Good News for Taxpayers
IRS Issues Guidance for Employer-Provided Cell Phones
Although, the Small Business Jobs Act of 2010 eliminated the “listed property” reporting requirements for cell phones and other similar items, the personal use of an employer-provided cell phone was not addressed.
The IRS has now released Notice 2011-72 in connection with the income tax treatment of employer-provided cell phones.
This Notice applies to any post-December 31, 2009, use of an employer-provided cell phone. It states that an employee’s business and personal use of an employer-provide cell phone is a de minimis fringe benefit, excludible from income if the cell phone is issued for business reasons rather than as a compensatory benefit.
Employers should adopt a written policy that confirms that employer-provided cell phones are issued primarily for a business purpose, (such as constant communication, etc) in compliance with the allowable treatment under the Notice.
Please call your Eide Bailly representative to discuss this matter further.