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IRS, Treasury want cell phone tax repealed
WASHINGTON (AP) — The Obama administration asked Congress today to repeal a widely ignored tax on the personal use of company cell phones after sparking an outcry last week when it sought ideas for enforcing the law.
The 1989 law says that personal use of a company cell phone should be taxed like other fringe benefits. The law, however, can be cumbersome for workers who increasingly use mobile devices for texting, e-mailing and browsing the Internet — sometimes for work, sometimes for personal use.
“The current law, which has been on the books for many years, is burdensome, poorly understood by taxpayers, and difficult for the IRS to administer consistently,” IRS Commissioner Doug Shulman said in a statement. “The passage of time, advances in technology, and the nature of communication in the modern workplace have rendered this law obsolete.”
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Comments
They should remove the tax for everybody.
This is a good idea by the King and his administration.
Accounting for the personal use would be too cumbersome with today's technology as the commish stated, although the beneifts are likely beyond the de minimis threshhold.
The IRS has the option of making the entire amount of the expense taxable, including personal use, and including it in wages on the W-2 and the employee can then have the option of deducting the personal use amount as an itemized deduction, but that seems illogical as well, because the personal use is not work related.
The IRS can also introduce a set amount that can be treated as a reimbursement by the employer each year, say $200, and the burden would then fall on the employee to keep records of work usage over the $200 amount and deduct that amount on their return.
It's great to hear the IRS is splitting hairs on how to collect fractions of pennies on W2 employer provided cell phones. In 1989 air time was .30 a minute and the IRS was pro-actively licking their chops preparing to cash in on the cell phone tsunami. Now with air time costing .0003 cents a minute they have finally realized the folly of spending thousands of dollars to audit someone to collect 1.12 in unpaid taxes. Since 99% of IRS tax code falls into Mr Shulman's characterization of "burdensome, poorly understood by taxpayers, and difficult for the IRS to administer consistently" are they going to do away with it too?