What Won’t They Tax? Company Phones Next

The IRS is looking to actively enforce its complicated tax codes on company-issued mobile phones. The Wall Street Journal explains:

The Internal Revenue Service proposed employers assign 25% of an employee’s annual phone expenses as a taxable benefit. Under that scenario, a worker in the 28% tax bracket, whose wireless device costs the company $1,500 a year, could see $105 in additional federal income tax.

According to a 1989 law, workers are required to count the value of personal calls as a taxable expense and report it on their returns. Complying with the tax would be annoying to say the least and extremely time consuming. At the margin, some employees would likely avoid company-issued mobile phones possibly at the expense of their clients to avoid the compliance costs.  This tax could cost Americans millions of dollars in time and lost business if the IRS pursues it.

We should scrap our complicated tax code that costs Americans hundreds of billions of dollars each year in compliance alone including the mobile phone tax and replace it with a flat tax.


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