IRS Now Wants To Repeal Cell Phone Tax

narramissic writes "Last week the IRS caused an uproar when it requested public comments on ways to clarify a decades-old law, seldom enforced, that would tax personal usage of business cell phones. But IRS Commissioner Doug Shulman said that the request for comments did not mean that the largely ignored rule would now be enforced. 'Some have incorrectly implied that the IRS is "cracking down" on employee use of employer-provided cell phones,' Shulman wrote. 'To the contrary, the IRS is attempting to simplify the rules and eliminate uncertainty for businesses and individuals.' And in fact, the IRS is now recommending that the law be repealed, saying that 'the passage of time, advances in technology, and the nature of communication in the modern workplace have rendered this law obsolete.'"

Comments

Hey, ya know: screw the dumb stuff

[smittyoneeach]

If you blow away the 16th Amendment, you can repeal the entire IRS, and the cell phone tax en piss-ant.
Rock on, Leahy: you're a true patriot.
Save the other barrel for the Federal Reserve.
Amputating moral hazard is a bipartisan concern.

Re:Hey, ya know: screw the dumb stuff

[Colonel Korn]

Cool down buddy. Consumption tax flat tax etc are all stupid ideas sold to people like you who are easily persuaded that the grass is greener on the other side. Have you lived in economies that tax goods and services at more than 10%? Can you imagine the kind of tax evasion that goes on, and the parallel cash economy that springs up immediately? How many people you know who evade the simple 5% or 6% local sales tax on the services by the landscaper or the handy man? That is the tax that goes to pay for your own local neighbourhood schools and snow removal. Now imagine how willing they will be to pay a 17% or 22% tax to distant Washington DC? Can you imagine the kind of intrusive systems needed to catch the scofflaws? If you think IRS is intrusive looking at your pay slip, wait till you get IRS demanding you show documentation for having paid tax on your wrist watch and shaving blades.

Do these right wing nutties have any idea of the dangers of a cash economy? Today, in USA, 1$ in cash is worth 1$ in bank. But 1 million dollars in cash is worth lot less than 1 million dollars properly accounted for in the bank. Black money is worth lot less in USA than white money. That is not the case in Mexico, Phillipines, Pakistan, Bangladesh etc. Once unaccounted money gets decent buying power, then corruption sets in. We are paying pittance for our judges, police chiefs,
auditors and law enforcers in general. Once cash economy takes root, corrupt people will work their way into every crevice of power and it would exceedingly difficult to get rid of them.
The source of cash economy is tax evasion. Purely on that account, we should stop drinking the cool aid about consumption tax and such stupid ideas.

All of Europe lives with a VAT, which is a consumption tax. The rates are usually around 20%. Citizens aren't ever asked to show they paid tax - that's put on the businesses. I've seen more under the table money in the US than in Europe, perhaps because the VAT is so much simpler to enforce across the board. Prices in Europe always include tax - no one shakes their fists at the tax markup, and those who have a problem with it don't seem as upset as the typical American who is upset with the income tax.

Re:Hey, ya know: screw the dumb stuff

[EtherMonkey]

Can you imagine the kind of tax evasion that goes on, and the parallel cash economy that springs up immediately?

Is this so much worse than the current situation, where many just charge and pay 15% or higher interest to those wonderful financial institutions responsible for our current economic crisis?

How many people you know who evade the simple 5% or 6% local sales tax on the services by the landscaper or the handy man? That is the tax that goes to pay for your own local neighbourhood schools and snow removal

Not in my state. School budgets, county and local services come out of property taxes. State Sales Tax and State Income Tax goes to big feeding troth in Trenton.

Now imagine how willing they will be to pay a 17% or 22% tax to distant Washington DC?

I already pay that amount. If it comes out as a sales tax then I'm better off because a) I don't have to deal with filing returns and the associated costs, and b) my savings and investments aren't taxed.

Once cash economy takes root, corrupt people will work their way into every crevice of power and it would exceedingly difficult to get rid of them.

Once again, I live in NJ. We already have corrupt people in every crevice of power. Taking power away from the corrupt banks would be an improvement.

Re:Something doesn't smell right...

[eldavojohn]

The IRS wants to get RID of a tax?

Why am I deeply suspicious of this?

What's really going on here? What am I quietly going to get nailed on instead?

I read another article by Reuters about this that is entitled:

Obama backs repeal of tax on personal cellphones

Very little mention of the IRS in that article. They make it sound like Treasury Secretary (Timothy) Geithner got together with Douglas Shulman, the Internal Revenue Service Commissioner, and convinced him to ask Congress to repeal this. Together.

You know, I don't know where the initiative came from, it doesn't really matter. But I found it amusing that a lot of news outlets probably thought "IRS to Repeal Tax"? That cannot sell and sounds like a lie. Better rephrase that to "Obama Cabinet Moves to Repeals Tax."

It's a pun, dude

[smittyoneeach]

http://en.wikipedia.org/wiki/En_passant and
http://en.wikipedia.org/wiki/Pissant

A little clarification is needed here

[bhmit1]

This isn't some "cell phone tax" that companies are charged for owning cell phones. When you buy any equipment to run a business, and that equipment is expected to last more than a year, you have to depreciate it. There's a particular part of the depreciation schedule that you have to fill in for various pieces of technology, like cell phones, where you have to provide a percentage of usage that is personal rather than business. And you're only able to depreciate business use of the phone over a 5 year period.

What the IRS is saying is that the effort to calculate this percentage with itemized statements, and identifying every person called, is usually greater than the extra few dollars of tax they may collect. Contrary to popular belief, the IRS doesn't want your money, Congress does. The IRS is just making sure you've paid the right amount. If you want to be upset at someone for taking your money, be upset at your representatives in the Capital.

Food for thought, if the phone is destroyed or trashed before 5 years are up, I've yet to find a place in the tax code where you can write off the remaining value, and you're no longer allowed to depreciate a destroyed item. Another thought, if you start a company that earns $500k in its first year, but requires $400k in equipment, if depreciation lets you write off $100k, you'll be taxed on $300k of income that first year, or about $100k, the entire amount of profit for that year. The depreciation portion of the tax code is pretty messed up. And what the IRS gives back in business write offs, local governments take away in business taxes based on how much equipment your business has. For everyone that's against business people and their write offs, try running a business yourself before knocking it next time.