Business Use of Cell Phone Record-Keeping Required

Cell phones are used all the time in business. What many people don’t know is that tax deductions for business use of cellular phones are not guaranteed. Since cellular telephones are "Listed Property" under Internal Revenue Code Sections 274 and 280F, the IRS can require taxpayers to produce detailed records to justify the business tax deductions. Tax regulations require evidence of the amount, date/time, and the business purpose of each business use of a cellular phone. Most expenses other than the purchase of the phone will be listed on your cellular phone bills, which will provide the dollar amounts and dates/times of usage. However, the law technically requires taxpayers to prove the business purpose of each call. Although this is an unreasonably burdensome record-keeping requirement, it is the letter of the law. Luckily, this may change this year. Commissioner of the IRS Douglas Shulman recently stated that he is optimistic that Congress will pass a law this year so that personal use of employer-provided cell phones is not taxable.