IRS has today issued guidance (IRS Notice 2011-72) regarding an employer's provision of a cell phone to an employee. Earlier law changes ended any obligation to provide substantiation for the use of a cell phone for business purposes. But, a question remained whether an employee nonetheless had income from the provision of a cell phone. The guidance states that a cell phone provided for noncompensatory reasons is not taxable to an employee. The IRS gives these examples of noncompensatory reasons: the employee needs a cell phone at all times for work-related emergencies; the employer requires that an employee be available to speak with a client at all times when away from the office; and the employee's need to speak to clients in other time zones from locations out of the office. The IRS points out that the provision of a cell phone to enhance employee morale and goodwill is not a noncompensatory reason. The charges for use of a qualified cell phone, as well as the value for limited personal usage, will be excluded from an employee's income.