IRS, Treasury Want Cell Phone Tax Repealed

STEPHEN OHLEMACHER

WASHINGTON (AP) — Company-issued cell phones might feel like a tether to the office even in workers' off-hours. The phones also are a taxable fringe benefit, and the Obama administration wants to change that.

The administration has asked Congress to repeal the widely ignored tax on the personal use of company cell phones, saying it is outdated and difficult to enforce. The request Tuesday came a week after the Internal Revenue Service caused an uproar when it sought ideas for how better to enforce the law.

A 1989 law says workers are supposed to count the value of personal calls on a company cell phone as taxable income. The cell phone tax, however, can be a pain for workers who increasingly use mobile devices for texting, e-mailing and browsing the Internet — sometimes for work, sometimes for personal use.

"There's been very uneven enforcement, said Marianna Dyson, a former IRS lawyer who now is an employment tax and fringe benefits expert with Miller & Chevalier in Washington.

"I think most employers are reasonable. But do I see employers requiring employees to document every single business call?" Dyson said. "It's administratively burdensome."