[Congressional Record Volume 155, Number 1 (Tuesday, January 6, 2009)]
[Senate]
[Page S129]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. KERRY (for himself and Mr. Ensign):
  S. 144. A bill to amend the Internal Revenue Code of 1986 to remove 
cell phones from listed property under section 280F; to the Committee 
on Finance.
  Mr. KERRY. Mr. President, today Senator Ensign and I are 
reintroducing the MOBILE Cell Phone Act of 2009, Modernize Our 
Bookkeeping in the Law for Employee's Cell Phone Act of 2009. Last 
Congress, 60 Senators cosponsored this legislation which would update 
the tax treatment of cell phones and mobile communication devices.
  During the past 20 years, the use of cell phone and mobile 
communication devices has skyrocketed. Cell phones are no longer viewed 
as an executive perk or a luxury item. They no longer resemble 
suitcases or are hardwired to the floor of an automobile. Cell phone 
and mobile communication devices are now part of daily business 
practices at all levels.
  In 1989, Congress passed a law which added cell phones to the 
definition of listed property under section 280F(d)(4) of the Internal 
Revenue Code of 1986. Treating cell phones as listed property requires 
substantial documentation in order for cell phones to benefit from 
accelerated depreciation and not be treated as taxable income to the 
employee. This documentation is required to substantiate that the cell 
phone is used for business purposes more than 50 percent of the time. 
Generally, listed property is property that inherently lends itself to 
personal use, such as automobiles.
  Back in 1989, cell phone technology was an expensive technology 
worthy of detailed log sheets. At that time, it was difficult to 
envision cell phones that could be placed in a pocket or handbag. 
Congress was skeptical about the daily business use of cell phones.
  Technological advances have revolutionized the cell phone and mobile 
communication device industries. Twenty years ago, no one could have 
imagined the role BlackBerries play in our day-to-day communications. 
Cell phones and mobile communication devices are now widespread 
throughout all types of businesses. Employers provide their employees 
with these devices to enable them to remain connected 24 hours a day, 7 
days a week. The cost of the devices has been reduced and most 
providers offer unlimited airtime for one monthly rate.
  Recently, the Internal Revenue Service reminded field examiners of 
the substantiation rules for cell phones as listed property. The 
current rule requires employers to maintain expensive and detailed 
logs, and employers caught without cell phone logs could face tax 
penalties.
  The MOBILE Cell Phone Act of 2009 updates the tax treatment of cell 
phones and mobile communication devices by repealing the requirement 
that employers maintain detailed logs. 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. Last, Congress 60 Senators cosponsored 
this legislation. I urge my colleagues to support this commonsense 
change.
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