Tag Archive for IRS Rules

IRS: Employers Must Exercise Caution In Providing “Free Lunch” For Employees

William Byrnes 1

The IRS has released a technical advice memorandum (TAM) that sheds light on the potential tax implications when employers provide employees with free meals in the office. Post-tax reform, meals provided “for the convenience of the employer” may receive favorable tax treatment. In the TAM, the IRS denied exclusion of the meals’ value from employee compensation. Here, the employer provided free meals to all employees in snack areas, at their desks and in the cafeteria, justifying provision of these meals by citing need for a secure business environment for confidential discussions, employee protection, improvement of employee health and a shortened meal period policy.

The IRS rejected these rationales, stating that the employer was required to show that the policies existed in practice, not just in form, and that they were enforced upon specific employees. In this case, the employer had no policies relating to employee discussion of confidential information and provided no factual support for its other claims. General goals of improving employee health were found to be insufficient. The IRS also considered the availability of meal delivery services a factor in denying the exclusion, but indicated that if the employees were provided meals because they had to remain on the premises to respond to emergencies, that would be a factor indicating that the exclusion should be granted. For more information on “de minimis” type fringe benefits, visit Tax Facts Online.

Written By William Byrnes



IRS Guidance On Tax Cuts And Jobs Act Changes On Business Expense Deductions For Meals And Entertainment

IRS- Business Meals And Entertainment

The Internal Revenue Service issued guidance on the business expense deduction for meals and entertainment following law changes in the Tax Cuts and Jobs Act (TCJA).

The 2017 TCJA eliminated the deduction for any expenses related to activities generally considered entertainment, amusement or recreation.

Taxpayers may continue to deduct 50 percent of the cost of business meals if the taxpayer (or an employee of the taxpayer) is present and the food or beverages are not considered lavish or extravagant. The meals may be provided to a current or potential business customer, client, consultant or similar business contact.

Food and beverages that are provided during entertainment events will not be considered entertainment if purchased separately from the event.

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Tax Professionals – Tax Question Of The Week

Tax Question, Clergy Taxes, TaxConnections

Every Friday we post one question from our Ask Tax Question feature and invite our tax professional audience to help our visitor. The Tax Question this week is as follows:

Thank you for the article about who is considered a minister for tax purposes. I am a female whose current church does not ordain women as ministers or deacons. I am a missionary to Jamaica and just created my own ministry after serving almost a year with another ministry. My ministry’s focus is street evangelism and church planting.

If a church in Jamaica ordains me, would that count for IRS purposes or would I have to be ordained by an organization in the U.S.? I realize that we are talking case-by-case. Is there a group within the IRS that would receive a submission of review regarding ordination or status? Thank you so much for your help with this!!!

I appreciate it greatly!!