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OM <br />City of <br />Pequott <br />Lakes— <br />AGENDA ITEM #11.1A. <br />REPORT TO <br />CITY COUNCIL <br />Date: December 6, 2011 <br />Sub. j ect: Cell Phone Policy <br />Report: Due to a recent amendment to the Internal <br />Revenue Code on city- issued cell phones, it will be <br />necessary, once again, to amend the City's cell phone <br />policy. <br />Under Section 2043, the IRS will now treat employer - <br />provided cell phones, if used primarily for non- <br />compensatory business purposes, as a working <br />condition fringe benefit, the value of which is excludable <br />from the employee's income. In addition, any personal <br />use of the employer - provided cell phone, if used <br />primarily for non - compensatory reasons, will also be <br />excludable from the emplo engross income as a de <br />minimis fringe benefit. The IRS will no longer <br />recordkeeping of business use of an employer- provided <br />cell phone in order to receive this tax -free treatment as <br />long . as the phone is issued and used primarily for <br />business reasons. <br />