IRS Eying Your Company-Issued Cell Phone

Tax would consider your electronic leash a fringe benefit

By Scott Ross
|  Friday, Jun 12, 2009  |  Updated 9:36 AM EDT
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IRS Eying Your Company-Issued Cell Phone

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"Ben, congratulations on the Super Bowl. Now about that cell phone ..."

As the federal deficit balloons, the Internal Revenue Service is scrambling to find even more ways to reach into your already dwindling savings. The tax man's latest target is the cell phone your boss makes you carry. Only the IRS would consider your boss having a private line to you a taxable benefit.

Back in the go-go '80s, when only the filthy rich had cell phones (the size of a baby), the IRS levied a tax that required people to track and pay taxes on the value of the personal cell phone calls they made. It was an effort to prevent people from getting cell phones for personal use and writing them off as a business expense.

"The rationale behind this policy perhaps made sense in the 1980s, but it doesn't reflect how people live their lives and the ubiquitous nature of cellphones," Sprint Nextel spokesman John Taylor told The Washington Post.

Now the IRS is contemplating just hitting you with a 25% tax on that BlackBerry or cell phone you're forced to carry on you at all times. For someone in the 28% tax bracket whose phone costs $1,500 would get squeezed for more than $100, The Wall Street Journal has calculated.

There are few things the IRS loves like a phone tax, the first of which was levied to fund the Spanish-American War and wasn't repealed until 2006.

"The IRS is seeking comment on the proposals until Sept. 4," according to The Post. They're sure to get plenty.

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