Labor Day and Listed Property: Help Hard Working Americans By Repealing Outdated IRS Rule

This past holiday weekend marked an important time to highlight a critical wireless issue for businesses and consumers that we’ve been discussing for about a year now. It’s an issue that has a negative effect on jobs and businesses right now, and could definitely impact workers, consumers and families in an even more serious way down the road if not handled properly. 

The issue is “listed property” and how the IRS officially views cell phones issued by companies to their employees. The deadline to file comments on the IRS listed property issue was September 4th, and with yesterday being Labor Day, I think it’s a perfect time to look at what Congress can do when it comes back to D.C. to help hard working American workers. 

As we were celebrating Labor Day, Americans rested up and finished the summer strong, while honoring the real backbone of our nation’s society – the American workers. And in today’s economic climate, it’s particularly important to think of ways to make for a better workplace experience for both employers and employees. I’m talking about enhancing productivity, and having an even more positive impact on the bottom line. These days a wireless device truly has become a daily necessity and a must-have tool for many employees to maintain efficiency and increasing productivity, and we should be doing all we can to encourage its use.

Here’s the problem though – If your employer provides you with a wireless device (e.g. smart phone or cell phone), you have to keep a detailed log of all your activity on the work-provided wireless device. Then your employer must compile that data for the IRS to tax you for any personal calls, e-mails or texts made with that device.  That use is known as “listed property.” It sounds outrageous, but that requirement is already part of our tax code. 

Disturbing? Of course it is.
 
Thankfully, back at the beginning of summer IRS Commissioner Shulman and Treasury Secretary Geithner issued a statement backed by the White House that it must be ‘clear that there will be no tax consequence to employers or employees for personal use of work-related devices such as cell phones provided by employers.’ 

With the Administration clearly now on board, it’s important to note that the U.S. Congress has the power to repeal a ridiculous provision of the Internal Revenue Code of 1986, which today only increases bureaucracy, stifles businesses and employees and creates more unnecessary government red tape. 

The good news is that the companion legislation from both sides of Congress has been introduced this year to prevent the IRS from imposing this ridiculous law. Senators Kerry (D-MA) and Ensign (R-NV) have introduced bipartisan legislation, S. 144, with 62 co-sponsors in the Senate, and Representatives Pomeroy (D-ND) and Johnson (R-TX) have introduced a bipartisan bill, H.R. 690, with 105 co-sponsors in the House. 

Passing the “M.O.B.I.L.E. Cell Phone Act of 2009” would repeal that poorly understood tax law. It will update an outdated archaic piece of the U.S. tax code, that if enforced only hinders wireless consumers' and businesses' efficiency and productivity. Our federal representatives can protect small businesses, workers and consumers. And what better time is there than to recognize the American worker than right after Labor Day to have Congress step up and pass the MOBILE Act?

Later this week we’ll link to a discussion on listed property with Bill Rys, Counsel for Tax Policy at the National Federation of Independent Business (NFIB), who dropped by to talk about the issue and their membership.
 
To learn more about this issue, please click here.

To take action by contacting your elected officials, please click here.