Tax Law
Employee Cell Phones Cost Companies Big Bucks in Back Taxes
Posted Aug 4, 2008, 08:09 am CST
By Debra Cassens Weiss
Employers that hand out cell phones to their workers are being billed hundreds of thousands of dollars in back taxes for failing to report the fringe benefit as income to the users.
The tax laws require employees to keep detailed records that separate business from personal calls made on the phones, the Los Angeles Times reports. Companies that have not asked workers to comply are now being asked to pay additional taxes to cover the value of cell phone service.
The University of California at Los Angeles has received a bill for $239,000 in back taxes while the University of California at San Diego was required to pay $186,000, the story says.
Proposed federal legislation would remove cell phones from the list of taxable fringe benefits.