Al Weigand
Managing Consultant
Abilita Telecom Consultants
aweigand@abilita.com

Although most of us perceive the current Congress as unable to accomplish anything beneficial to business, there are some exceptions.  On Monday, September 27th, President Obama signed H.R. 5297 the "Small Business Jobs Act", which includes language that finally strikes that section of the IRS tax code that declares cellular telephones to be "listed" property and therefore subject to taxation as an employee benefit. 

For those businesses who have been struggling with how to effectively calculate the taxable value of a cell phone provided to an employee, H.R. 5297 has just made your life easier.  As you may recall, early in 2009 the IRS solicited comments on specific methods of tracking the "personal use" of a company provided cell phone, only to be met with a barrage of negative comments about the insanity of this section of the tax code as well as the tremendous burden of recordkeeping required to pass an audit. 

The IRS, in an unprecedented move, withdrew their proposals and effectively threw in the towel.  IRS Commissioner Doug Shulman went as far as to urge congress to pass legislation to end the tax, acknowledging that it was unreasonable.  

Fast forward to September 2010, and an amazing thing has happened - congress listened and actually acted.  Not only that, but the change is retroactive to December 31, 2009 and it is a permanent modification of the tax code. 

A small victory for all businesses!