Employer-Provided Cell Phones for Business Are Nontaxable Benefit, IRS Says in Guidance

Business and personal use of a cell phone that an employer gives an employee primarily for non-compensatory business reasons is generally nontaxable to the employee, the IRS said Sept. 14 in new guidance.

In Notice 2011-72, IRS clarified tax treatment of employer-provided cell phones or other similar telecommunications equipment as excludible fringe benefits.

The Small Business Jobs Act of 2010 removed cell phones from the definition of listed property for taxable years beginning in 2010. Under tax law, listed property normally requires additional recordkeeping by taxpayers. IRS said it will not require recordkeeping of business use for taxpayers ...