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 And in fact, the IRS is now recommending that the law be repealed, saying that 'the passage of time, advances in technology, and the nature of communication in the modern workplace have rendered this law obsolete.'"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

Something doesn't smell right...

[Manuka]

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?

Re:Something doesn't smell right...

[Savior_on_a_Stick]

There are many situations where a request for comments is mandatory.

Your right winger knee jerk reaction is utterly without a basis in the facts of this particular situation.

The irs actually does a pretty fair job of making some sort of sense - twisted though it occasionally may be - out of the spaghetti legislation handed to it by congress.

It's hardly surprising that they would ask congress to ditch a law with which maybe a half dozen people on the planet comply.

The cost of maintaining the documentation, training it's agents, publishing forms no one uses - what's the point?

It's typical that even when an agency steps up and says "um...we've looked at what we're doing and there are some practices that don't make sense, and don't serve anyone, and we'd like to change them - anyone else have any input first?" - some troll crawls out of Limbaugh's jock to piss and whine.

Get a life.

Don't worry . . .

[PeeAitchPee]

. . . it is sure to be replaced by a new tax which generates more revenue than the never-used cell phone tax. In fact, that's how they'll justify the new tax ("well, we did get rid of this obsolete tax no one ever paid, so this is more than fair"). At the current rate of spend of this administration, we'll soon be taxed by the breath.

It's time to be patriotic, after all.

Slashdotted! (Here's the article text)

[TrisexualPuppy]

June 16, 2009, 07:47 PM - IDG News Service - The U.S. Internal Revenue Service is now recommending that a complicated law that would tax personal usage of business cell phones be repealed, after the agency caused an uproar last week with attempts to simplify the law.

On Tuesday, IRS Commissioner Doug Shulman asked Congress to make it clear that neither businesses nor employees will need to pay taxes on personal use of cell phones provided by employers.

Just last week the IRS requested public comments on ways to clarify the decades-old law. The request created an uproar because it implied that the largely ignored rule would now be enforced.

While workers are unenthusiastic about any new tax, this one might be particularly burdensome for both employees and employers because of the difficulty of tracking the personal use of company phones.

In its request for comments last week, the IRS suggested three possible ways to simplify enforcement of the law, including requiring people to prove that they have another cell phone that they use during the day for personal use. Alternatively, the IRS suggested that businesses might assume that 75 percent of employee use of the phones is for work and the rest for personal matters. The third method would let employers use an approved statistical sampling method to measure employees' personal use of their business cell phones.

But now the IRS says the law shouldn't be on the books. "The passage of time, advances in technology, and the nature of communication in the modern workplace have rendered this law obsolete," Shulman wrote.

He also said that last week's request for comment wasn't meant to imply that the IRS hoped to revive the law. "Some have incorrectly implied that the IRS is 'cracking down' on employee use of employer-provided cell phones. To the contrary, the IRS is attempting to simplify the rules and eliminate uncertainty for businesses and individuals," he wrote.

The CTIA wireless association applauded the IRS' latest move. "A repeal of the archaic listed property rule is the most sensible and fair action to take on behalf of every American who uses their wireless device for professional and personal purposes," Steve Largent, president and CEO of CTIA, said in a statement.

The IRS knows that it's hated. This is just all a huge PR stunt, and I'm not surprised that people are falling left and right for it.

Re:Hey, ya know: screw the dumb stuff

[140Mandak262Jamuna]

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.

Uh huh, sure you are

[MikeRT]

'To the contrary, the IRS is attempting to simplify the rules and eliminate uncertainty for businesses and individuals.'

If that were the case, then the IRS would be lobbying Congress for a flat corporate tax, and either a flat income tax for individuals that applies to all income or replacing the income tax with excise taxes. The income tax is now useful to the feds mainly as a form of social control. If you become too much of a thorn in the President's side, he can just have the IRS audit you and those associated with you. The IRS doesn't even fully understand the income tax laws because they are so convoluted, which makes them a perfect mechanism for railroading someone.

If you want to lightly tax the working and middle classes, while "soaking the rich," here is how you do it. You establish a 2.5% flat income tax. Everyone pays, even if it's $0.025 on a dollar bill because everyone benefits from the system. Even the poorest Americans should pay at least $1 that they'll never get back to support the military. After that, you impose a luxury tax of some sort. It can be stand alone or a "progressive sales tax" where you would charge 2% on a car that costs $100k or less, but then jump to 10%. The feds could also levy a 20% luxury tax on any house that costs more than $1.5M.

Re:Uh huh, sure you are

[Sapphon]

A 2.5% flat income tax? 2.5%?? My dear friend, I don't even need the back of an envelope to tell you that you'll never take in enough tax with that to cover even the most basic of public services. Making up the shortfall with a tax on luxury goods won't work because, well, they're luxury goods! Per definition people are willing to forgo their purchase. And, even if they weren't, I highly doubt the turnover on luxury goods is high enough that even a 100% tax would fill the Government's coffers much.

Further, your flat income tax suggestion ignores the ability-to-pay-principle: those who can afford to pay more, should (i.e. progressive taxation). Otherwise you are expecting the weak to carry the same burden as the strong, when the weak should be supported by the strong. Because the weak (poor) spend a greater proportion of their income on the necessities of life than their strong (rich), a flat tax hits them proportionally harder – though it seems counter-intuitive, a flat tax discriminates against low-income earners. Also supporting the ability-to-pay-principle is the decreasing marginal utility of income.

A possible ammendment to your suggestion would be to have a tax-free threshold that would allow everyone to purchase the necessities of life, then taxing flatly from then on -- the tax is then weakly progressive, as with each dollar you earn your average tax rate rises, though the marginal rate remains unchanged. This flat tax has been calculated to be (for Australia) around 40% (I'm going from memory here, so +/- 10%). In any case, an order of magnitude higher than your suggestion.

Another possibility, though less accepted in the anglo-saxon world (a little more so in Europe, where socialism isn't a dirty word), is to simply give everyone a basic income (say, US$11000 – the US Poverty Threshold in 2008) and then tax every dollar of income.