Beginning in 1989 Congress decided to add cellular phones to the list of "listed property". As you may or may not know, "Listed Property" are items obtained in business but which the IRS have sanctioned as having the possibility to lend themselves to personal use. With that being said, the IRS has laid out rules as well as what steps are required in order to provide the adequate information needed to comply. This has created a great deal of challenge for employers who must now require the employee to keep records that distinguish business from personal phone charges.

Recently the IRS has begun to audit government agencies and businesses on their "Listed Property". As stated before, cellular phones fall into this category. This is now creating a great deal of challenge for companies who often keep no information breaking down employee cell phone usage. In the case that a company is absent of documentation, it can be expected that the IRS could require 100% of each phone, along with usage to be included in the employee's W2.

The steps asked of employees in order for compliance are as follows: The employee should keep a record of calls on a monthly basis and the purpose of each call; which calls are personal or business related. If these employees receive monthly statements with their calls itemized, then they should decipher which are personal and which are business related. This information is expected to be submitted to the employer and kept for records in the case of auditing.

The other solution to avoid this situation is that companies can no longer provide their employees with cellular phones but instead provide an allowance. The problems that arise from this are that the company will end up spending much more money on cellular, as well as losing the phone numbers currently associated with their business. Another major issue that arises is that many employees do not have good enough credit for their own cellular phones, thus making it difficult to provide an allowance.

As we know, when it comes to the IRS there is no messing around. It is integral to keep correct and up to date information on cellular bills in an organized manner in the case of an audit. Wireless Watchdogs has recently developed new software that handles this exact situation. Our software is simple, all that is required is a simple log in of each employee once a month to select which calls are personal and business related. The software also downloads your businesses address book and stores the numbers, thus any number not on the address book will require an explanation of who the call was and what the purpose is. At the end of each month, Account Payable will have the information needed to inform employees on what they owe for the personal calls they have made on their business phone. Not only will this allow your company to have the correct information to hand over in the case of an audit, but personal calls will drop on average 20% simply because employee wireless devices will be under surveillance once a month. With our software, your company will be safe and prepared in the case of an audit.