The IRS is looking to revamp a 2o year old law regarding employee use of company cell phones. The law requires employers to track the amount of time employees spend on personal calls. This is considered benefit income and can be taxed. This law was not very popular because of the tedious task of tracking employee personal phone calls. But now the IRS is receiving increasing inquires on reviving this law. From now until September 4th, the IRS is accepting comments regarding the proposed changes. The IRS has come up with three possible methods of how this law will work.
The methods are:
- Minimal Personal Use Method: This method requires that employers limit calls to minimal use and track the minimal use by employees.
- Safe Harbor Substantiation Method: This method requires an employer to use a percentage to determine the portion of time considered business use and non business use.
- Statistical Sampling Method: Employers would use a statistical sampling method to determine the amount of time considered business and non business use.
For more information, visit the IRS website at
http://www.irs.gov/govt/fslg/article/0,,id=209572,00.html.
What are your views on these proposed changes?