IRS Drops Plans for Cell Phone Guidance, Urges Legislative Action

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January 15, 2010

IRS Commissioner Doug Shulman announced during a January 8 interview on C-SPAN's Newsmakers program that the IRS will not move forward on plans to draft guidance related to employer-provided cell phones, in anticipation of passage of bills to remove them from listed property.

In 2009, IRS published proposed guidance for employers to use in determining employees' personal use of cell phones (IRS Notice 2009-46) and NACUBO's comments. Shulman's remarks indicate that the Service had dropped development of final rules in the hope of passage of H.R. 390/S. 144, the Modernize Our Bookkeeping in the Law for Employees (MOBILE) Cell Phone Act of 2009. While the bills have widespread support in both the House and Senate, they are unlikely to pass as stand-alone bills.

Shulman stated, "We're quite hopeful Congress is going to act on this. In the meantime, we're not doing anything special or moving forward with any initiatives." This means that no guidance will be drafted or published. However, until legislation is enacted, the existing rules on listed property are in effect and could create an issue for colleges and universities under audit.