Sam Johnson

Washington, Oct 14 -

Dear Chairman Rangel and Ranking Member Camp:

The undersigned colleges and universities urge the House and Senate to remedy an outdated IRS record-keeping requirement governing use of employer-provided cell phones and other electronic communication devices.  Current IRS rules impose an onerous burden on higher education and other employers across the country.   

To correct this outdated policy, which treats employer-provided cell phones as a taxable fringe benefit, Representatives Earl Pomeroy (D-ND) and Sam Johnson (R-TX) and Senators John Kerry (D-MA) and John Ensign (R-NV) have introduced the MOBILE Cell Phone Act of 2009 (H.R. 690 and S. 144). A similar proposal was approved by the House in April 2008 as part of the Taxpayer Assistance and Simplification Act, but was never enacted. 

In 1989, when Congress passed legislation treating employer-provided cell phones as a fringe benefit similar to company cars and other executive perks, cell phone technology was in its infancy and no one imagined they would become the critical tools of convenience for business and daily life they are today.  In 1989, they were big and bulky, expensive and rarely used.  Today, they are practically an appendage.  They are much less expensive to use and practically no one goes anywhere without their cell phone. 

Because the 1989 cell phone law has not been updated to keep pace with changes in technology and business practices, the current IRS regulations consider employer-provided cell phones to be a fringe benefit taxable to the employee.  Recently the Service began enforcing these rules requiring employees to maintain detailed records of their business and personal use of employer-provided cell phones, BlackBerrys and similar devices.  If these records are not kept, current law recognizes cell phones as a fringe benefit, the value of which must be included as taxable income to the employee, increasing the tax burdens and costs for both employers and employees.

As Senator Kerry points out, “the tax code should keep pace with technological advances.  There is no longer a reason that cell phones and mobile communication devices should be treated differently than office phones or computers.”

Even the IRS now acknowledges that the current law is burdensome, and on June 16th, IRS Commissioner Doug Shulman said he was joining with Treasury Secretary Tim Geithner to urge Congress to repeal current law.  “The passage of time, advances in technology and the nature of communication in the modern workplace,” Shulman said, “have rendered this law obsolete.”

We agree with the IRS that it makes no sense for the tax rules to treat employer-provided desk phones in offices any differently than employer-provided cell phones and electronic communications devices.  Both are necessary communications tools to conduct work efficiently.  Under the current rules governing cell phones, institutions of higher education and all businesses face tax penalties if they do not require employees to keep detailed logs of their cell phone use.

We respectfully ask the Congress to approve the MOBILE Cell Phone Act of 2009 and to relieve higher education and employers across America of these outdated, unreasonable, and costly record-keeping requirements.

Sincerely,

University of Alabama

University of Arizona

Arizona State University

Asbury College

Auburn University

Bates College

Berea College

Brescia University

Brown University

California Lutheran University

California State University

Case Western Reserve University

Centre College

University of California

California Institute of Technology

University of Chicago

Clemson University

College of New Rochelle

Columbia University

Cornell College

Cornell University

Creighton University

Dominican College

Dordt College

Duke University

Emory University

Emporia State University

Ferrum College

University of Florida

Fort Hays State University

Fresno Pacific University

Georgetown University

Harvard University

Hiwassee College

Indiana University

University of Iowa

Iowa State University

Johns Hopkins University

Kansas State University

Kentucky Community & Technical College

System

University of Kentucky

Lehigh University

LeTourneau University

Loyola University New Orleans

University of Massachusetts

University of Michigan

University of Missouri System

University of Montana

University of Nevada, Las Vegas

Nevada System of Higher Education

University of New Mexico

New York University

University of North Carolina-Chapel Hill

Northwestern University

Northern Illinois University

Norwich University

The Ohio State University

Ohio University

University of Oregon

Penn State University

University of Pennsylvania

University of Pittsburgh

University of Rochester

Rochester Institute of Technology

Roosevelt University

Rutgers, The State University of New Jersey

University of San Francisco

University of South Carolina

South Dakota State University

St. Francis College

Stanford University

State University of New York

Syracuse University

Temple University

Tennessee State University

University of Texas System

Texas A&M University System

Tulane University

University of Utah

Vanderbilt University

University of Washington

University of Vermont

University of Virginia

Washington University in St. Louis

West Virginia University

Western University of Health Sciences

Wheelock College

University of Wisconsin-Madison

University of Wyoming

Yale University

cc:           Members of the House Ways & Means Committee