IRS May Tax Your Work Cell Phone

The government may begin more strict enforcement of an existing rule that classifies employer-provided cellphones as a taxable fringe benefit.

According to a report released Monday by the Internal Revenue Service, the agency is proposing guidelines that would assist employers in calculating what costs are taxable.

Under these guidelines, employees who are able to prove all personal calls made during work hours were done so on a personal phone, can avoid the tax. Employees may be forgiven for "minimal personal use" of employer-provided phones, the report says.

Alternatively, the so-called "Safe Harbor" method would put aside 75 percent of phone charges to "business use." Employees would be taxed on the remaining minutes.

The IRS is requesting public feedback on the plan. Those suggestions may be used to help determine how many minutes of personal calls should be considered "minimal personal use" of employer-provided phones.