§119 — Meals or lodging furnished for the convenience of the employer
125 cases·13 followed·19 distinguished·2 questioned·2 criticized·3 limited·2 overruled·84 cited—10% support
Statute Text — 26 U.S.C. §119
There shall be excluded from gross income of an employee the value of any meals or lodging furnished to him, his spouse, or any of his dependents by or on behalf of his employer for the convenience of the employer, but only if—
in the case of meals, the meals are furnished on the business premises of the employer, or
in the case of lodging, the employee is required to accept such lodging on the business premises of his employer as a condition of his employment.
For purposes of subsection (a)—
In determining whether meals or lodging are furnished for the convenience of the employer, the provisions of an employment contract or of a State statute fixing terms of employment shall not be determinative of whether the meals or lodging are intended as compensation.
In determining whether meals are furnished for the convenience of the employer, the fact that a charge is made for such meals, and the fact that the employee may accept or decline such meals, shall not be taken into account.
If—
an employee is required to pay on a periodic basis a fixed charge for his meals, and
such meals are furnished by the employer for the convenience of the employer,
there shall be excluded from the employee’s gross income an amount equal to such fixed charge.
Subparagraph (A) shall apply—
whether the employee pays the fixed charge out of his stated compensation or out of his own funds, and
only if the employee is required to make the payment whether he accepts or declines the meals.
All meals furnished on the business premises of an employer to such employer’s employees shall be treated as furnished for the convenience of the employer if, without regard to this paragraph, more than half of the employees to whom such meals are furnished on such premises are furnished such meals for the convenience of the employer.
In the case of an individual who is furnished lodging in a camp located in a foreign country by or on behalf of his employer, such camp shall be considered to be part of the business premises of the employer.
For purposes of this section, a camp constitutes lodging which is—
provided by or on behalf of the employer for the convenience of the employer because the place at which such individual renders services is in a remote area where satisfactory housing is not available on the open market,
located, as near as practicable, in the vicinity of the place at which such individual renders services, and
furnished in a common area (or enclave) which is not available to the public and which normally accommodates 10 or more employees.
In the case of an employee of an educational institution, gross income shall not include the value of qualified campus lodging furnished to such employee during the taxable year.
Paragraph (1) shall not apply to the extent of the excess of—
the lesser of—
5 percent of the appraised value of the qualified campus lodging, or
the average of the rentals paid by individuals (other than employees or students of the educational institution) during such calendar year for lodging provided by the educational institution which is comparable to the qualified campus lodging provided to the employee, over
the rent paid by the employee for the qualified campus lodging during such calendar year.
The appraised value under subparagraph (A)(i) shall be determined as of the close of the calendar year in which the taxable year begins, or, in the case of a rental period not greater than 1 year, at any time during the calendar year in which such period begins.
For purposes of this subsection, the term “qualified campus lodging” means lodging to which subsection (a) does not apply and which is—
located on, or in the proximity of, a campus of the educational institution, and
furnished to the employee, his spouse, and any of his dependents by or on behalf of such institution for use as a residence.
For purposes of this subsection—
The term “educational institution” means—
an institution described in section 170(b)(1)(A)(ii) (or an entity organized under State law and composed of public institutions so described), or
an academic health center.
For purposes of subparagraph (A), the term “academic health center” means an entity—
which is described in section 170(b)(1)(A)(iii),
which receives (during the calendar year in which the taxable year of the taxpayer begins) payments under subsection (d)(5)(B) or (h) of section 1886 of the Social Security Act (relating to graduate medical education), and
which has as one of its principal purposes or functions the providing and teaching of basic and clinical medical science and research with the entity’s own faculty.
Treasury Regulations
- Treas. Reg. §Treas. Reg. §1.119-1 Meals and lodging furnished for the convenience of the employer
- Treas. Reg. §Treas. Reg. §1.119-1(a) Meals—(1) In general.
- Treas. Reg. §Treas. Reg. §1.119-1(b) Lodging.
- Treas. Reg. §Treas. Reg. §1.119-1(c) Business premises of the employer—(1) In general.
- Treas. Reg. §Treas. Reg. §1.119-1(d) Camp defined—(1) In general.
- Treas. Reg. §Treas. Reg. §1.119-1(e) Rules.
- Treas. Reg. §Treas. Reg. §1.119-1(f) Examples.
- Treas. Reg. §Treas. Reg. §1.119-1(i) §1.119-1(i)
125 Citing Cases
17 In effect , petitioner is asking the Court to overrule Hargrove .
Petitioner argues that her case is distinguishable from Hargrove and Middleton in that, unlike the taxpayers in those cases, she performed some work-related activities at home.9 Like the taxpayer in Smith, petitioner has not established how much work she did at home.
Unlike respondent, we do not read the legislative history to foreclose the complete deduction of employee meals in 100 percent of the cases.11 Petitioners’ deduction for their employee meals would not be limited by section 274(n)(1), for example, if section 119 allows all of petitioners’ employees to exclude the value of the meals from their gross income.
Accordingly, we need not decide whether the general rule of section 7491(a)(1) is applicable in this case.
A narrow interpretation of section 107 might work to their disadvantage.
ave used a dwelling unit for personal purposes for any day or part ofthat day on which the dwelling unit is used (1) for personal purposes by the taxpayer or by a - 10 - [*10] member ofthe family, including a lineal descendant, or (2) by any individual (except an employee with respect to whose use section 119 applies) unless for that day the dwelling unit is rented for a rental which is a fair rental under the facts and circumstances.
Accordingly, we hold that the away city hotels constituted part ofthe Bruins' business premises for the years in issue.
We hold that they are not.
* I - 8 - Section 119 excludes from an employee' s gross income the va-lue sof lodging furnished to him by his employer if three « conditions are met: (1). The lodging is.furnished for,the convenience of the employer; (2) the employee is required to accept the lodging as a condition of his employment; and (3) the lodging is on the-business premises of the employer. eLindeman v. Commissioner, supra at 613; sec. 1.119-1(b), Income Tax Regs. "The threshold requirement for section 119 is that the e
Consequently, petitioners assert that the food and lodging expenses are employer-provided “meals and lodging”, the costs for which are excluded from the Schmidts’ income under section 119 and deductible by Hillside Dairy.
Consequently, petitioners assert that the food and lodging expenses are employer-provided “meals and lodging”, the costs for which are excluded from the Weeldreyers’ income under section 119 and deductible by Dreyer Farms.
Tschetter’s income under section 119 and deductible by Wolf Creek Farm.
t that he lived there. In support of his argument, petitioner cites four Tax Court cases.22 In each cited case, the taxpayer was seeking an exclusion from gross income under section 61 for either lodging or meals provided by his employer pursuant to section 119. Under section 119(a)(2), the value of lodging furnished to an employee is excluded from the employee’s gross income if “the employee is required to accept such lodging on the business premises of his employer as a condition of his employ
Dobbe are not entitled to exclude the reimbursement for groceries from their income under section 119, they must include the entire reimbursement in their income as a dividend.
he parties focus on the fifth prong; i.e., the revenue/operating cost test. For purposes of this test, an employer may disregard the cost and revenue for any employee meal that the employer reasonably determines is excludable from gross income under section 119. Sec. 1.132-7(a)(2), Income Tax Regs. Section 119(a)(1) allows an employee to exclude from income the value of any meals furnished by an employer for the employer’s convenience and on the employer’s premises. Commissioner v. Kowalski, 434
food and beverages are a de minimis fringe benefit under section 274(n)(2), which, in turn, requires that petitioners provide the food and beverages to each of substantially all of their employees for the "convenience of the - 3 - employer" under section 119.1 We hold herein that petitioners do not provide the food and beverages to each of substantially all of their employees for the convenience of the employer, and, hence, that petitioners' deductions are limited by section 274(n)(1) because t
However, in addition to the parsonage allowance under section 107, the Code also includes section 119 (which excludes lodging on the employer’s premises for the employer’s convenience) and section 162(a)(2) (which allows a deduction for traveling expenses “while away from home”).
were liable for a $13,482 deficiency and a $2,284 accuracy-related penalty. After concessions,4 there are three issues for decision. The first issue is whether petitioners may exclude the costs of lodging provided by their employer from income under section 119. We hold that they may not. The second issue is whether Mr. and Mrs. Hargrove and Mr. and Mrs. Breeding are entitled to exclude certain allowances under section 912. We hold that they are not. The third issue is whether Mr. and Mrs. Hargr
were liable for a $13,482 deficiency and a $2,284 accuracy-related penalty. After concessions,4 there are three issues for decision. The first issue is whether petitioners may exclude the costs of lodging provided by their employer from income under section 119. We hold that they may not. The second issue is whether Mr. and Mrs. Hargrove and Mr. and Mrs. Breeding are entitled to exclude certain allowances under section 912. We hold that they are not. The third issue is whether Mr. and Mrs. Hargr
were liable for a $13,482 deficiency and a $2,284 accuracy-related penalty. After concessions,4 there are three issues for decision. The first issue is whether petitioners may exclude the costs of lodging provided by their employer from income under section 119. (cid:16)042We hold that they may not. The second issue is whether Mr. and Mrs. Hargrove and Mr. and Mrs. Breeding are entitled to exclude certain allowances under section 912. We hold that they are not. The third issue is whether Mr. and
Consequently, petitioners assert that the food and lodging expenses are employer-provided “meals and lodging”, the costs for which are excluded from the Hubers’ income under section 119 and deductible by Waterfall Farms.
Consequently, petitioners assert that the food and lodging expenses are employer-provided “meals and lodging”, the costs for which are excluded from the Hubers’ income under section 119 and deductible by Waterfall Farms.
s 2016, 2017, and 2018 (relevant years). After our Opinion in Smith v. Commissioner, No. 5191- 20, 159 T.C. (Aug. 25, 2022), and a Stipulation of Settled Issues filed by the parties, only one issue remains for decision. We must decide whether, under section 119,1 Mr. Smith may exclude from gross income the value of lodging his employer provided during the relevant years. In a Motion for Summary Judgment, Mr. Smith argues that the value of the lodging may be excluded. The Commissioner takes the o
§ 119 (stating that, in general, executive agreements made pursuant to a treaty of the United States “may be coextensive with the treaty with regard to [their] scope and subject-matter” and have “the same effect and validity as the treaty”). 6 17 U.S.T. at 2238. Pine Gap II contains a substantially identical provision. See Pine Gap II, art. X(1),
Santos did not allege facts that would have warranted the section 119 exclusion.
8 (2002); Elliotts Inc., 716 F.2d at 1247 ("Ifthe bulk ofthe corporation's earnings are being paid out in the form ofcompensation, so that the corporate profits, after payment ofthe compensation, do not represent a reasonable return on the shareholder's equity in the corporation, then an independent shareholderwould probably not approve
PPI maintained an office elsewhere. Petitioners argue that their son used a room exclusively for business purposes. They did not provide sufficient information relating to the size ofthe room allegedly used for business purposes and instead deducted 100% ofthe expenses relating to the house. Although the son performed services to renovate
8 (2002); Elliotts Inc., 716 F.2d at 1247 ("Ifthe bulk ofthe corporation's earnings are being paid out in the form ofcompensation, so that the corporate profits, after payment ofthe compensation, do not represent a reasonable return on the shareholder's equity in the corporation, then an independent shareholderwould probably not approve
PPI maintained an office elsewhere. Petitioners argue that their son used a room exclusively for business purposes. They did not provide sufficient information relating to the size ofthe room allegedly used for business purposes and instead deducted 100% ofthe expenses relating to the house. Although the son performed services to renovate
8 (2002); Elliotts Inc., 716 F.2d at 1247 ("Ifthe bulk ofthe corporation's earnings are being paid out in the form ofcompensation, so that the corporate profits, after payment ofthe compensation, do not represent a reasonable return on the shareholder's equity in the corporation, then an independent shareholderwould probably not approve
8 (2002); Elliotts Inc., 716 F.2d at 1247 ("Ifthe bulk ofthe corporation's earnings are being paid out in the form ofcompensation, so that the corporate profits, after payment ofthe compensation, do not represent a reasonable return on the shareholder's equity in the corporation, then an independent shareholderwould probably not approve
PPI maintained an office elsewhere. Petitioners argue that their son used a room exclusively for business purposes. They did not provide sufficient information relating to the size ofthe room allegedly used for business purposes and instead deducted 100% ofthe expenses relating to the house. Although the son performed services to renovate
8 (2002); Elliotts Inc., 716 F.2d at 1247 ("Ifthe bulk ofthe corporation's earnings are being paid out in the form ofcompensation, so that the corporate profits, after payment ofthe compensation, do not represent a reasonable return on the shareholder's equity in the corporation, then an independent shareholderwould probably not approve
8 (2002); Elliotts Inc., 716 F.2d at 1247 ("Ifthe bulk ofthe corporation's earnings are being paid out in the form ofcompensation, so that the corporate profits, after payment ofthe compensation, do not represent a reasonable return on the shareholder's equity in the corporation, then an independent shareholderwould probably not approve
8 (2002); Elliotts Inc., 716 F.2d at 1247 ("Ifthe bulk ofthe corporation's earnings are being paid out in the form ofcompensation, so that the corporate profits, after payment ofthe compensation, do not represent a reasonable return on the shareholder's equity in the corporation, then an independent shareholderwould probably not approve
8 (2002); Elliotts Inc., 716 F.2d at 1247 ("Ifthe bulk ofthe corporation's earnings are being paid out in the form ofcompensation, so that the corporate profits, after payment ofthe compensation, do not represent a reasonable return on the shareholder's equity in the corporation, then an independent shareholderwould probably not approve
8 (2002); Elliotts Inc., 716 F.2d at 1247 ("Ifthe bulk ofthe corporation's earnings are being paid out in the form ofcompensation, so that the corporate profits, after payment ofthe compensation, do not represent a reasonable return on the shareholder's equity in the corporation, then an independent shareholderwould probably not approve
PPI maintained an office elsewhere. Petitioners argue that their son used a room exclusively for business purposes. They did not provide sufficient information relating to the size ofthe room allegedly used for business purposes and instead deducted 100% ofthe expenses relating to the house. Although the son performed services to renovate
PPI maintained an office elsewhere. Petitioners argue that their son used a room exclusively for business purposes. They did not provide sufficient information relating to the size ofthe room allegedly used for business purposes and instead deducted 100% ofthe expenses relating to the house. Although the son performed services to renovate
8 (2002); Elliotts Inc., 716 F.2d at 1247 ("Ifthe bulk ofthe corporation's earnings are being paid out in the form ofcompensation, so that the corporate profits, after payment ofthe compensation, do not represent a reasonable return on the shareholder's equity in the corporation, then an independent shareholderwould probably not approve
8 (2002); Elliotts Inc., 716 F.2d at 1247 ("Ifthe bulk ofthe corporation's earnings are being paid out in the form ofcompensation, so that the corporate profits, after payment ofthe compensation, do not represent a reasonable return on the shareholder's equity in the corporation, then an independent shareholderwould probably not approve
77, 81-82 (1977) (whether cashpayments designated as meal allowances to state police troopers are excludable under section 119); Taggi v.
77, 81-82 (1977) (whether cash payments designated as meal allowances to state police troopers are excludable under section 119); Taggi v.
119(A) (West 2008). Because creditors can attach transferredproperties under Oklahoma law, we find that petitioner's interests in the transferred properties are "property" or a "right[] to property" under sections 6321 and 6331. See Drye; 528 U.S. at 58 (holding that a disclaimed inheritance is "property" oi. a "right[] topproperty" under sect
In his motion, respondent moves for a summary adjudication in his favor on the substantive issue presented by this case; namely, whether petitioner is entitled under section 119 to exclude from gross income the value of lodging provided to him by his employer during 2000 and 2001.
- 72 - Section 119 of the bills provided that these amendments “shall take effect as if included in the provision of the Reform Act to which such amendment relates.” On June 15, 1987, the staff of the Joint Committee on Taxation released its Description of the Technical Corrections Act of 1987 (H.R. 2636 and S. 1350) (JCS-15-87), June 15, 1987. At pages 2
Section 119 of the bills provided that these amendments “shall take effect as if included in the provision of the Reform Act to which such amendment relates.” On June 15, 1987, the staff of the Joint Committee on Taxation released its Description of the Technical Corrections Act of 1987 (H.R. 2636 and S. 1350) (JCS-1587), June 15, 1987. At 25 and 2
The value of lodging and meals that an employer furnishes to an employee is an item of income that must be included in the employee’s gross income but for the application of an exclusionary provision such as section 119 (meals and lodging furnished for the convenience of the employer).
The value of lodging and meals that an employer furnishes to an employee is an item of income that must be included in the employee’s gross income but for the application of an exclusionary provision such as section 119 (meals and lodging furnished for the convenience of the employer).
al use of the house as a residence for the entire taxable years at issue. Discussion Generally, a taxpayer may not deduct expenses incurred from the rental use of a personal residence or any portion thereof. 2We decline to address the application of sec. 119 to petitioners, as this issue was not raised by either party anywhere in the record. - 6 - Sec. 280A(a). If the taxpayer rents out his dwelling unit, deductions are allowed only to the extent the gross income derived from renting the propert
In determing whether living accommodations provided to a corporate employee constitute property used in a trade or business for purposes of section 167, this Court has taken into account the requirements of section 119: (1) The living accommodations are furnished on the business premises of the employer; (2) they are furnished for the convenience of the employer; and (3) the employee is required to accept such living accommodations as a condition of his employment.