The Franklin News-Post
P. O. Box 250
310 Main Street, SW
Rocky Mount, Virginia 24151
540-483-5113
Fax: 540-483-8013
|
|
 |
|
|
James Ervin |
Friday, December 25, 2009
By JOEL TURNER - Staff Writer
Because of Internal Revenue Service (IRS) regulations, the Town of Rocky Mount will stop issuing cell phones to town employees in January.
Town employees who need to be available via cell phone will be required to provide their own phone and will be given a flat stipend for using the phone for work purposes.
This would have the benefit of making the town no longer liable for excess minutes or text messaging on the part of the staff, Town Manager James Ervin said.
Ervin said the town's policy on cell phones will change because the IRS has rules regarding the taxing and economic benefits of using town equipment, such as cell phones.
The IRS expects local governments to assign a value to each personal call made on a town-issued cell phone, and then tax the employee as if the value of the call were income, he said.
Ervin said the town has issued 31 cell phones to staff that are required to be available if needed.
One locality in Virginia has been audited by the IRS for cell phones issued to employees.
In Rocky Mount, the personal calls made by town employees on town-issued phones don't actually cost the town anything because "we have never exceeded our aggregate plan limits," Ervin said.
Ervin said there are several alternatives for dealing with the IRS regulations, but the simplest way is for the town to stop issuing cell phones to employees.
Ervin estimates that the town can save more than $5,000 a year if it stops issuing cell phones.
Currently, the town pays $19,980 a year for cell phones and spends 240 staff hours managing the programs.
The new policy will cost $14,820 a year with no staff hours for administration (the staff hours have a value of about $6,000).
"I estimate this will save over $5,000 a year, will enable the town to comply with IRS rules and will free up staff time to focus on other issues," Ervin said.
The town will not renew its cell phone contract in January, he said. |
| |
|
|
|
