I. OBJECTIVE & PURPOSE
To establish a University policy concerning employee cell phone and the associated services used in conjunction with the cell phone, such as data service, for official University business. Vice-Presidents or their designee will be responsible for determining employees whose job duties include the frequent need for a cell phone thus qualifying for a cell phone and associated services allowance.
A new policy approved by the President, John A. Delaney
III. STATEMENT OF POLICY
This policy is being established in accordance with IRS cell phone guidelines.
The undocumented business and personal use of an employee-owned cell phone to which an allowance is paid is deemed by the IRS as a nonaccountable plan and the allowance is wages subject to Federal Income, Social Security, and Medicare taxes, even if the cell phone use were primarily for business purposes. Receiving the taxable cell phone allowance for an individually owned cell phone eliminates the detailed documentation requirement.
As a result of this IRS guideline, upon the effective date of this policy all existing and new cell phone associated data services will no longer be treated as a business expense but will be replaced with an employee allowance.