The Internal Revenue Service has put off plans to tax employer-provided mobile devices and instead wait for Congress to pass legislation on the issue.

The cellular industry has been pushing for the repeal of a 20-year-old law that requires workers who use company-supplied mobile phones for personal calls to count the value of those calls as income and then pay taxes on that income.

Employers and their employees have long ignored the rule, but the issue came to the forefront in June after the IRS proposed that employers should declare 25 percent of an employee's annual cell phone expenses as a taxable benefit. The IRS subsequently backed away from proposals to more strictly enforce the law after the wireless industry opposed the idea. And now the agency has taken the position that the law should be repealed altogether.

"We're quite hopeful Congress is going to act on this," Shulman said in an interview on C-Span's "Newsmakers" program."In the meantime, we're not doing anything special or moving forward with any initiatives. Our hope is that there will be legislation to clean this up."

The MOBILE Act, which is sponsored by Sens. John Kerry (D-Mass.) and John Ensign (R-Nev.) in the Senate and Reps. Sam Johnson (R-Texas) and Earl Pomeroy (D-N.D.) in the House, would remove mobile devices from the listed property rule to exempt them from the tax.

For more:
- see this Dow Jones article

Related Article:
CTIA: IRS should stop auditing personal use of company-issued cell phones