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The Los Angeles Times has a lovely example today of the law changing at a slower pace than technology, a phenomenon familiar to readers of Blown to Bits. It turns out (who knew?) that if your business provides you a cell phone, you’re supposed to keep track of personal calls so the tax man can hit you for the value of the personal expense you are avoiding by using the business’s equipment. If you don’t do that, the business is liable. The University of California at Los Angeles had to pay the IRS $239,196 in penalties this year for exactly that reason.

This law was passed in 1989, when cell phones were an expensive rarity and Congress decided they should be treated like company cars. (I became dean of the College in 1995, and even then I was about the only kid on the Harvard block who had one.) The world has changed a bit in the intervening 19 years. The government doesn’t actually make much money this way, but it could if its enforcers got geared up. (And with the declining take on gas taxes as people drive less, who knows what other revenue sources they’ll be looking to?)

Happily, there are bills in Congress to repeal this provision of the tax code. In the meantime, though, what’s an employer supposed to do? Tell all the employees to log cell phone calls to their spouses, or hope the IRS doesn’t come knocking?

The progress of Moore’s law vs. the legislative speed of the U.S. Congress. There’s no match!

This entry was posted on Tuesday, July 29th, 2008 at 9:24 am and is filed under The explosion. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.