Internal Revenue Service Commissioner Doug Shulman has decided against coming up with rules on the taxation of employer-provided cell phones and said the IRS would instead wait for congressional legislation.
In June, Shulman and Treasury Secretary Tim Geithner encouraged Congress to pass legislation that would end the tax on personal use of employer-provided cell phones (see Shulman, Geithner Call for End to Cell Phone Use Tax). Earlier that month, the IRS asked for comments on the best ways to simplify compliance with rules related to employer-provided cell phones.
The IRS has proposed taxing up to 25 percent of employees use of the phones but has encountered stiff opposition from the cell phone industry. However, Shulman indicated in an interview with C-SPANs Newsmaker show last Friday that he prefers to let Congress settle the question.
Were quite hopeful Congress is going to act on this, he said, according to Dow Jones Newswires. In the meantime, were not doing anything special or moving forward with any initiatives. Our hope is that there will be legislation to clean this up.
In 1989, cell phones were designated as listed property under the Tax Code, and are therefore subject to special recordkeeping requirements to establish their business use. Companies and employees have long complained about the onerous recordkeeping requirements, and many companies simply ignore them.
Rep. Sam Johnson, R-Texas, has introduced a bill, H.R. 690, the Mobile Cell Phone Act, to update the treatment of cell phones and BlackBerries used for business and repeal the requirement that employers and employees maintain detailed logs of cell phone use. The bill was approved by the House during the last Congress, but is still in committee in the current session.
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