home phone

[Jesse]

Just to play devil's advocate and for thought:

If the line used for business is only located in an office dedicated to the business, an argument might be made that the phone is not coming into a residence but is coming into a business office.

Don't have any idea if it would hold up, just throwing it out for thought.

LT

I would think the argument will only hold up if the office was detached from the home.

[taxea]

a separate fax line, long distance for business are deductible and I think with the advent of cell phones being used so commonly as the primary phone an arguement could be made that this is a second line into the home. If you are reluctant to deduct it, call the IRS hotline and ask to speak to a tax advisor.

[Larmil]

a separate fax line, long distance for business are deductible and I think with the advent of cell phones being used so commonly as the primary phone an arguement could be made that this is a second line into the home. If you are reluctant to deduct it, call the IRS hotline and ask to speak to a tax advisor.

I am a tax adviser.

[dan doshan]

as the primary phone an arguement could be made that this is a second line into the home

Guess you could make that argument but that would make one look like a politician. Trying to have things both ways. I think it is what it is. As posters have mentioned that is one thing that does appear to be quite clear. No deduction for the main phone line into the home. Lets not try and goof things up. I like it clear cut that way. Now if and when someone fights this in tax court and wins and or the IRS / Congress changes the rules then so be it.

[Gretel]

Yes, it's in the code. Yes, we have to follow the code no matter how stupid or outdated. In the scenario posted where it is very clear that the phone is business only I would be more than interested knowing if Appeals or a Court would have their common sense actually override the tax code.

[Larmil]

Yes, it's in the code. Yes, we have to follow the code no matter how stupid or outdated. In the scenario posted where it is very clear that the phone is business only I would be more than interested knowing if Appeals or a Court would have their common sense actually override the tax code.

What court has the authority?

[AJsTax]

The rule says the "charge"

for the basic phone service in the home is a personal expense. If the line costs a lot more than what a basic line costs in the area then the balance of the cost might be business expense, depending on other factors. Note it says the charge for basic service.
I often use this. Phone charge is $100 per month due to business line and yellow page listing, the basic cost in the area is $25, the balance of $75 may qualify for a business deduction if the use qualifies it.

[Jesse]

A cell line is not a landline

Is there IRS "tax advisors" with higher up powers that be? If you were to call the IRS "tax advisor", for what reason would you think they would tell you any different than:

Telephone. The basic local telephone service charge, including taxes, for the first telephone line into your home (i.e., landline) is a nondeductible personal expense. However, charges for business long-distance phone calls on that line, as well as the cost of a second line into your home used exclusively for business, are deductible business expenses. Do not include these expenses as a cost of using your home for business. Deduct these charges separately on the appropriate form or schedule. For example, if you file Schedule C (Form 1040), deduct these expenses on line 25, Utilities (instead of line 30, Expenses for business use of your home).

http://www.irs.gov/publications/p587...link1000226332

[taxea]

Most ISPs that I know of provide internet service at a flat rate per month. Unless you have some internet service that charges you according to your usage, how could you possibly allocate the cost between personal and business? Your incremental cost of using the internet for business is -zero-.

[The same comment applies to most long-distance phone plans. They no longer charge by the call.]

hours used for personal vs hours used for business, each divided by the total bill. Then you multiply the percentage for each by the total bill. Wallaaa, you have the allocation for each.

[FEDUKE404]

Old rules for a new environment

Is there IRS "tax advisors" with higher up powers that be? If you were to call the IRS "tax advisor", for what reason would you think they would tell you any different than:

Telephone. The basic local telephone service charge, including taxes, for the first telephone line into your home (i.e., landline) is a nondeductible personal expense. However, charges for business long-distance phone calls on that line, as well as the cost of a second line into your home used exclusively for business, are deductible business expenses. Do not include these expenses as a cost of using your home for business. Deduct these charges separately on the appropriate form or schedule. For example, if you file Schedule C (Form 1040), deduct these expenses on line 25, Utilities (instead of line 30, Expenses for business use of your home).

http://www.irs.gov/publications/p587...link1000226332

I've been around long enough to encounter all of the "reasons" to deduct some/all of basic telephone service. "I'm on call" or "my boss requires me to have a phone" and such.

I was never quite so happy as when the IRS firmly slammed the door by saying no matter what you called it, the basic charges for the first phone ("landline" was never an issue) were never an allowable deduction.

Of course, now everyone has cell phones and many people have no landlines. So we've come full circle, i.e. back to the "reasons" to deduct some/all of the basic monthly cell phone charges.

It would be nice if the IRS could, once again, give us some reasonable guidelines for the world of 2012.

But I'm not holding my breath....

FE

[taxea]

I would think the argument will only hold up if the office was detached from the home.

Perhaps but under all the current circumstances re cell phones, I still believe it is a reasonable argument. I have had success with the IRS in the pass and if I feel I can justify the expense and only if the client wants to after I clearly explain the pros and cons. In this case I just don't think the IRS has caught up with modern times. If the client doesn't want to take the chance then I don't include it. I put no pressure on the client.
At times I have contacted the IRS to get their reading on the scenero (sic). This way I have a name and ID and it falls on the IRS for providing misinformation.

[Jesse]

I've been around long enough to encounter all of the "reasons" to deduct some/all of basic telephone service. "I'm on call" or "my boss requires me to have a phone" and such.

I was never quite so happy as when the IRS firmly slammed the door by saying no matter what you called it, the basic charges for the first phone ("landline" was never an issue) were never an allowable deduction.

Of course, now everyone has cell phones and many people have no landlines. So we've come full circle, i.e. back to the "reasons" to deduct some/all of the basic monthly cell phone charges.

It would be nice if the IRS could, once again, give us some reasonable guidelines for the world of 2012.

But I'm not holding my breath....

FE

I agree, but wouldn’t hold my breath either.

Perhaps but under all the current circumstances re cell phones, I still believe it is a reasonable argument. I have had success with the IRS in the pass and if I feel I can justify the expense and only if the client wants to after I clearly explain the pros and cons. In this case I just don't think the IRS has caught up with modern times. If the client doesn't want to take the chance then I don't include it. I put no pressure on the client.
At times I have contacted the IRS to get their reading on the scenero (sic). This way I have a name and ID and it falls on the IRS for providing misinformation.

Great for your client if indeed you had success in the past, I’m sure you were thankful to have a reasonable and generous agent to work with.

What I have trouble understanding is how you can give the client a choice on an expense that you know is not correct, but because you think it is unreasonable you will put the blame on someone else, that is the advisor that gave you the misinformation as you said: “This way I have a name and ID and it falls on the IRS for providing misinformation”.

If the first advisor gives you the correct information do you keep calling back until you talk to an advisor that gives you incorrect information?

In my opinion there is more than one area of the code that seems unreasonable, and many areas that are not black and white, but shades of grey, but this is not one of them. The basic charge for the first landline into the home is not deductible – I see no shades of grey, only that the code has not caught up to the modern times. Once again I respectfully disagree with your reasoning.

[WhiteOleander]

At times I have contacted the IRS to get their reading on the scenero (sic). This way I have a name and ID and it falls on the IRS for providing misinformation.

Having this information would be useless. If the issue became challenged by the IRS, you could be cited for taking an unresonable stance on the tax return. The fact that you had the name and number of an agent that said it was OK would not sway the IRS. They would point out what the code says and the fact that you were aware of the code.

[Kram BergGold]

I like Thomtax's thinking

If the line has only one jack and it is located in an office that is being claimed I would argue that it is not coming into the home. However if there is a working jack anywhere else in the house then fogetaboutit!

[taxea]

I agree, but wouldn’t hold my breath either.



Great for your client if indeed you had success in the past, I’m sure you were thankful to have a reasonable and generous agent to work with.

What I have trouble understanding is how you can give the client a choice on an expense that you know is not correct, but because you think it is unreasonable you will put the blame on someone else, that is the advisor that gave you the misinformation as you said: “This way I have a name and ID and it falls on the IRS for providing misinformation”.

If the first advisor gives you the correct information do you keep calling back until you talk to an advisor that gives you incorrect information?

In my opinion there is more than one area of the code that seems unreasonable, and many areas that are not black and white, but shades of grey, but this is not one of them. The basic charge for the first landline into the home is not deductible – I see no shades of grey, only that the code has not caught up to the modern times. Once again I respectfully disagree with your reasoning.

In all the years I have been doing taxes I have run into only one IRS employee who was rude and unreasonable. With most of the deductions that have been take there has never been a question by the IRS.

I also have not called the IRS before-hand. That was a suggestion for anyone who wants to attempt an expense that they feel is reasonable but doesn't appear to coincide with the IRS current ruling. "Blaming someone else" is not how I look at it. The IRS employee should be able to give me the correct answer. I would contact one of their attorneys, not a low-level employee. If you have ever handled an appeal you know that one of the reasons is being given wrong info by the IRS. They allow the option so why not use it.

I make it very clear to my client that he/she would be taking a gamble and I also tell them that if we get a letter from the IRS and they will not accept the deduction then I will pay the penalties and interest.....and no I do not have insurance coverage.

I am very confident in the way I do taxes. If I tought that taking any kind of deduction would put my client in jeopardy, I wouldn't even suggest it as an option.