The Corner

More on the IRS Taxing Phone Use

The Wall Street Journal has more on the IRS’s idea to close the deficit gap:

The IRS believes that some percentage of the costs incurred by employees using company-provided wireless devices should count as a “fringe benefit” and thus be subject to taxation. Since workers inevitably end up taking personal calls or emails, the thinking goes, it’s only fair that they pay for the privilege. What’s next? Maybe a per-cup tax on office coffee, or targeting furtive visits to ESPN or Hulu on the office PC? As one wag put it on the Journal’s Web site, “It’s like charging for the use of the company washroom.”

The IRS isn’t proposing a new rule per se, merely planning to strictly enforce a 1989 law requiring workers using company phones for personal use to include the value of those calls as income. But in effect it’s the same thing, given the inherent difficulties of distinguishing the work from the personal when employees are expected to remain tethered to the office 24-7. The IRS suggests that businesses automatically assign 25% of annual phone expenses as a taxable liability — unless employees could provide proof that they used other forms of communication during work hours. We think most taxpayers will agree that preparing for April 15 is stressful enough already.

Read more here.


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