Good news. The IRS has issued guidance on the tax treatment of cell phones.
You probably recall, CPAs and other tax advisers have been grumping at you to report as a taxable benefit the personal usage of cell phones. Yes, I know it’s ridiculous, but that’s the way the law was written.
Congress removed them from the definition of listed property. The IRS has now explained that personal use of a cell phone provided by the employer for business reasons is nontaxable. If the employer reimburses an employee for a personal cell phone but requires the employee to take business related calls on the cell phone, then the reimbursement is not taxable.
That is good news. In one non-technical sentence, personal use of a ministry provided or reimbursed cell phone is not taxable.
For more details, see a great summary from ECFA: IRS Provides Guidance on Tax Treatment of Employer-Provided Cell Phones.
If you want a technical explanation, ECFA points to a superb explanation from attorney Chip Watkins. Check out his memo.