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Guidance Issued on Tax Treatment of Business Cell Phones - Emil Estafanous, CPA : Emil Estafanous, CPA

Guidance Issued on Tax Treatment of Business Cell Phones

The IRS released a notice on Sep 14 providing superintendence on a taxation diagnosis of employer-provided dungeon phones now that they have been private from a clarification of listed skill (Notice 2011-72). The notice discusses a diagnosis of employer-provided dungeon phones as an excludible border benefit.

The IRS says it has perceived questions about a taxation diagnosis of employer-provided dungeon phones and identical telecommunications apparatus in a arise of changes enacted by a Small Business Jobs Act of 2010 (P.L. 110-240). Prior to a act, dungeon phones were enclosed underneath a Sec. 280F clarification of “listed property” and, for employers to concede a cost of dungeon phones they supposing to employees, a despotic confirmation mandate of Sec. 274(d) had to be met.

The Small Business Jobs Act private dungeon phones from a clarification of listed skill for taxation years commencement after Dec 31, 2009. However, a IRS points out that a act did not differently change a requirement that an employer-provided dungeon phone be treated as a border benefit, a value of that contingency be enclosed in a employee’s sum income, unless an ostracism applies. The act also did not impact a intensity diagnosis of an employer-provided dungeon phone as an excludible border benefit.

The IRS says that a value of a business use of an employer-provided dungeon phone is excludible from an employee’s income as a operative condition border to a border that, if a worker paid for a use of a dungeon phone, a worker would be means to concede such remuneration as a trade or business responsibility underneath Sec. 162.

For such diagnosis to apply, a dungeon phone contingency be supposing to a worker for noncompensatory business reasons, for example, to pronounce with clients when divided from a office. The notice says a dungeon phone supposing to foster worker spirit or goodwill is not supposing essentially for a noncompensatory business reason.

The notice says that, if an employer provides an worker with a dungeon phone essentially for noncompensatory business reasons, a IRS will provide a employee’s use of a dungeon phone for reasons associated to a employer’s trade or business as a operative condition border benefit, a value of that is excludible from a employee’s income. The IRS will also provide any personal use of such a dungeon phone as a de minimis border benefit, excludible from a employee’s income.

The manners in Notice 2011-72 request to any use of an employer-provided dungeon phone occurring after Dec 31, 2009.

About Emil Estafanous, CPA
Certified Public Accountant (CPA) Tax Professional committed in representing taxpayers and resolving their tax problems.

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