Business Use of Employer-provided Cell Phone – an update

An employee with an employer-provided cell phone receives a nontaxable working condition fringe benefit to the extent he or she uses the phone for business purposes, and the cell phone cost is a deductible business expense for the employer if the substantiation requirements of IRC Sec. 274(d) are met. On 6/5/09, the IRS requested public comments on several proposals to simplify the procedures for substantiating an employee's business use of employer-provided cell phones. But according to a 1/11/10 article on www.webcpa.com , IRS Commissioner Doug Shulman has "decided against coming up with rules on the taxation of employer-provided cell phones and said the IRS would instead wait for Congressional legislation."

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