An article in the Wall Street Journal on June 12, 2009 discusses the IRS’s plans to enforce a rule that would treat personal calls made on a company funded cell phone as taxable income. Link: http://tinyurl.com/klfral
The irony of this announcement particularly in an world where employees are asked to be available near 24×7 allowing greater coverage for less employees, work from home that saves corporate real estate costs, and other employee concessions is not lost on the public.
It seems like the IRS is reaching deep to capture every possible source of tax revenue in these tight times.
The point is that the technology now exists for them to do exactly that.
The WSJ article points out that the IRS has not actively enforced this tax and other similar taxes given the cost of employees to administer or the IRS to enforce.
Those dynamics are changing as the level of information, integration and automation increase and reduce the barriers involved in reaching into this type of revenue.
I am not debating the merits of the tax either pro or con. In fact when these rules were set up the value of corporate assets – things like WATS lines – were significantly more expensive than today and therefore a more tangible employee benefit.
As the lines between work and personal life continue to blur its time to have a clear set of policies governing what compensation is and the expenses associated with earning that compensation. Do I get to expense my work clothes for example? Do I get to write off overtime and off hours work?
This issue will just get more difficult with the continued consumerization of technologies from smart phones, PC’s, and the like. Should I be able to write off my personal computer for the time I spend checking company email? With monitoring technologies I will be able to know how long that I spent using my resources to do exactly that.
So, how should we treat my current use of the company computer, after hours, to write a blog entry that is part of a voluntary program at my company to increase its visibility?
It all gets a little too complicated for me, but not for the systems that are monitoring our usage constantly – and that is the rub of what becomes possible as information becomes more available, transparent and integrated.
What do you think? How should we treat technologies that enable business productivity as well as personal productivity?
Does access to that personal productivity constitute a form of taxable compensation?
How should we define compensation in a world where there are fewer clear lines between what is business and what is personal?