AP Fringe Benefits May Run Counter to IRS Rules

Should City employees be allowed to take City cars home?
Despite claims to the contrary, City employees are often seen with City cars outside their homes. And it would seem that some of those employees probably should have been paying tax on that benefit.
According to a recent routine audit report required by the State of towns receiving exceptional aid, the City has said it allows about 20 employees to take their cars home. The auditors write, in their April 30 report, that "some employees authorized to take home City owned vehicles live up to 30 miles from the City." However, they note that the Internal Revenue Service (IRS) considers the personal use portion of an employer provided vehicle to be a taxable fringe benefit. "The City currently does not have a process in place to evaluate whether any of their employees should have this type of taxable fringe benefit included in their annual income."
The auditors recommended the City create such a process and figure out the value for tax purposes where appropriate.