IRS Comments on Unused Transportation Fringe Benefits

In a recent Information Letter, the taxpayer was participating in her employer's qualified transportation fringe benefit plan when she was fired. At that time, she had approximately $380 of unused commuter benefits. (The benefits were obtained through compensation reduction contributions.) According to the IRS, employees who stop participating in a qualified transportation benefit plan without cancelling their compensation reduction election can't receive a refund of any amount (even if contributions exceed actual benefits). This is the case whether the employee is fired or quits voluntarily. The IRS also concluded that the terminated employee can't use the funds for continued transportation expenses. 
Source :Thomson Reuters/
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