The Small Business Viewpoint on Listed Property: IRS Taxation of Employer-Provided Devices

A couple of weeks ago, I spoke with Bill Rys, Counsel for Tax Policy at the National Federation of Independent Business (NFIB), about a couple of tax issues that are important to both their membership and the wireless industry. The NFIB is a small business advocacy association, based in Washington, D.C., with more than 300,000 members around the country and representation in all 50 states.

The first issue we are working on together is known as listed property. There is currently strong support to update the archaic and outdated IRS tax treatment of employer-provided wireless devices. Right now, the law says that if you use that cell phone for personal reasons (such as calls, emails, texts), it’s a fringe benefit and is subject to income tax. As an employee, you’re supposed to keep a detailed ledger of every personal call you make, and as an employer, you're supposed to report that usage for tax purposes. Sounds like a real hassle for all NFIB members, and certainly adds a lot of government red tape.

The good news is that bi-partisan legislation called the “M.O.B.I.L.E Act” from both sides of Congress (S. 144 and H.R. 690) has been introduced to remove wireless devices from the IRS listed property rules. In addition to strong Congressional support, IRS Commissioner Shulman and Treasury Secretary Geithner have voiced their support for repealing this measure.

I asked Bill how his membership feels about the listed property tax law and what NFIB is doing to help repeal this IRS rule.