TERRE HAUTE — In an effort to comply with federal tax law, Vigo County commissioners are preparing a written policy to pay a stipend to county employees who use cellular telephones on the job. That stipend would then become part of an employee’s taxable income.
Currently, the county pays for a phone and phone service. However, the employee may also make and receive personal calls. That use is considered a taxable fringe benefit by the Internal Revenue Service, said Vigo County Auditor Tim Seprodi.
“It is similar to receiving an automobile that is provided by an employer,” Seprodi said. “Any personal use, if paid for by the employer and used for personal use, that is income to you.”
Employers are required to account and document business and personal use on cell phones and the IRS can declare that all undocumented use is personal and be taxed as wages. However, if the county pays a taxable allowance for an individually owned cell phone, it removes the requirement of detailed documentation, the auditor said.
That is what the City of Terre Haute did when it adopted a written cell phone policy last year.
City Attorney Chou-Il Lee said an IRS audit of the city prior to Mayor Duke Bennett assuming office in January 2008 indicated the city needed better records on cellular phones.
Lee said the city also saw large IRS judgments coming against cities and universities. In 2007, the University of California at Los Angeles was hit with a back tax bill of $240,000 because it could not provide documentation on cell phone use.
“It is now on [employees’] W2 form. We do not provide a phone. Now they use their own personal phones and receive a stipend,” Lee said.
The city policy, Lee said, also requires a city employee, while driving on city business, to pull over to use a cell phone for city business.
Seprodi said the IRS can issue a back tax bill for up to three years. The auditor said he is gathering information on the number of cellular phones in all county departments. Those departments are serviced by at least three different cellular telephone providers. The auditor said the county is not required to switch those providers, but a consolidation could result in cost savings, depending on services needed.
The City of Terre Haute pays a stipend on 165 cell phones, Mayor Bennett said.
“We chose to do it for a couple of reasons. One is we wanted to cap the costs to the city,” Bennett said. “We had certain employees who were going over their [monthly cell phone usage] plan and their costs were changing from month to month.
“Now those costs are capped, so if they excessively use that phone, that cost is on them,” Bennett said.
“Second, by doing it this way, we don’t have to separate business calls from personal calls. We would have had to [document] that on all cell phones and that would have been a nightmare. It would have been nearly impossible,” the mayor said.
“We would have to sit down with an employee every month to sift though itemized call lists and that would have been a joke,” he said.
The city has three stipend levels. The first is $25 per month for basic service; $50 per month for higher users; and $100 for phones that have Internet data access, such as a Blackberry.
“We make the determination based on a business case. They have to tell us what kind of service is needed for the phone,” the mayor said. “We are not just giving Internet access or texting just because they want it, they get it because they can show they need it for their job.”
“It seems to be working very well,” Bennett said.
Bennett said the city will see a cost savings, but that it is too early to determine what that savings will be. The mayor said that by the middle of this year, those savings could be calculated.
Howard Greninger can be reached at (812) 231-4204 or howard.greninger@tribstar.com
Local & Bistate
Vigo commissioners trying to comply with federal tax law
Policy for cell phone stipend in the works
- Local & Bistate
-
-
Montford Point Marine
In 1943, 19-year-old Ezell Odom was on the sandy beach of a tiny South Pacific island about 7,000 miles from his parent’s home in Terre Haute.
-
K-9 officer Shadow honored as a hero
A Terre Haute K-9 officer injured in the line of duty has been honored as a hero by the Indiana Veterinary Medical Association.
-
Freezin’ for a Reason
Hundreds lined up outside Hulman Center amid frigid air to participate in a warm-hearted cause.
-
Even as law, right-to-work dominates crackerbarrel
The flames of the right-to-work debate were gone, but the coals still seemed to smolder.
-
Vigo School Board to give OK on bonds for DeVaney project
The Vigo County School Board will meet at 6 p.m. Monday in the administration building, 686 Wabash Ave.
-
Bridging the gap to ‘forever’
They can be taken from their homes by strangers for reasons they may not understand, with no possessions other than the clothes they are wearing.
-
Students showcase keen problem-solving skills at Rose-Hulman
For the 16th straight year, Honey Creek Middle School students came out on top in the Wabash Valley MATHCOUNTS competition at Rose-Hulman Institute of Technology.
-
Ivy Tech to celebrate Black History Month
Ivy Tech Community College will celebrate Black History Month with a series of events at its campuses statewide.
-
Whitney Houston, superstar of records, films, dies
Whitney Houston, who ruled as pop music's queen until her majestic voice and regal image were ravaged by drug use, erratic behavior and a tumultuous marriage to singer Bobby Brown, has died. She was 48.
-
Giant welcome home for Steve
Terre Haute was suddenly home to thousands of cheering New York Giants fans Friday as residents welcomed Super Bowl champion Steve Weatherford back home for a parade.
-
‘One for Terre Haute,’ Steve tells crowd at North
“This one was for Terre Haute,” native son Steve Weatherford proclaimed Friday as he shared his Super Bowl victory with the community that helped send him on the path to a world championship.
-
Hometown support vital to success, Weatherford says
Steve Weatherford said Friday he wouldn’t be celebrating a Giants’ Super Bowl victory if not for the support he’s received from his hometown, his parents and mentors in his life.
-
Craning for a rare glimpse
A visitor from the Far East has naturalists flying to Linton, hoping some good comes from one bird’s bad directions.
-
Vigo’s primary election filings complete
The slate is set for the May 8 primary election, with the race for three at-large seats on the Vigo County Council drawing the largest pool of candidates at the county level.
-
Documentary on electric vehicles plays Sunday at Rose
The rising popularity of electric vehicles and their impact on the world eco-system is the focus of a documentary, “Revenge of the Electric Car,” being presented at 3 p.m. Sunday in Rose-Hulman Institute of Technology’s Hatfield Hall Theater.
-
Man gets 10-year sentence in battery case
A West Terre Haute man received a 10-year prison sentence Friday after pleading guilty to aggravated battery for beating a friend caught in bed with the man’s wife.
-
Asian hooded crane lands in Greene County wildlife area
Bird watchers are flocking to a southwestern Indiana wildlife area to try to catch a glimpse of a crane usually spotted only in Asia.
-
Slow drips: It’s maple syrup season in Indiana
More seasonal, colder temperatures will hit the Wabash Valley this weekend, which is ideal weather for maple syrup production, said Keith Ruble, superintendent of the Vigo County Parks and Recreation Department.
However, Ruble voices concern that this year’s maple syrup season may be short.
-
Downtown restaurant celebrates expansion
The streets of Terre Haute were chilly Thursday night, but for the glow of hot pasta inside Louise’s Pizzeria and Cafe.
-
Contract signed for new Y
Papers are signed and the ink is in place for a new YMCA to operate in Terre Haute.
-
City to impose $30 release fee on towed vehicles
The Terre Haute City Council voted without opposition Thursday to impose a new $30 release fee on vehicles towed and impounded by the police as part of a criminal investigation.
-
Valley educators cautious on Indiana’s ‘No Child’ waiver
Indiana is one of 10 states to receive a waiver from federal No Child Left Behind requirements.
-
Driver dies after Illinois school bus crash
“Brace yourself. Brace yourself,” Fay Pickering shouted to her students just before the school bus she was driving crossed U.S. 40 and landed in a ditch Thursday morning.
-
Trial date set for former WTH police chief
A July 23 trial date has been set for a former police chief of West Terre Haute accused of theft.
-
Motorcycle gang member pleads guilty in federal court
A member of an Indianapolis motorcycle gang who delivered methamphetamine to a Terre Haute dealer has pleaded guilty to drug charges in federal court.
-
July trial date set for mother charged with child neglect
A July 30 trial date has been set for a Terre Haute mother charged with neglecting and battering her toddler.
-
Business hosting SPPRAK fundraiser
Java Haute is hosting the latest fundraiser sponsored by SPPRAK — Special People Performing Random Acts of Kindness.
-
Valley high school cooking competition under way today
Clabber Girl Corp. and Gordon Food Services will host the fourth-annual High School Chef Competition, beginning today through Saturday, and again Feb. 18, in the Culinary Classroom at Clabber Girl.
- UPDATE: Marshall, Ill., school bus driver involved in accident dies; cause appears to be cardiac-related
-
Terre Haute road name game
What used to be called U.S. 40 from the Wabash River west through West Terre Haute to Interstate 70 needs to be renamed and, probably, get new street addresses, a Vigo County planner recommends.
- More Local & Bistate Headlines
-
Recording Superstar Whitney Houston Dead at 48
Police: Houston Found Dead in Her Hotel Room
Palin Brings Anti-Washington Message to CPAC
Maine GOP Chairman Says Romney Wins Caucuses
Obama Scraps Birth Control Mandate
Fans 'Speechless' Over Houston's Death
Raw Video: Deadly Blasts in Syria
Androgynous Model Walks Runway As Man and Woman
US Airmen's Killer Sentenced to Life in Germany
Snow Strands Italian Towns
Latest Jason Wu Collection Shows Chinese Roots
ShowBiz Minute: Madonna, Beresford-Redman, Pawsc
Navy Names Ship for Gabrielle Giffords
Raw Video: Rough Seas Stop Oil Removal
5 Killed in Wrong-way Crash on I-10 in La.
Uzbek Man Pleads Guilty in Plot to Kill Obama
Stars Show Support at AMFAR Charity Gala
The Pits: Israelis Spit Olives for Glory
Winter Slamming North Asia, Parts of Europe
Raw Video: Italy's Mount Etna Bursts Into Life
Romney Tops Santorum in CPAC Straw Poll
First glimpse of Blue Ivy Carter
Absolute Lin-sanity
Hate to be Rude: Bubba Watson
Peek inside Barbie's closet
Test on Comforter in Powell Unit Shows Blood
Angry Dad Shoots Teens Laptop
Hero Driver Saves Kids From Burning Bus
Funeral to be held for Powell boys
Sandusky on having to stay inside and people turning on him
Woolly Mammoth Caught on Camera?
Did JLo 'Assault' Marc Anthony on Camera?
Christie Brinkley's Runway Slip
Toddler forced to run half-naked in snow
Halle Wants to Leave the Country
Northern Lights shine above earth
Plane makes perfect belly landing
