Telephone deduction, cell phone personal

[JG EA]

I know the first line into the home is nondeductible, but could there be exceptions. Client uses only the land line extensively for business. She is on the phone and fax constantly. She writes this cost down as a business expense. She has a cell phone for personal use.

What do you think about deducting the land line?

[TaxCPANY]

Go for it

Why not? You seem to have the facts, to raise upon audit -- and nothing statutory specifies just which phone should/could be designated the "business phone."
It would reinforce your client's position were the landline listed under her D/B/a -- if she has one -- or, alternatively, if she's got stationery showing the landline number and not the cellphone. Perhaps some other form of documentation distinguishes the landline from the cellphone?
Hope this helps, TaxCPANY

[veritas]

No wriggle room

in IRC 262(b)

(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.


You could take business long distance charges though.

[Lion]

Plus

Plus all the non-basic services, such as the charges for call-waiting and voice mail and....

[JG EA]

Why not? You seem to have the facts, to raise upon audit -- and nothing statutory specifies just which phone should/could be designated the "business phone."
It would reinforce your client's position were the landline listed under her D/B/a -- if she has one -- or, alternatively, if she's got stationery showing the landline number and not the cellphone. Perhaps some other form of documentation distinguishes the landline from the cellphone?
Hope this helps, TaxCPANY

Thanks for the good points about documentation.

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.

Not to be picky but couldn't the cell phone be the first phone? Or is "line" the important thing?

[oceanlovin'ea]

No long distance

Most people don't have a charge for long distance calls anymore. For example, we have digital phone service. There is one charge for all calls, same costs every month no matter how many or how few long distance calls we make.
Same with cell phones...most people use cell phones for long distance because there is not a separate charge for long distance.

I think that IRS is behind the times in this matter. I know what the code says and that is what I tell people and that is what I do. But I don't agree with it.

Linda F

[TaxCPANY]

Ah, "veritas," what is a "1st telephone line," nowadays?

in IRC 262(b)

(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.


You could take business long distance charges though.

Your cite is not dispositive -- where is the essential description that denies this taxpayer a "1st telephone line" as a cellphone? The past, few years are rife with published reports (in newspapers as major as 'The New York Times') of "homeowners" who've foregone landlines, relying instead *solely* upon cellular service.
I honestly don't think it's a question, anymore, that one can declare a cellphone as a "basic local telephone service . . . provided to any residence" -- and I must assert that many, published reports support my claim.
Please 'call' my 'bluff' with solid rebuttals of my claim, or, else, admit the 'wedge' that technology lately has provided.
Very truly yours, TaxCPANY

[veritas]

Ok TaxCPANY

I suppose the definition of "line" could be physical or wireless as long as the phone number is independent of the other.

But which is "1st telephone line provided"? If in this case the physical line was provided first, I think your shot down.

[Bees Knees]

Your cite is not dispositive -- where is the essential description that denies this taxpayer a "1st telephone line" as a cellphone? The past, few years are rife with published reports (in newspapers as major as 'The New York Times') of "homeowners" who've foregone landlines, relying instead *solely* upon cellular service.
I honestly don't think it's a question, anymore, that one can declare a cellphone as a "basic local telephone service . . . provided to any residence" -- and I must assert that many, published reports support my claim.
Please 'call' my 'bluff' with solid rebuttals of my claim, or, else, admit the 'wedge' that technology lately has provided.
Very truly yours, TaxCPANY

The code is behind the times. The code says

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.

Note that it says "provided to any residence of the taxpayer..."

In other words, I could have five different residences. Under the code, the 1st line to each and every residence is considered a non-deductible personal expense.

My take is, a cell phone is not a telephone line provided to any particular residence. Therefore, code section 262(b) cannot apply to a cell phone. In theory, you should be able to deduct the business portion of your cell phone, even if it is the only phone you have.

Of course, I'm not going to argue the point in court because a court would probably say section 262(b) was written years before the general public began replacing their land lines with cell phones.

[oceanlovin'ea]

Not arguing point

I am not arguing that we should be able to deduct land lines. I think we all think we should but that is not what the code says so we can't do it. How does this get changed? Does someone have to argue the point before the IRS and get a ruling? Or what?

I am working on a return now. They are a small schedule C business who contract with a trucking company. She does a lot of office work and dispatching of drivers, etc. Her husband drives a truck. Their cell phones are used for business but the land line she uses for faxing reports etc. Probably 90% of that line is business use. I know I can't take it but it is not fair.

Even Verizon and the phone companies have bills that are one charge for everything. So there is no more long distance calls, no extra packages. Now these people get nothing. Cable phones are the same.

People like this are small businesses that work out of their home and to have a "business" listing would be too high of an expense. So they are just out of a deduction. So I am just complaining......and grumbling......not fair!.....not fair!!

Linda, EA