IRS Hangs Up on Effort to Overhaul Rules on Cellphone Tax

The Internal Revenue Service announced yesterday that it would give up on efforts to change how employer-provided cellphone benefits are taxed.

In addition, the IRS commissioner, Douglas Shulman, called on Congress to change the existing tax on cellphones, which has kept many colleges from providing them to faculty and staff members, according to a blog post by Paul L. Caron, associate dean of faculty at the University of Cincinnati College of Law.

Under the existing tax code, the cost of the cellphone service is added to employees’ gross income, unless they can prove that they used the phone only for work.

Wireless companies are lobbying to kill the existing law, but they have resisted the IRS’s proposed change, which would allow employees more leeway to use the phone for personal use. —Eric Kelderman