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Obama disconnects 'obsolete' cell phone tax

'Burdensome, poorly understood' law hung up

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The US revenue service has made clear it is binning a controversial tax on personal use of employer supplied devices such as cell phones and BlackBerries.

The law was introduced in 1989 and meant that personal use of mobiles provided by employers would be taxed as a benefit. Last week, the Internal Revenue Service asked for ways to better enforce the law, which has tied people up trying to work out which calls were for work and which were private.

Given bundled deals with free minutes, or free evening calls, this process was becoming even more meaningless. With data charges also meant to be divided into work and private use, the situation is even more confusing.

Doug Shulman, commissioner at the IRS, said the law was, "burdensome, poorly understood by taxpayers, and difficult for the IRS to administer consistently".

Shulman said there was no intention to crack down on personal use of business-provided cell phones.

Therefore he said, "there will be no tax consequence to employers or employees for personal use of work-related devices such as cell phones provided by employers. The passage of time, advances in technology, and the nature of communication in the modern workplace have rendered this law obsolete."

Full statement is here. ®

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