The Cellular Telecommunications Industry Association has asked the IRS to repeal an old tax rule that required employees to maintain logs detailing their business usage of mobile phones.
The CTIA filed comments with the IRS on the listed property rule for employer-provided cell phones. The organization noted that when cell phones were added to the listed property rule in 1989, mobile phone use was uncommon and cell phones were considered luxury items.
On their cell phone logs, individuals are expected to record the amount of the expense, the time and place the cell phone was used, the business purpose of the expense, and the business relationship to the taxpayer of the persons using the property. However, the IRS and Congress have been considering repealing the arcane rule.
IRS Commissioner Douglas Shulman and Treasury Secretary Timothy Geithner have asked Congress to pass legislation to end the tax on personal use of employer-provided mobile phones (see Shulman, Geithner Call for End to Cell Phone Use Tax). In response, Senators John Kerry, D-Mass., and John Ensign, R-Nev., along with Representatives Sam Johnson, R-Texas, and Earl Pomeroy, D-N.D., have sponsored the Mobile Act (S. 144/H.R. 690) to address this matter.
However, the CTIA wants them to go further than the IRS has proposed. We agree with Secretary Geithners and Commissioner Shulmans June 16 statement that said it must be clear that there will be no tax consequence to employers or employees for personal use of work-related devices such as cell phones provided by employers. Unfortunately, the alternatives proposed by the IRS are either incomplete or inadequate solutions that would continue to subject employees and employers to onerous call log requirements, said CTIA president and CEO Steve Largent in a statement. Instead, CTIA and the wireless industry support the Mobile Act, which would remove mobile devices from the listed property rule and accomplish Secretary Geithners and Commissioner Shulmans goal of repealing a burdensome and poorly understood tax rule. There is broad, bipartisan support for this legislation and we urge the Congress to act on it this year.
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