IRS commissioner wants to repeal federal cell phone tax
Employers, employees, and mobile industry executives (wow, that covers just about everyone, doesn’t it?) who were worried about stricter taxation on the personal use of business cell phones may be able to relax. Internal Revenue Service Commissioner Douglas Shulman released a statement today asking Congress to repeal the tax, and he said Treasury Secretary Timothy Geithner also supports that move, according to Reuters.
The federal tax in question was approved in 1989, and says that personal calls on a business phone count as income, rather than a business expense, and must be taxed accordingly. Which seems logical, until you try to keep track of which is which — cell phones are a great demonstration of the ways technology is making it harder to disentangle work and personal lives (says the reporter writing a blog post for work on his personal laptop, which I will then post via my home wireless connection).
Even the IRS acknowledged that this might be impractical, and when it called for comments on its plans to start enforcing the law more strictly, it offered some alternatives to detailed record-keeping. For example, employers could just assume 25 percent of all calls are personal. That kind of enforcement wouldn’t just be a pain for employers and employees, but potentially for mobile carriers too — in 2009, businesses will spend $59 billion on mobile phone service for employees, according to In-Stat data cited in the Wall Street Journal.
Of course, just because someone in the government says a law will be repealed, that doesn’t mean it will. But with industry groups complaining, the head of the IRS criticizing the law (echoed by President Barack Obama’s appointed treasury secretary), plus to fact that the House of Representatives passed a repeal last year, it’s hard to imagine anyone will push to keep the tax alive.
[photo:flickr/KB35]
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About the Author, Anthony Ha
Anthony is VentureBeat's assistant editor, as well as its reporter on enterprise technology, cloud computing, and tech policy. Before joining VentureBeat in 2008, Anthony worked at the Hollister Free Lance, where he won awards from the California Newspaper Publishers Association for breaking news coverage and writing. He attended Stanford University and now lives in San Francisco. Reach him at anthony@venturebeat.com. You can also follow Anthony on Twitter.