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The House passed a number of tax-simplification provisions last week as part of the Taxpayer Assistance Act of 2010 (HR 4994), including the elimination of the requirements for strict substantiation of business use of employer-provided cell phones and similar telecommunications equipment.

H.R. 4994, which passed on April 14 by a vote of 399 to 9, reflected a proposal included in the Obama Administration's FY 2011 budget calling for removal of cell phones from being designated as listed property under section 280F of the Internal Revenue Code.  Treasury and IRS officials have publicly supported the proposal, noting the unreasonable burden it creates for employers as well as individuals.  A Senate measure, (S. 144), was introduced by Senator John Kerry (D-MA) last year.

The timeline for consideration of the cell phone measure by the Senate is unclear.  It is likely to be attached to a larger piece of tax legislation -- perhaps a tax package dealing with expiring provisions and other matters -- which the Senate could consider as early as May.


Mary Bachinger

Director, Tax Policy


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