Tuesday, April 9, 2013

No Such Thing as a Tax-Free Lunch?

According to The Wall Street Journal, the U.S. Internal Revenue Service (IRS) is examining whether free employee meals like the ones technology companies made famous constitute a taxable fringe benefit.

This paragraph in particular seems to get to the nut of the issue:
Other lawyers point to an exception that allows meals to remain untaxed if they are served for a "noncompensatory" reason for the "convenience of the employer." The exception generally has been applied to workers in remote locations or in professions where reasonable lunch breaks aren't feasible. But these lawyers argue that some technology firms could qualify, in part because free food encourages longer work hours and is a crucial part of Silicon Valley's collaborative culture.
Google and Facebook are the companies mentioned in the article. Google declined comment (as did the IRS), while Facebook indicated it believes it's in compliance with the law.

What do you think? Should free employee meals be taxed?

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