This week be begin a new series of lessons focusing on the legal and tax consequences of using cell phones.
A church provides its pastor with a cell phone, and pays the standard monthly fee of $80 for a specified number of minutes. The pastor keeps no records to establish the business use of the phone. The church treasurer assumes that none of the monthly cell phone payments made by the church should be reported as taxable income to the pastor since the phone was provided for business and not personal use. Is this correct? For the current year, the church not only made twelve monthly payments of $80, but paid an additional $300 for minutes in excess of the maximum allowed under the plan. Should any of the payments made by the church have been reported as taxable income to the pastor? If so, how is this done?
Instructions Click on the correct answer for each of the following ...