ACCT $2028$ Fall $2023$ Communication Assignment

Badlands Inc.

Prior to $2024,$ Badlands Inc. $($Badlands$)$ provided all employees with a cellular phone for use in carrying out their employment duties. In addition, Badlands paid for the monthly cellular phone plan. There was never any taxable benefit included on the employee T$4.$ The cellular phone was owned by Badlands and remained the property of Badlands. Upon cessation of employment, the cellular phone was returned to Badlands.

Beginning in $2024,$ Badlands has decided to provide employees with a monthly allowance of $$100$ towards a cellular phone plan. Employees will no longer be provided with an employer purchased cellular phone. Employees will be expected to use their existing personal cellular phone for employment purposes.

Required:

$1.$ Prepare the communication which Badlands can provide to employees which explains the personal income tax implications of the change in policy.

$2.$ Provide advice to Badlands on alternative approaches to implementing the policy which may have more favourable personal income tax implications for employees.

Your communications to the employees $($for #$1),$ and the employer $($for #$2)$ should be appropriate for the audience. The grade for the assignment will be weighted $50\%$ for technical accuracy and $50\%$ for audience appropriateness.