Archive for the ‘IRS’ Category

Taxing Cellphones

Thursday, June 11th, 2009

According to The Wall Street Journal, The IRS is considering taxing cellphones provided by employers. Currently cellphones and the cellular service that employees receive from employers is considered a fringe benefit and taxed fully by the I.R.S. Most people and corporations don’t enforce it.

Any change in the tax law even if it is only taxing cell phones as being personal use 25% of the time. Increased enforcement would be the equivalent of a tax hike. When the tax law was established on cell phones in 1989, cell phones were a luxury. Cellphones have now become a necessity and to tax them as a corporate luxury would be ridiculous.

Do the taxpayers get something in exchange for this tax hike? Probably not.