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On-premises fringes: Is there such a thing as a free lunch?

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in Compensation and Benefits,Human Resources

by Vicki M. Nielsen, Esq., Ogletree Deakins

The IRS has begun to examine the tax treatment of employer-provided free meals, such as those famously provided by Silicon Valley tech firms like Google. Though the agency has yet to officially comment on its findings, it’s an investigation worth watching.

Depending on the value of the meals, the number provided per day and the number of employees receiving the benefit, employers could find themselves facing significant tax liability. The IRS could determine that the value of employer-provided meals:

  • Should have been included in em­­ployee income, resulting in employer liability for the income and employ­­ment taxes, interest and penalties
  • The value of the meals was not fully deductible.

Guidance coming

The Treasury Department and IRS plan to provide additional guidance on the taxation of employer-provided meals under Internal Revenue Code sections 119 and 132.

In late August, th...(register to read more)

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