CTIA, the international association for the wireless telecommunications industry, is urging the US government to back proposed legislation that would repeal “arcane” tax laws requiring employees to keep records of calls made on employer-provided mobile devices.
CTIA has welcomed statements by Treasury Secretary Tim Giethner and Internal Revenue Service Commissioner Doug Shulman that there should be “no tax consequences” to companies and employees for personal use of employer-provided cell phones, but the Association has argued that the government’s proposals to alleviate the compliance burden do not go far enough.
“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,” stated CTIA President and CEO, Steve Largent.
Cell phones were added to the listed property rule in 1989, and current law treats mobile communication devices provided by employers to their employees as a fringe benefit and taxes non-work related use accordingly.
However, the law has become increasingly outdated as advances in mobile communications have continued, and with cell phones now seen as a necessity rather than a luxury, it is becoming harder to distinguish between personal and work-related use of such devices.
Specifically, individuals are expected to record: the amount of such expense or other items; the time and place of the use of the property; the business purpose of the expense, and; the business relationship to the taxpayer of the person using the property.
CTIA supports legislation introduced into both chambers of Congress in January known as the Mobile Act, which promises to modernize bookkeeping requirements and “remove certain limitations on the tax deduction for employee use of cellular telephones”.
"There is broad, bi-partisan support for this legislation and we urge the Congress to act on it this year,” Largent concluded.
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