One Telephone Line - Deductible?

[Bees Knees]

Take it to the appellate level if the tax benefit is worth the cost.....You'l win.

What part of no do you not understand?

§ 262. Personal, living, and family expenses
(a) General rule
Except as otherwise expressly provided in this chapter, no deduction shall be allowed for personal, living, or family expenses.
(b) Treatment of certain phone expenses
For purposes of subsection (a), in the case of an individual, any charge (including taxes thereon) for basic local telephone service with respect to the 1st telephone line provided to any residence of the taxpayer shall be treated as a personal expense.

No exception is given in the case of the telephone line being used 100% for business in a qualified home office. It is not deductible.

As for the question on a cell phone, a cell phone is not a telephone line provided to a residence. Therefore, as the law is written, you can’t claim the cell phone as the 1st telephone line.

Is this law out of date? Of course it is. So is half a billion other laws on the books. So what?

Could you argue this at appeals? Of course you could, and you might get some idiot at IRS to agree with you. If I were the IRS agent, however, I’d slap the $1,000 preparer penalty on you for taking an undisclosed position on the return that has no substantial authority backing up your position.

[luke]

Amen

BEES - I think preparers need to be more aware of that potential $1000 penalty when trying to "help" a client take a deduction that SHOULD be allowed!

[Bees Knees]

BTW: The code says basic local telephone service.

If that one and only telephone line includes extra charges for a business listing, it is only the cost of basic local telephone service that falls under the non-deductible portion.

In our area, you can get basic local telephone service for about $20 a month. Simply subtract that amount from the total, and deduct the rest. No sense messing around with this, as it really isn’t that much of a cost that is disallowed.

[jimmcg]

What part of no do you not understand?



No exception is given in the case of the telephone line being used 100% for business in a qualified home office. It is not deductible.

As for the question on a cell phone, a cell phone is not a telephone line provided to a residence. Therefore, as the law is written, you can’t claim the cell phone as the 1st telephone line.

Is this law out of date? Of course it is. So is half a billion other laws on the books. So what?

Could you argue this at appeals? Of course you could, and you might get some idiot at IRS to agree with you. If I were the IRS agent, however, I’d slap the $1,000 preparer penalty on you for taking an undisclosed position on the return that has no substantial authority backing up your position.

It works for me even at the audit level. I prefer to be an advocate for my client and not take no for an answer.........To each his own.

[Bees Knees]

I prefer to be an advocate for my client and not take no for an answer.........

And so do I, when the law allows for it.

[jimmcg]

And so do I, when the law allows for it.

You are a law abiding individual. I respect that. Got to go .............Too many good football games on this weekend.................Back next week.

[AuditorTurnedGood]

Thank you Bees

What part of no do you not understand?

I was beginning to wonder if I was somehow mis-reading the law. Always good to know one isn't nuts.

ATG

[Davc]

Always good to know one isn't nuts.

That's a separate issue.

[ChEAr$]

Perhaps we should never call the wires leading from the pole in front of the house into the house a telephone line, for that's clearly a personal expense and if the first line, not allowed as a deduction.

So then, they are now "data transmission lines".

[fliszt]

On TV last nite

I saw an ad for a phone line into the house for (I think) $10/. Why not investigate your local area to see what's available and spent a couple bucks for the 1st line and then go from there.
Larry