Tax Lawyer's Blog

Slashdot reports that the IRS does not intend to require businesses to account for the personal usage portion of employer-provided cell phones:

“Last week the IRS caused an uproar when it requested public comments on ways to clarify a [1989 tax law], seldom enforced, that would tax personal usage of business cell phones. But IRS Commissioner Doug Shulman said that the request for comments did not mean that the largely ignored rule would now be enforced.

‘Some have incorrectly implied that the IRS is “cracking down” on employee use of employer-provided cell phones,’ Shulman wrote. ‘To the contrary, the IRS is attempting to simplify the rules and eliminate uncertainty for businesses and individuals.’ And in fact, the IRS is now recommending that the law be repealed, saying that ‘the passage of time, advances in technology, and the nature of communication in the modern workplace have rendered this law obsolete.’”

I think the Commish is a doing a little damage control, here.

He obviously sent out a trial balloon with his earlier notice soliciting input as to how employer’s should apply a 1989 tax law to account for the personal usage portion of employee-provided cell phones.

But now, after an overwhelming and vociferous opposition against the imposition of tax on any portion of employee-provided cell phone usage, he’s pretending that from the outset his only concern was to make life easier for businesses and taxpayers.

I was born, but I wasn’t born yesterday.

But it doesn’t matter now because in response to the public outcry, Senator John Kerry has introduced legislation that would repeal the 1989 law.

Joe Kristan of Tax Update Blog reported on the problem in an earlier post titled Cell Phone Kerfuffle Heats Up.

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