Posted on 09/06/2014 4:22:15 PM PDT by SeekAndFind
Silicon Valley companies are known to cater to their hard working employees. Free yoga classes, nap rooms and meals are among the perks their workers enjoy.
A recent Wall Street Journal report reveals that the Internal Revenue Service could be targeting these fringe benefits, more specifically "employer-provided meals" in the next fiscal year. In the agency’s recently released Priority Guidance Plan for 2014 to 2015, the IRS states that the free meals will now be considered a taxable fringe benefit, the same way a company car or phone is.
Rather than taxing employees themselves -- an arduous if not impossible task to monitor -- the IRS said it would collect taxes from employers providing the free meals. According to the Wall Street Journal, if the measure is put into effect, a free meal at Google estimated at $8 to $10 for an employee that eats two meals a day at the office could cost the company an extra $4,000 to $5,000 a year in taxes. Software engineers at Silicon Valley companies like Google typically make a base salary of at least $128,000.
These perks on top of the generous salaries are now a fundamental part of Silicon Valley company culture, and expected by incoming employees. But they are not exclusively in the service of employee luxury: They encourage shorter breaks, longer hours spent at the office -- which may mean less opportunity for employees to spill company secrets off campus as well.
At the moment, the tax code views free meals provided by employers in two ways: If meals are treated as a regular payment for labor, they are taxable. If they are a necessary expense for an employee to do their job (like meals given to oil rig workers in the Gulf of Mexico) they are not taxable.
(Excerpt) Read more at ibtimes.com ...
IRS needs to tax rat employees at 200%.
That is fine with me. Amnesty loving left wing bustards want to spend so much money they should pay more taxes.
Although I think we are way overtaxed, I am in favor of every company that supports the Democrats having to pay as much tax as possible. Free food that is provided regularly at work is a form of compensation, and if they're going to nail the rest of us for everything, then they should nail them too. It would not surprise me if it comes out that Google deducts the cost of these meals as an operating expense,
Silicon Valley’s iconic beer bash will never be the same.
This probably means that the free meals are going the way of the two martini lunch.
$5K per year per employee is a big price to pay for fringe benefit.
It may not go away immediately but a couple bad quarters for Google and it will.
Pretty soon, working from home will be taxed as a benefit ( gas or transportation not spent ). You read it here first.
Here in the Silicon Valley of the South East . . . they provide lunch for employees and who knows what else . . . but a smaller company and I think he’ll keep on doing it regardless until some fired employee down the road tries to get him in trouble.
This is just a prelude to taxing health care benefits.
I wonder if those double-decker luxury bus rides back and forth are next on the list. You hardly need a car any more if you don’t have to drive to work and you make enough money that you can buy your bottled water from the internet (not a hypothetical conjecture).
And if they can track and tax all those free meal, it must be a piece of cake to find all those “lost” emails of their own. :)
What does the IRS pay to eat your lunch?
Zippo.
I wonder if Canada could do this to Burger King..?
I wonder if Switzerland would do this to Walgreens..?
I wonder if Singapore would do this to that Facebook guy..?
I don’t like liberal sympathizers, crony capitalists, and all that, but principle is principle. A lunch at work is not part of pay, unless the lunch received by a client taken out for lunch is also income for that client. It isn’t. It’s a business expense. Nor is your food at your house. It is a living expense. It isn’t taxed.
So, if I were these companies, I’d just put out a buffet in the lobby for guests and anybody else who fills a plate. No sign-in required.
The IRS abuses its power, it has too much power, and this is nothing more than the IRS flexing its muscles.
But your food at home is hit with income tax.
You just made the argument for the IRS.
The IRS and the socialist liberals embedded in its bureaucracy are bent on destroying private business in our USA through rulings & regulations.
If a business provides morning coffee, a free or much reduced lunch, it is not wages. Companies do this for competitive business reasons—for the convenience of the employer. Coffee wakes up an employee & that employee does more work for the employer. The cheap lunch is because the employer can post a shorter lunch break time, the employees won’t be away as long if they left the premises. A lot of insurance co.s do this to get their claims people back to the cubicles sooner. The employer benefits and the perk shouldn’t be considered a wage
Making it a wage requires the employer to add up what the employee ate or didn’t eat. That is an added paperwork cost for the employer. If the employer drops the lunch due to the IRS rule, morale drops and cranky employees work less or quit, another business cost.
which may mean less opportunity for employees to spill company secrets off campus as well.
You can spill secrets all day no matter where you are, elevator, lunchroom, conference room, restroom if you have a phone.
so $20 /day x 5 days/ week x 50 wks/year = $10,000/ yr benefit, is going to net IRS $4-5000/ year according to this genius reporter. Under what rule could they tax the company anyway? How about free parking at work when parking is $30 / day at a city garage. I'm sure I wouldn't care for most Google employees , but next to the IRS thugs, I'll take their side anytime.
But Rat companies like Google will be exempted.
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