House passes bill to eliminate cell phone tracking for tax deductions

A provision to a tax reform bill offered by Rep. Sam Johnson (R - Texas) aims to remove the requirement that employees keep track of their cellular phone usage for tax purposes.

In an earlier day, when cellular phones were lugged in briefcases, their use was recorded by the minute. It was also more expensive, so businesses didn't really use cell phones all that often; and as a result, tracking cell phone usage was considerably easier. Thus the IRS compelled businesses to track usage of these devices in order that they may calculate deductions.

Currently the US tax code asks for minute-by-minute audit logs specifically. Some businesses are apparently forfeiting the deductions simply because the requirement is too difficult to claim.

But Johnson's legislation -- originally introduced as a separate bill, and later incorporated into the larger Taxpayer Assistance and Simplification Act of 2008 -- strikes that language, leaving the deduction open and making it simpler for businesses to claim it.

The TASA bill, which passed the House Thursday 238 - 179, would make the change effective with the current tax year. Johnson himself was among the 93% of Republicans who voted against the bill, saying Democrats added pork-barrel provisions to it; 99% of Democrats voted for it. One of those provisions that attracted Republican opposition requires taxpayers to provide paperwork for documenting deductible amounts withdrawn from health savings accounts to pay for health-related services -- essentially making up for the lost cell phone documentation.

From here, the bill has been referred to the Senate Finance Committee.

Deductions for business expenses can some times require a great deal of paperwork, and that appears to be the Representative's impetus in introducing the legislation. Passage would certainly be a step in the right direction for companies looking to write off their company cell phones as a business expense.