Included in the Small Business Jobs Act of 2010 was a provision that removed cell phones from the definition of “listed property”. As such the tedious recordkeeping requirements necessary for listed property NO LONGER apply to cell phones effective January 1, 2010. This change did not address how to determine the portion of a cell phone usage to include in an employee’s Form W-2 when the employer furnishes a cell phone. Now IRS has issued guidance.
IRS is being pretty lenient in Notice 2011-72 when it addresses the use of an employer provided cell phone. The employee’s business use of the phone is to be treated as a nontaxable working condition fringe benefit. The employee’s personal use of the phone is to be treated as a de minimis fringe benefit. As such, the personal use of an employer provided cell phone is not required to be included in the employee’s Form W-2 as long as the phone is furnished to the employee primarily for noncompensatory business reasons. Examples of noncompensatory business reasons include the employer’s need to reach the employee at all times for work-related emergencies, the employer’s requirement that the employee be available to speak with clients at times when the employee is away from the office, and the employee’s need to speak with clients in other time zones at times outside of the employer’s normal work day.
Reasons the Notice gives that are NOT ACCEPTABLE, and therefore require an inclusion in the Form W-2, include a cell phone provided to promote the morale or goodwill of an employee, to attract a prospective employees, or as a means of furnishing additional compensation to an employee.
Notice 2011-72 should be available at http://www.irs.gov/pub/irs-drop/n-11-72.pdf .
UPCOMING SEMINAR SCHEDULE LISTED BELOW
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September 19 – Wisconsin Association of Accouuntants in Wisconsin Dells. Mary is presenting Ethics and Planning for College and FAFSA. For more information go to wiassociationofaccountants.com, click on Seminars, then on 2011 Annual Convention.
September 19 & 20 – National Center for Professsional Education (NCPE) – David is presenting one day out of the twoo day Partnership and Corporation program. David is in Providence on Monday and in Allentown on Tuesday. For more information go to www.ncpeseminars.com.
September 21 & 22 – Minnesota Chapter of NATP at the Holiday Inn Hotel & Suites in St. Cloud, MN. Topics we will be covering include Research, Audit Proofing Business Returns, Filing Status & Dependency, Form 4797, Schedule C Issues, and Life Estate and Remainder Interest. For more information go to www.natptax.com, click on the Chapters tab, then on Minnesota where you will find a link under Chapter Annual Meeting/Education.
OTHER UPCOMING SEMINARS:
– October 20 & 21 – Colorado Chapter of NNATP at Holiday Inn Denver East-Stapleton.
– October 27 – Northern New England Society oof Enrolled Agents.
– November 4 – Wisconsin Chapter of NATP at BBlue Harbor Resort, Sheboygan WI.
– Various dates – National Center for Professsional Education. Mary and/or David are presenting portions of the Partnership and Corporation seminar as well as the Individual Income Taxes seminar. For more information and a registration form, go to www.ncpeseminars.com.