LI House members ask IRS to let LIRR riders recoup funds set aside for commute

Alfonso A. Castillo for Newsday

September 30, 2020

Originally published in Newsday on September 30, 2020.

Long Island’s congressional delegation is the latest to call on the federal government to let Long Island Rail Road customers recoup wages earmarked for commutes they no longer make.

Five Congress members representing districts in Nassau and Suffolk sent a letter Monday to Internal Revenue Service Commissioner Charles Rettig urging the IRS to "consider any available options … to provide targeted relief for individuals who have unused transportation benefits due to the ongoing pandemic."

Thousands of LIRR customers are enrolled in benefit programs offered by employers that allow them to pay their commuting costs using up to $270 a month in pretaxed wages deducted from their paychecks. The programs, administered by companies such as WageWorks, can save enrollees hundreds of dollars annually on commuting costs.

But once wages are deducted from an enrollee’s earnings and set aside for commuting, IRS regulations prohibit the pretaxed dollars from being refunded — even if someone loses a job and stops commuting. The unused funds, which are typically accessed through a value-stored debit card, sit in an account controlled by the program administrator.

Some LIRR ticket holders who did not suspend their deductions in time, are sitting on hundreds of dollars in those accounts, without knowing when, or if, they will return to their commutes.

"These individuals may be forced to forfeit a significant amount of unused commuter benefits that they were unable to access as a result of this ongoing crisis and at no fault of their own," wrote the letter’s authors: Rep. Peter King (R-Seaford), Rep. Gregory Meeks (D-St. Albans), Rep. Kathleen Rice (D-Garden City), who led the effort, Rep. Thomas Suozzi (D-Glen Cove) and Rep. Lee Zeldin (R-Shirley).

"Many workers and families are in critical need of financial assistance during these challenging times and could greatly benefit from direct access to these commuter funds for other essential purposes," the House members wrote.

An IRS spokesperson did not immediately respond to a request for comment. However, an IRS representative responded last week to a similar letter sent in July by state Sen. Todd Kaminsky (D-Long Beach), who has also pushed for LIRR ticket refunds.

In her written response, Janine Cook, acting associate chief counsel for the IRS, said that commuter expense withholdings "may be reduced or stopped" at any time, and that any funds already withheld "will continue to be available and may be rolled over" for future commuting costs.
"In no case, however, may the employer provide a cash refund," Cook wrote.

Gerard Bringmann, chairman of the LIRR Commuter Council, a rider watchdog group, commended the bipartisan House members for getting together on the letter, which he predicted "is going to get the IRS’ attention."

Bringmann’s council has also asked the IRS to make a one-time exception to refund commuter funds to LIRR riders. He noted that, to recoup some of their money, riders have gone as far as trying to sell monthly tickets to other commuters at a reduced price.
"This is something that is badly needed," Bringmann said. "It’d be nice for the IRS to show, for once in their life, that they have a heart."