IRS wants to tax cell phone use

The IRS wants to tax the use of cell phones issued to individuals as a fringe benefit. According toThe Wall Street Journal, "The Internal Revenue Service proposed employers assign 25% of an employee's annual phone expenses as a taxable benefit."

It is not a novel idea. Since 1989, the IRS has expected people who use company-issued phones for personal calls to count the value of those calls as income.

The question for the mobile phone industry, particularly companies like RIM (RIMM), which sells its Blackberry primarily for business use, will see any drop off in sales if the IRS is effective in enforcing the rule.

The tax could end up being "regressive," thereby decreasing use of the thing it wishes to tax. That still could bring the IRS revenue, but it may make some people think twice about how and when they use cellphones.

A recession makes for odd notions from the government about how it can raise income to offset deficits. Maybe cell phone use will lower the national debt.

Douglas A. McIntyre is an editor at 24/7 Wall St.

Tax Breaks and Home Ownership

Home ownership brings with it not only many trips to home improvement stores, but also a slew of tax breaks. It's up to you to take full advantage of the write-offs available to you. Here's what you can and can't deduct.

Read More

Brought to you by

Sending Kids to College

TurboTax can help you take advantage of tax breaks to ease the financial burden of sending kids to college, including tax credits, tuition deductions, tax-free savings and more.

Read More

Brought to you by

Tax Aspects of Home Ownership: Selling a Home

Though most home-sale profit is now tax-free, there are still steps you can take to maximize the tax benefits of selling your home. Learn how to figure your gain, factoring in your basis, home improvements and more.

Read More

Brought to you by

How to Avoid Taxes on Canceled Mortgage Debt

If you lost your principal residence to a foreclosure or short sale, TurboTax can help you deal with the tax implications, including recent tax law changes that can offer some relief.

Read More

Brought to you by
Read Full Story
Your resource on tax filing
Tax season is here! Check out the Tax Center on AOL Finance for all the tips and tools you need to maximize your return.

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.