Help for a thorny employee payment/reimbursement issue regarding cell phones may be closer than you thought.

Under current IRS regs, if you pay for any employees’ cell phones, your company should require the workers to document whether each phone call was for business or personal use. If you don’t have that documentation, the value of the use of the phone is technically income to the employee, and should be taxed accordingly.

A “business use only” policy isn’t enough — IRS knows it’s far too easy for employees to get around it.

But substantiating business use of a cell phone is a huge burden for companies and their workers — which is why many don’t do it (and also don’t bother to include the value as income.)

Fortunately, IRS has gotten the message that the rules haven’t kept up with the importance of cell phones to day-to-day business.

Right now, a bill is in progress through the Senate that would remove the requirement that you substantiate cell phone use. (The bill has already passed the House.) Several key senators support the bill, and they’re getting support from a variety of companies and business associations. A recent letter, signed by organizations ranging from the American Institute of Certified Public Accountants to the United States Chamber of Commerce, pointed out that the law was first put in place when cell phones were a near-luxury.

These days, they’re ubiquitous. And the cost of complying with the law is far greater than the fringe benefit to employees.

With any luck, the bill will pass the Senate soon — especially in an election year when politicians are looking for ways to benefit the voters.

We’ll keep you posted on the bill’s progress. But in the meantime, let us know how you handle cell phone reimbursements by leaving a comment.