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Will Congress Relax the Cell Phone Rules?

Legislation would make claiming cell phone usage as a business expense much easier.

Background. Many churches provide cell phones to some employees. This can raise special tax concerns, due to the fact that cell phones are designated as "listed property" by section 280F of the tax code.

Listed property includes various items that are acquired for business use but that lend themselves to personal use as well. This includes automobiles, computers, and entertainment or recreation-related items. The tax code imposes stricter substantiation rules on these kinds of property to ensure that any personal use is identified and reported as taxable income.

In 1989, cell phones were added to this category because the cost of acquiring and using them was so steep that Congress was concerned that taxpayers would claim inflated business expense deductions and reimbursements without reporting the inevitable personal use as taxable income. Over the years, as the cost of acquiring and using ...

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  • May 1, 2008