The IRS this week called for public comment on its suggestions that included letting employers deduct the entire sum of a worker’s cellphone use if a worker can establish he or she uses a personal phone for some period, and letting employers use statistical sampling to generalize about usage (see IRS Proposes Safe Harbor Rule for Taxing Work Cell Phone Use ).
“Minute by minute documentation really doesn’t make any sense — we’ve been hearing all about it, and we said yes it makes no sense,” the unnamed official told Reuters. The IRS’ proposed changes are intended to “reduce how much employers have to spend trying to comply with the tax law,” the official added.
Another idea is for employers to assign a set rate for business use, 75% proposed by the IRS, with the remaining treated as taxable personal use.“For employers we thought we should give them alternative ways to take these deductions,” the IRS official told Reuters.
A law dating to 1989 requires companies seeking to deduct worker cell phones as an expense to track personal use with painstaking documentation of minutes. Under current law, workers are required to pay tax on personal cell phone use on a work phone as a fringe benefit..
The agency will take public comment on the proposals until September 2, 2009.
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