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Important Updates From the IRS

Posted September 30, 2011

  • IRS Issues Guidance on Tax Treatment of Cell Phones
  • IRS Offers Filing and Penalty Relief for 2010 Estates

Update: Tax Relief for Victims of Hurricane Irene

IRS Issues Guidance on Tax Treatment of Cell Phones

The IRS issued guidance to clarify the tax treatment of employer-provided cell phones. According to the IRS, when an employer provides an employee with a cell phone primarily for noncompensatory business reasons, the business and personal use of the cell phone is generally nontaxable to the employee. The IRS will not require recordkeeping of business use in order to receive this tax-free treatment.

Further, the IRS announced a similar administrative approach for employers that provide cash allowances and reimbursements for work-related use of employee-owned cell phones. Under this approach, employers that require employees, primarily for noncompensatory business reasons, to use their personal cell phones for business purposes may treat reimbursements of the employees' expenses for reasonable cell phone coverage as nontaxable.

More information about the guidance concerning cell phones and reimbursement for cell-phone use can be found on the IRS website.

 

IRS Offers Filing and Penalty Relief for 2010 Estates

According to the IRS, individuals will have until early next year to file the various required returns and pay taxes on the large estates of people who died in 2010. In addition, the IRS is providing penalty relief to certain beneficiaries of these estates on their 2010 federal income tax returns.

This relief is designed to give large estates, normally those over $5 million, more time to comply with key tax law changes enacted late last year. Visit the IRS website for more information about the types of relief available.

 

Update: Tax Relief for Victims of Hurricane Irene

As announced in previous issues of the NFDA Bulletin, the IRS is providing tax relief to individual and business taxpayers impacted by Hurricane Irene in the states of Connecticut, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania and Vermont and the Territory of Puerto Rico.

The relief postpones certain tax filing and payment deadlines to October 31, 2011. Updated information about the types of relief and the counties and municipalities in which it is available can be found on the Tax Relief in Disaster Situations page of the IRS website.

The tax relief is part of a coordinated federal response to the damage caused by the hurricane and is based on local damage assessments by FEMA. For information on disaster recovery and other forms of assistance, visit www.disasterassistance.gov.

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