Cell Phones and Employers

[JG EA]

Several days ago The Wall Street Journal did an article about the IRS cracking down on cell phone use. The IRS published this article:

http://www.irs.gov/newsroom/article/0,,id=209795,00.html

It appears to be in response to the WSJ article - I thought that was pretty interesting and haven't noticed any other direct responses like this.

[JohnH]

I'll relate a recent experience regarding this matter. Corporate client was audited for 2005 in detail, and some issues came up which also caused the auditor to spot-check some 2006 and 2007 matters as well. In all the info that was covered, there was never a question raised about cell phones. (There were significant cell phone charges in all years involved).

[erchess]

Link to WSJ Article?

Could we have a link to the original WSJ Article? Also how old is the WSJ Article. The IRS post was last reviewed or updated on 16 June.

[AuditorTurnedGood]

I just read the IRS response and am left wondering one thing: are they actually going to make cell phones a totally tax irrelevant issue? The Commissioner seems to state that personal use of an employer cell phone should have no tax consequense for the employer or employee. If so, it would make things much simpler to report.

[Roberts]

article on the subject

http://www.hrtechnews.com/not-so-fast-irs-backtracks-on-cell-phone-taxation/

[veritas]

IRS-give me a break

I pay $35 a month per business land line in my office. Everybody uses these land lines for personal use.

I pay $35 a month for my cell phone. I use it for some personal use.

The IRS agents sit at their desks and use government phones for private use.

[JG EA]

Could we have a link to the original WSJ Article? Also how old is the WSJ Article. The IRS post was last reviewed or updated on 16 June.

June 12th I think.

http://online.wsj.com/article/SB124473141538306335.html

[New York Enrolled Agent]

June 12th I think.
http://online.wsj.com/article/SB124473141538306335.html

The article is very misleading. The IRS (believe it or not) is trying to solve a problem that Congress created with cell phones being listed property and thus subject to the stringent rules of §274(d).

If you want to read what is really happening here, read IRS Notice 2009-46. It is a good read and will actually explain the problem and offer some possible solutions.

[Questionguy101]

Employer reimbursement

I think I have asked a related question before but couldn't get a clear cut answer. Maybe now is a good timing to try again...

An 100% owner of a S-corp uses his cell phone for the company all the time. He even forwards all the office calls to his cell phone when he is away from the office and uses his cell phone to return the calls. Even when he is in the office, he uses his cell phone to make toll calls and long distance calls for the S-corp because his cell phone plan does not charge for out of state calls. So at least 50% of his cell phone is used for the S-corp.

Based on the IRS's new standing, is it pretty safe to assume that there will be no tax consequence if the S-corp reimburses (or pays for) him 50% of his cell phone chargers?