The IRS taxes compensation.
It's hard to believe it has taken them this long to realize that hundreds (or thousands) of dollars in free food and perks a month is compensation.
It's hard to believe it has taken them this long to realize that hundreds (or thousands) of dollars in free food and perks a month is compensation.
Benefit in Kind
And is taxed in some countries (to some extent) like Ireland and Germany
If your team decides to have an "offsite" at a restaurant/event, should that be taxed as well?
It just goes through a slippery slope that you view anything that a company provides as taxable. I think it would be a very short sighted decission to squeeze few dollars on the short term, for long term loss on overall productivity.
source? genuinely curious if those words are written somewhere.
It would seem to me that the IRS should tax income, specifically income that I can use to pay taxes (or which can reasonably and reliably be converted into something that I can use to pay taxes).
I'd love to send 40% of last week's corporate-paid lunch to the IRS but my guess is they wouldn't accept it.
IRS Publication 525 -- "In most cases, you must include in gross income everything you receive in payment for personal services. In addition to wages, salaries, commissions, fees, and tips, this includes other forms of compensation such as fringe benefits and stock options."
It would seem to me that the IRS should tax income, specifically income that I can use to pay taxes (or which can reasonably and reliably be converted into something that I can use to pay taxes).
I'd love to send 40% of last week's corporate-paid lunch to the IRS but my guess is they wouldn't accept it.
You can't send the IRS 40% of a fully paid vacation to Hawaii, including use of the corporate jet either. Should companies be able to give their employees such vacations without out the employee being required to pay taxes on the value?
Think about what incentives that would create -- individuals could evade taxes altogether by simply negotiating with their employer to provide whatever goods and services they wished to consume rather than money. And because such benefits wouldn't make up part of the AGI the individual would also be eligible for government social programs.
I'm not sure how the IRS could possibly assign a compensation value to individuals. One method might be to make the costs of these perks non-deductible from a company tax perspective.