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The Mobile Cell Phone Act of 2009 (S 144/HR 690)

IRS proposal for record-keeping relief

Cell Phone Record-Keeping Relief

Since 1989, employers and employees have been required to keep a log of business and personal use of employer-provided mobile communication devices to substantiate costs that are allowable as business expenses. Cell phone and other mobile communication plans today provide free minutes, and in many cases unlimited calling, making it extremely difficult to separate business from personal use. The realities of mobile communication devices no longer justify the administrative burden caused by the record-keeping requirement. Failure to complete an employee-use log has been raised during IRS audits of charities.

Current Status
Legislative Solution
Legislation (S 144/HR 690) to repeal record-keeping requirements for employer-provided cell phones and other mobile communications devices has been introduced by Senator John Kerry (D-MA) and by Representative Sam Johnson (R-TX).

Regulatory Solution
The IRS has asked for comments on ways to simplify accounting for an employee’s business use of employer-provided cell phones or other similar devices. The IRS has proposed four methods that would eliminate the need to maintain a log of calls and usage: two methods to establish minimal personal use, a safe harbor substantiation method, and a statistical sampling method. Under current law, costs that cannot be documented as business expenses should be treated as employee benefits that are taxable income for the employee. Comments are due September 4. See IRS Notice 2009-46 for the complete proposal. See statement of IRS Commissioner Doug Shulman on the need for simplifying cell phone record-keeping.

Take Action
Talking Points

Sample Letter

Background
In the 110th Congress, a version of the bill was adopted by the House as a part of the Taxpayer Assistance and Simplification Act (HR 5719), but was not acted on by the Senate.

Last year, Independent Sector supported similar legislation, sending letters to Representatives Johnson and Pomeroy regarding HR 5450 and to Senators Kerry and Ensign for S 2668, the Modernize Our Bookkeeping in the Law for Employee's Cell Phone Act of 2008.

IS Letter in support of S 2668 (PDF)...5/14/08
IS Letter in support of HR 5450 (PDF)...5/14/08

Last Updated: June 17, 2009