileage allowances that are paid both (1) to an employee on or after July 1, 2026, and (2) for transportation expenses paid or incurred by the employee on or after July 1, 2026." Conversely, the previous rates established in Notice 2026-10 remain applicable to any "deductible transportation expenses paid or incurred... before July 1, 2026," and to any mileage allowances paid to an employee prior to that date.

Summary of Revised Mileage Rates

The conclusion of the IRS is the implementation of the following revised optional standard mileage rates:

For business purposes, the rate is set at 76 cents per mile.
For medical and moving purposes, the rate is set at 23.5 cents per mile.
As previously noted, the rate for charitable contributions remains 14 cents per mile pursuant to § 170(i).

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