Employer Reporting for Cell Phones

Recently one of our clients asked the following question: “What should we (organization) do regarding employer-provided cell phones? Should we be taxing the employees through payroll (imputed income)? We have approximately 10 employees that we provide cell phones for. We believe they all use the phones for both business and personal use, but only I can say for myself how much is personal vs. how much is business. I understand that last year the IRS was going to make a major change in their requirements for personal cell phone use taxation on business provided cell phones, but I don’t know if they ever did. What should we be doing?”

This is a very common question for all organizations, not just tax-exempt entities.

Here was my response for this very timely question: Read the rest of this entry »