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FastFacts
Feature Presentation
April 16, 2012
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© 2012 The Johns Hopkins University. All rights reserved.
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Today’s Topic
We’ll be taking a look at…
Updated Johns Hopkins University
Cell Phone Policy
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Today’s Presenter
Patricia Morley
Senior Tax Accountant, Johns Hopkins University Tax Office
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Session Segments
Presentation
Patricia will provide a short explanation of the new Johns
Hopkins University policies and procedures that reflect important
changes in IRS requirements for cell phone used for business
purposes.
During Patricia’s presentation, your phone will be muted.
Q&A
After the presentation, we’ll hold a Q&A session.
We’ll open up the phone lines, and you’ll be able to ask
questions.
Patricia will answer as many of your questions as time allows.
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Contact Us
If you would like to submit a question during the presentation or if
you’re having technical difficulties, you can email us at:
fastfacts@jhu.edu
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Survey
Survey
At the end of this FastFacts session, we’ll ask you to complete a
short survey.
Your honest comments will help us to enhance and improve
future FastFacts sessions.
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How To View Full Screen
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Updated Johns Hopkins
University Cell Phone Policy
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Agenda
Today we’ll be covering:
Why policy is changing
Who needs to understand new policy and procedures
University-purchased cell phones
Personal cell phones used for University business
Procedures, forms and approvals needed
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Why policy is changing
Recent changes to IRS rules allow the University to simplify
documentation required to substantiate business use.
Detailed documentation of each business call is eliminated.
Personal use no longer has to be identified and repaid.
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History
For many years, rules governing tax treatment of employerprovided cell phones have been burdensome and outdated.
9/27/2010, cell phones were removed from “listed” property, a
category requiring extensive recordkeeping.
9/14/2011 – IRS Notice issued guidance on treatment of
employer-provided cell phones as a nontaxable fringe benefit.
9/14/2011 – IRS Memorandum for all Field Examination
Operations allows employer reimbursement of expenses for
business use of personal cell phones to be nontaxable.
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Requirements
When provided to a University employee primarily for
noncompensatory business reasons, the business and personal use
of the cell phone is nontaxable.
Noncompensatory means the cell phone is not provided to
increase employee morale, to attract potential employees, or to
provide additional compensation to the employee.
Arrangements for provision of cell phones or reimbursement for cellphone use that is not primarily business related remains taxable.
Such amounts are reported to recipient employee on W-2.
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University-purchased cell phones
Bona fide business purpose must be documented. Examples:
The department needs to be able to speak with faculty or staff
member by phone at all times for work-related emergencies.
The department requires faculty or staff member to be available
by phone when outside the office.
Faculty or staff member needs to be able to speak with vendors,
faculty and/or staff located in other times zones before or after
the normal work day.
The department requires faculty or staff to have access to email
when outside the office.
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University-purchased cell phones
The University purchases corporate cell phones for departments and
individuals when needed to conduct University business.
All equipment and plan purchases must be made through the
Telecommunications Office or other University offices that have an
established vendor relationship.
The University does not reimburse for equipment purchased by an
employee.
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University-purchased cell phones
Department’s Responsibilities
Identify/determine the business need for a faculty or staff
member, including voice and data plans chosen at levels to meet
the University’s needs.
Document and retain written justification of the business
purpose, including features, using Justification Statement form.
The form is PDF fillable
The form has information needed by the employee for the
purchase including the cost center or internal order
Sponsored funds (grants or contracts) cannot be used unless
there is specific authorization in the award
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University-purchased cell phones
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University-purchased cell phones
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University-purchased cell phones
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Implementation
A written justification statement is needed for everyone with a
University-purchased cell phone.
A special implementation format will be available.
To facilitate the implementation, pre-fill forms will be provided to
departments and offices currently billed by Telecommunications.
Written justifications for everyone with a University-purchased cell
phone are to be completed by each department or office by June
30, 2012.
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University-purchased cell phones
Department’s Responsibilities, continued
Telecommunications will charge departments for cell phones.
Responsible for review of monthly statements.
Unusual activity requires additional documentation of business
purpose.
Retain documentation for review by auditors, as requested.
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University-purchased cell phones
International calls
International calling plans must have a business purpose
For occasional international call, calling cards can be used or a
calling plan could be added temporarily
Discuss with your telecommunications office
Upgrades and renewals – a written justification form is required for
each upgrade and renewal
Cancellations – notify your telecommunications office of any
cancellation
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Reimbursement for business use of personal
cell phone
The University can reimburse an employee for expenses for cell
phone services reasonably related to the business needs of the
University. Two scenarios and two forms:
The faculty or staff member is approved to use a personal cell
phone for business
The faculty or staff member is not approved but occasionally
makes business calls.
Reimbursement must be reasonably calculated so as not to exceed
expenses the employee actually incurs.
The University does not reimburse for cell phone equipment
purchased or early termination.
Faculty and staff should consider special rates available for
University employees when purchasing a cell phone.
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Reimbursement for business use of personal
cell phone
The department identifies and approves employee for
reimbursement process using Justification Statement form.
Reimbursement request is submitted on properly completed and
approved TRIP document supported by:
Employee’s cell phone bill identifying cost of plan
Amount to be reimbursed as determined by the department on
the justification form
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Reimbursement for business use of personal
cell phone
Example
Department approves service at 500 minutes. Employee has
personal plan covering 2000 minutes.
Reimbursement will be 25% of the cost of the basic plan for cell
phone service.
Data plan reimbursement calculated the same way.
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Reimbursement for business use of personal
cell phone
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Reimbursement for business use of personal
cell phone
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Reimbursement for business use of personal
cell phone – occasional business use
The employee is not approved to have a cell phone but has made
business calls that can be reimbursed
Reimbursement request is submitted on properly completed and
approved TRIP document supported by:
Employee’s cell phone bill identifying the actual call(s)
Identify who was on the call
State the business purpose
Amount to be reimbursed as determined the worksheet
(provided on the web)
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Conclusion
Departments – University-purchased cell phones
Determine who in your department has a University-purchased
cell phone.
Complete appropriate Justification Statement by June 30, 2012.
Review monthly charges.
Unusual charges require additional documentation.
Retain Justification Statement and additional documentation for
review by auditors, as requested.
Contact the Tax Office if you have any questions.
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Conclusion
University policy, procedures and forms will be available soon.
Departments – Personal cell phones used for University business
Determine who in your department needs a cell phone.
Complete appropriate Justification Statement by May 1, 2012.
Review monthly charges.
Unusual charges require additional documentation.
Retain Justification Statement and additional documentation for
review by auditors, as requested.
Contact the Tax Office if you have any questions.
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Q&A
We’re going to open the phone lines now!
There will be a slight pause, and then a recorded voice will provide
instructions on how to ask questions over this conference call line.
We’ll be answering questions in the order that we receive them.
We’ll also be answering the questions that were emailed to us
during the presentation.
If there’s a question that we can’t answer, we’ll do some research
after this session, and then email the answer to all participants.
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Thank You!
Thank you for participating!
We would love to hear from you.
Are there certain topics that you would like us to cover in future
FastFacts sessions?
Would you like to be a FastFacts presenter?
Please email us at: fastfacts@jhu.edu
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Survey
Before we close, please take the time to complete a short survey.
Your feedback will help us as we plan future FastFacts sessions.
Click this link to access the survey…
http://connect.johnshopkins.edu/fastfactssurvey/
Thanks again!
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