No, as long as the substantiation requirements of Code Sec. 274(d) are met. If records are not kept of business and personal use, the value of all use would have to be included in the wages of employees.

Listed property. Cell phones and telecommunications equipment (including PDAs and BlackBerry devices) are included in the definition of “listed property” under Code Sec. 280F. Expenses relating to listed property must be substantiated by providing an adequate record of the following elements of the expenses:

• the amount of the expenses;
• the time and place of the use of the listed property (i.e., cell phone); and
• the business purpose of the expense.

Related expenses. Cell phone expenses include the purchase price of the equipment (or an annualized “lease value” approximation of that price), monthly service fees, and any additional per-minute, roaming, long-distance or other operating charges.

Working condition fringe benefit exclusion. If an employer provides a cell phone to an employee (by either paying for the benefits directly or reimbursing the employee), the exclusions set forth in Code Sec. 132(d) for working condition fringe benefits and in Code Sec. 62(c) for tax-free expense reimbursements under the accountable plan rules apply only to the extent that records (including records of both incoming and outgoing calls) are kept to substantiate the business use each calendar year.