Are cellphones a company perk?

Your company gives you a cellphone. Should the income tax meter start ticking when it does?

There’s considerable pushback developing, the L.A. Times reports, over the IRS rule that few employers — and even fewer employees — know about. You, the employee, are supposed to keep detailed records of which calls are “personal” and which are “business.” If you don’t, the IRS figures the phone and the wireless service are perks, and taxable.


Most employers were unaware of the rules until the last few years, when the IRS began cracking down and requiring additional taxes to cover the value of the cellphone service provided to employees.

UCLA, for example, was hit with a $239,196 bill this year after IRS auditors found that employees with cellphones were not keeping logs. UC San Diego had to shell out $186,471 for the same reason.

“It’s completely unreasonable to have to keep track of calls at that level,” said Mike O’Neill, payroll and tax manager for the UC system. “Especially as the costs of these devices have come down, you can get these mega-minute plans where there’s really no additional cost” for personal calls.

  • bigalmn

    The next perk will be the web access you have at work. How much time did you spend on your computer on the web for personal business today. You will need to pay back your wages, pay for the minutes used.