2009.06.17
About that cell phone tax
Well that didn't take long. The Internal Revenue Service announced last week that it intended to get tough enforcing a tax law from 1989 that says workers who make personal calls on their work-issued cell phones must count the value of those calls as income.
Sure, the federal government needs the money, but sheesh. Cell phones have come a long way since they were the brick-sized tools of executives in the 1980s.
Today, the IRS backed off its plan, asking Congress to change the law.
Hop to it, Congress.
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Aren't most cell plans for unlimited calling? How do you divide up a benefit that's free? This is idiotic.
Comment by Kristen — June 17, 2009 @ 3:17 pm
Kristen....I don't know what's going to happen here but what the IRS could do is say "Kristen, like everyone else, uses her business provided cell phone 25% of the time for personal use. The compnay pays $80/mo. for the phone, therefore Kristen will be taxed an on additonal income of $20/mo or $240/yr." That's how they would get around figuring out what calls are biz vs personal. But as I said I don't know what's going to happen if anything here.
Comment by BUD — June 17, 2009 @ 3:51 pm
Kristen, the way this was done when I worked for the state was they looked at the whole detailed billing sheet for all calls for each phone. You'd have to manually go through line by line and select which calls were personal in nature, and then they would determine how many minutes were used as a proportion of the total billing. You'd then pay that portion out of a paycheck. They also did the same thing for office long distance calls made from your assigned phone number. It was tedious, but it kept things honest. It was not considered imputed income though, we just had to reimburse the state.
Comment by Other John — June 17, 2009 @ 3:58 pm
NPR yesterday updated this story, saying via Obama the tax was antiquated, and would not be pursued. The law was introduced @ 1989
Comment by catspaw — June 17, 2009 @ 4:49 pm
I pay for all of my cell phone cost and my employer calls me on it alot. Do I get to deduct that now?
Comment by BobH — June 17, 2009 @ 5:24 pm
BobH..probably depends what "day of the week" you ask the IRS or an accountant..scarey aint it??!!
Comment by BUD — June 18, 2009 @ 6:27 am
@Kristen: "Aren't most cell plans for unlimited calling? How do you divide up a benefit that's free? This is idiotic."
If unlimited calling is $100/month, then they would make 25% of that, or $25, taxable income for you.
Comment by Jack — June 18, 2009 @ 1:49 pm