Congress recently did a good thing. Next week, after President Obama signs the bill, your cell phone is no longer mandated to be used exclusively for business nor is it considered a personal luxury anymore, its a necessity. So you don’t have to distinguish between business and personal use when you use your wireless phone or blackberry.
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PRNewswire-USNewswire/ –September 23, ”The U.S. House successfully passed the ‘Small Business Jobs Act,’ H.R. 5297, by a vote of 237-187. Included in it was language from the overwhelmingly bipartisan ‘MOBILE Cell Phone Act of 2009,’ (Modernize Our Bookkeeping in the Law for Employees), or the House and Senate companion bills (S. 144 and H.R. 690). The package now heads directly to the President’s desk for signature into law.”
“The measure would remove cellular telephones, smartphones and similar wireless communications devices from application of the Internal Revenue Service (I.R.S.) “Listed Property” rules under section 280F, and alleviate a burdensome tax measure imposed on business and employees because of their employer-provided wireless devices. Under the existing I.R.S. regulations, employees receiving a work-provided wireless device for day-to-day usage are required to keep a detailed phone call log on any personal use (calls, emails, texts, tweets, etc.) of that cell phone provided for under the work plan, and should pay income tax on that ‘benefit.’ The ‘MOBILE Cell Phone Act of 2009′ eliminates that archaic regulation, providing relief to American workers in companies of all sizes.”
What does this mean for telecom audit clients? Companies no longer have to distinguish between business use of wireless devices and personal use of those devices nor do they have to train their employees and mandate them to keep meticulous records of wireless usage. Previously, company cell phone policies had to mandate that any personal use of business cell phones be documented by time and cost. With the passage of the new legislation, that is no longer a mandate by the IRS. This will make cell phone bill audit projects much easier.
The outdated requirement was put into effect in 1989 when cell phone devices were not commonly used and were considered a luxury, used mostly by upper management in some organizations. Therefore, they were considered subject to a luxury tax when employed as a personal tool. However, with the explosion of wireless devices by most consumers, the old law and mandate became outdated. Many companies simply disregarded the requirement, however, many companies took it seriously and mandated that their employees strictly comply with the cell phone usage record keeping and rule as it was still a requirement by congress and the IRS.
Again, the legislation will make cell phone audits and cell phone policy much clearer and easier to administer.
Ready for your cell phone policy? Do you need a cell phone audit or cell phone policy for your company or organization? Contact the cell phone bill audit professionals today.