In 1989, cell phones were not in common usage, were unlikely to fit in your pocket and were expensive to purchase and use. Today, they are quite cheap and commonplace - even kids often have their own cell phone. In 1989, Congress made cell phones "listed property" due to concerns over personal use and too favorable of tax deductions. Despite the tremendous changes in cost and usage, they remain listed property. This is another area of the law that needs to be brought into the 21st century.
As listed property, extensive records (such as for every call made) must be maintained in order to get any business deduction for a cell phone used by an employee. Some taxpayers, including UCLA, have been hit is significant tax bills for not following this outdated law. The IRS has proposed simplification options for which they are seeking public comment. Now, that is a waste of time! The IRS has plenty of things to do - why should they be taking time to draft rules to simplify a statutory provision that should no longer be in the statute?
It is past time for Congress to fix the law so that cell phones are no longer listed property.
I have a short article from the AICPA Tax Insider with more details - please take a look - here.
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