mW SMART Platform from mindWireless Enables Corporations to Comply with IRS Tax Regulations on Personal Use of Corporate Cell Phones
Houston, TX, June 23, 2009: Heightened visibility on an IRS regulation created in 1989 to tax personal calls made with a corporate cell phone has ignited debate on the regulation as outdated, overly burdensome and unnecessary. The level of detail needed to comply with this regulation, and other corporate governance requirements is available wireless telecom expense management (TEM) provider mindWireless’ fully automated mW Smart software platform.
Passed at a time when only the wealthiest professionals used brick-sized cell phones costing $1,000 and $.50 per minute, few companies enforce the tedious record-keeping rule. Compliance has not been enforced by the IRS because BlackBerrys, , PDAs, cell phones and laptops have become standard fixtures for workers.
Easy access to detailed user data lets managers identify and validate personal usage
“Using millions of data records in our client database, we researched apparent wireless personal use, mostly looking for after hours calls to the same number and that number appearing during work hours,” said David Wise, co-founder and managing partner of mindWireless. “Over the years we’ve consistently found that personal use of a corporate device has generally been minimal” “Our mW SMART platform has enabled managers to identify suspected calls since the release of its mW SMART platform in 2004. Options make it easy for managers to review and tag calls for validation by the employee, and the B2B integration launched mid-2008 streamlines any tax information that must be sent to payroll.
Congress Debating Repeal of Personal Cell Phone Tax - IRS Regulation May be Repealed
An article in the June 13, 2009 Washington Post reported that Reps. Sam Johnson (R-Tex.) and Earl Pomeroy (D-N.D.) sponsored legislation last year to repeal the statute. It passed the House but not the Senate. Those lawmakers, as well as Sens. John F. Kerry (D-Mass.) and John Ensign (R-Nev.), have introduced similar bills this year, with the endorsement of the Obama Administration.
Meanwhile, the IRS is exploring three options to simplify the record-keeping process:
- Assign 75 percent of cell phone use as work-related and the remaining 25 percent as personal with employees taxed on personal use.
- Employees provide proof of a personal cell phone available during work hours.
- Employers use a statistical sampling to determine the average workers' personal use of the cell phones.
Whether the regulation is overturned or the IRS simplifies compliance, having access to accurate and complete data is critical to avoid fines or back taxes. Implementing a comprehensive wireless TEM solution, such as mindWireless with full process automation and monthly cost optimization, is still a sound strategy that will deliver greater visibility into overall wireless usage and expense.
About mindWireless
mindWireless helps Fortune 1000 companies manage their wireless devices and usage through technology and outsourcing solutions. Rated “Positive” in Gartner’s “MarketScope: Telecom Expense Management (TEM), 2008,” mindWireless was founded in 2000 and has grown rapidly to become a leader in the corporate mobility management market with corporate mobility services deployed worldwide. For more information, visit www.mindwireless.com.
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