Churches that provide cell phones to pastors and staff members may find the perk an easier one to offer, thanks to a new federal law.
For years, employees who received cell phones as part of their work faced the tedious task of tracking each individual call in order to substantiate the business purpose of the calls and avoid taxes. Because such an effort proved challenging and time-consuming, many employers instead chose to offer cell phone allowances. The allowances removed the record-keeping burden, but they also resulted in taxable benefits for the employees who received them. That irked employees and irritated employers, since other office-related equipment—such as desktop phones or photocopiers—didn’t require the same degree of documentation.
The new small-business tax relief likely will take many of these frustrations away. Beginning with the 2010 tax year, cell phones are no longer considered “listed property,” meaning little documentation will be needed to prove their business uses.
“The impact on nonprofit organizations is especially important because violations of the record-keeping requirements for ‘listed property’ by nonprofits can result in ‘automatic excess benefit transaction’ penalties on the individuals involved,” said Michael Batts of the accounting firm Batts Morrison Wales & Lee, and an editorial advisor for Church Law & Tax Report.
However, Batts cautions church leaders to wait until the Internal Revenue Service provides guidance on how employers should treat cell phones in light of the new law. In the meantime, “churches may want to use the time to begin shopping carriers and comparing prices for group plans,” he said.
Copyright Caution
“Copyright laws affect much more than printed materials. Reproduction of intellectual material in any form without permission is a violation. These violations include displaying song lyrics visually, replaying TV clips and movies publicly, and copying software to other computers.”
—From “Copyright Law: What Every Church Should Know,” on ChurchSafety.com. More in-depth help is in Richard Hammar’s updated Essential Guide to Copyright Law for Churches at http://bit.ly/9Vi85P.
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