Congress May Stop IRS Taxing Employees' Private Use Of Internet

by Mike Godfrey, Tax-News.com, New York

18 May 2001

With a number of bi-partisan sponsors, Representative Jerry Weller (R - Illinois) this week introduced into the US House of Representatives a Bill that would prevent the Internal Revenue Service from taxing employees for computers and Internet access that they receive for free from their workplaces.

Spokesman Ben Fallon said that a number of major US corporations offer their staff free computers and Internet access, not just for business purposes, but for personal and family use too, including American Airlines, Delta Airlines, Ford Motor Co., and Intel Corp.

The aim of the Bill is to reduce the digital divide, since more senior, and thus richer, employees would have no difficulty in getting access to the Internet, while blue collar employees might well have no access to the Internet unless it was provided to them by their employers.

"At American Airlines, a baggage handler who accepts one of these computers would have a $250 to $300 tax liability," Fallon said. "This is one of the ways where corporate America can help bridge the digital divide and make computers more available for working- and middle-class households without disposable income..."

Many employers might feel that they have no choice in the matter: almost all desk-workers now have Internet access and there is little that employers can do to stop them using e-mail and browsing facilities for their own private purposes. In some European countries, employers are even prevented from looking at employees' e-mails (equivalent to opening their work snail-mail) on privacy grounds. Who'd be a boss?

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