The frequently asked questions below are based on the Cell Phone policy, which is being developed to go into effect January 1, 2008. This policy will state that an employee may receive an allowance from the University to obtain wireless telephone service and equipment, as deemed necessary by the employee’s job responsibilities, and approved by the employee’s immediate supervisor.

The new cell phone policy is effective January 1, 2008. Employees may change to an allowance method at that point or wait until their current contract has expired prior to conversion. All conversions must be completed no later than June 30, 2008.

There may be. The University has worked with the primary cell phone companies to determine their policy should early termination occur. You may view this at Attachment B.

You may choose the phone and plan that best suits your needs in consultation with your department chair/head. Allowance rates may be viewed at Attachment A.

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 Why does the University want me to own my cellular telephone?

The IRS requires that the business and personal use of University owned cell phones must be documented in a very detailed manner.  While most departments require employees to account for and reimburse personal calls made on University cell phones, no departments are documenting and substantiating the calls to the detail required by IRS rules.  The IRS can declare that all undocumented use is personal and should be taxed as wages, even if the calls were mostly business related.  Receiving a taxable allowance for an individually owned cell phone removes this detailed documentation requirement.
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Yes.  Because you own the phone, you do not have to document personal calls.  You will no longer be required to carry two phones, one for business and the other for personal use.
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Is the allowance that I receive for my own cellular phone taxable?

Yes.  The allowance amount is taxable income.  Otherwise you would still be required to provide detailed documentation of your business and personal calls. Taxes and fees have been considered in determination of the allowance amount.
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With department approval, you will work with your supervisor to determine the amount of your allowance. You will receive an allowance necessary to pay for required business use.
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The allowance amount will be reviewed annually and adjustments to the allowance will be made on an annual basis, as deemed necessary by average business use.

No.  You should only receive an allowance if your job requires that you carry a cell phone, where other less expensive means of communication are not adequate, and then only an amount necessary to cover business calls.

No.  The allowance is not part of your salary – it is a taxable reimbursement not included when determining benefits.
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The device and plan you select will be based on several factors.  While the University allowance will be based on business use only, you should consider both business and personal usage when determining a service provider and rate plan.  Your job may not require a camera phone, but you may find a camera phone to be a good option for you personally.  You should consider your calling patterns.  Is unlimited long distance necessary?  Would free mobile to mobile minutes be a plus?  What are the chances that you may exceed your base plan minutes and be required to pay expensive overage minutes?

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What should I do with my existing university purchased phone?

You may keep your current phone and just have the account switched to a personal account. No reimbursement will be due the University.

You should take full advantage of any trial periods offered by the service provider.  Pay strict attention to your level of service during the trial period. Return the phone and cancel the plan if you are not receiving the level of service you need.
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If your job requires that you have access to email, calendaring or other PDA functions while away from your computer, your supervisor may approve the purchase of a smartphone to perform your job responsibilities.  If you want a smartphone, but your job doesn’t require it, you will pay the difference in the allowance amount and the actual cost of a smartphone or other more expensive device. For detailed information on PDA/smartphone compatibility with ETSU systems, including email and calendaring services, please contact the OIT Help Desk at 94648 or oithelp@etsu.edu.
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The University will only provide support for the smartphone devices that are on the approved list for support. For detailed information on PDA/smartphone compatibility with ETSU systems, including email and calendaring services, please contact the OIT Help Desk at 94648 or oithelp@etsu.edu.

You will see your allowance on your monthly paycheck.
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You will need to discuss it with your supervisor.

Yes! If you are a current University faculty or staff member you are invited to take advantage of any of the discounts offered by the cellular vendors.

Internal Revenue Service authority considers cell phone use a taxable fringe benefit if the business and personal use cannot be substantiated.  Only recently has this emerged as a problem in IRS and other audits.
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The IRS takes this very seriously. The IRS has already made cellular telephone use an audit issue for businesses and government institutions, including higher education.
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No. IRS authority says that personal calls that are included in the base plan must be documented and reimbursed, or reported as wages.
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No.  You actually pay for "free" calls as a part of the base cellular service plan.  So, personal calls made during "free" calling times should be documented and reimbursed.
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You are if you have provided detailed documentation of all calls, both personal use and business use, and have paid a pro-rata share of your total cell phone bill.
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You would think so.  But, under IRS authority it is not enough to mark personal calls and say that all the rest are business calls.  IRS substantiation requirements include the "amount of each separate expenditure, the amount of business/investment use, the date of the expenditure or use, and the business or investment purpose."

And . . . the IRS definition of adequate record keeping is that the cell phone user "shall maintain an account book, diary, statement of expense or similar record and documentary evidence which, in combination, are sufficient to establish each element of an expenditure."

                IRS Regulation 1-274-57
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Example 1

You have a 600 minute plan that costs $40.00 (plus fees and surcharges).  You only used 300 minutes, but 100 of those were personal.  Your total bill is $40.00.  You should pay one third of the total bill.  Use this formula:  100/300 x $40.00.  This equals $13.33 plus the same prorated share of the fees and surcharges, plus sales tax.

Example 2

You have a 600 minute plan that costs $40.00 (plus fees and surcharges).  This month you made calls totaling 650 minutes.  Your total bill is $57.50 ($40 plus $.35 per minute over 600 minutes).  Of those minutes, 100 were for personal calls.  You should pay 100/650 x $57.50.  This equals $8.47 for personal calls.  The prorated share of fees and surcharges should also be paid in addition to sales tax.
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We agree that for most of our users this would be the case. As a result, we will no longer be providing University-owned phones and will be going to an allowance program.

The allowance amount must be based on the business requirements of the employee’s position.  Based on expected business use, the allowance amount will be selected from the University’s approved allowance pricing structure for services and equipment.

Departments are encouraged to determine an amount based on job function that is fair to the employee and the department. This should consider business usage only and not added personal usage.

As long as the Payroll Department receives the allowance form by the 15th of the month, employees can expect to receive their allowance in that month’s paycheck.

Yes. The IRS has published an article on their website at the following url:  http://www.irs.gov/govt/fslg/article/0,,id=167154,00.html