Meals & Lodging
a. Code: 107; 119(a), (b), (d)
b. Reg: 1.119-1(a),(b), (c). (f)
2. 119 permits employees to exclude the value of means and lodging furnished by an employer when those benefits satisfy two conditions, they must be provided:
a. for the convenience of the employer, &
b. on the employer’s business premises
3. Reg. 1.119-1(a)(2) states that “meals furnished by an employer w/out charge to the employee will be regarded as furnished for the convenience of the employer if such meals are furnished for a substantial non-compensatory business reason of the employer”
4. Reg. 1.119-1(b): in order to meet this requirement, the taxpayer must “be required to accept the lodging in order to enable him properly to perform the duties of his employment. Also, if the lodging is excludable then the meals not paid by the employee are not includable too.
5. The key is that meals and lodging are not includable in GI when they are provided for the convenience of the employer rather than the benefit of the employee. T/f they are not compensation and then not GI.
6. Commissioner v. Kowalski (1977): Meal money is not governed by 119, b/c meal money is not the same as food, its money. This is not the same as supper money which can be excluded from GI.
7. Adams v. United States (1978):
a. In order to qualify for the exclusion of §119, each of three test must be met:
i. The employee must be required to accept the lodging as a condition of his employment;
ii. The lodging must be furnished for the convenience of the employer; &
iii. The lodging must be on the business premises of the employer.
b. in Adams, this was given the o.k. but is very iffy
c. Ascher says: “business premises” is a vague word
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