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(Business Insider)   Free food for Silicon Valley employees stirs up the appetite of the IRS   (businessinsider.com ) divider line
    More: Obvious, Food Tech, Silicon Valley, IRS, fringe benefits, tax year  
•       •       •

1606 clicks; posted to Business » on 03 Sep 2014 at 10:04 AM (1 year ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



49 Comments   (+0 »)
   
View Voting Results: Smartest and Funniest

Archived thread
 
2014-09-03 07:57:49 AM  
This is why we can't have nice things.
 
2014-09-03 08:32:27 AM  
My office offers free drinking water and bathroom use. Better get on that too.
 
2014-09-03 08:35:26 AM  
Yeah, tax socialism. that will work.
Fark the IRS.
They can go collect from BOA.
 
2014-09-03 09:28:21 AM  

stpauler: My office offers free drinking water and bathroom use. Better get on that too.


Maryland has a flush tax....and a rain tax. But that's another issue.
 
2014-09-03 09:46:57 AM  
It's so much easier than going after the hundreds of billions corporations aren't paying by hiding outside the country.
 
2014-09-03 10:13:00 AM  
They came for the free food and I said nothing for I brought my lunch.

They came for the free gym and I was silent for I got winded just thinking about snacks.

They came for the free beverages and I kept quiet for I buy 64 ouncers down to the 7-11.

They came for the free handies in the restroom and I tried to speak but there was no one left to hear me. For they had all left to work at the call center down the street. Free donuts, coffee, massage chairs, pajama onesies, go cart rides...
 
2014-09-03 10:13:03 AM  

Walker: stpauler: My office offers free drinking water and bathroom use. Better get on that too.

Maryland has a flush tax....and a rain tax. But that's another issue.



i1.ytimg.com

                
                    Tax Everything?
 
2014-09-03 10:17:01 AM  
When 20% of the "manufacturing" jobs are at restaurants , someone needs to bring back the tax deductible boozy lunch.  It would be good for the economy and billionaires.
 
2014-09-03 10:22:53 AM  
Hey, the IRS are being assholes. Must be a day ending in Y.
 
2014-09-03 10:26:11 AM  

houstondragon: Hey, the IRS are being assholes. Must be a day ending in Y.


You have a problem with the IRS following the law? Complain to Congress.
 
2014-09-03 10:26:36 AM  

edmo: It's so much easier than going after the hundreds of billions corporations aren't paying by hiding outside the country.


The money isn't hidden.  And if a corporation I'm invested in pays more taxes than its legally obligated too I would insist that the CEO and CFO be canned immediately.
 
2014-09-03 10:26:49 AM  
So people think that these companies should be able to give employees thousands of dollars in compensation and not have it taxed?
 
2014-09-03 10:28:55 AM  
GOOD!

there is such a disparity in that area between those who work in the tech industry and the others. The tax dollars ate needed for the local school systems and affordable housing. Pay your farking taxes, assholes.

your lunch program isn't a non-profit.
 
2014-09-03 10:30:15 AM  
are not ate

haha appropriate typo
 
2014-09-03 10:34:26 AM  

dywed88: So people think that these companies should be able to give employees thousands of dollars in compensation and not have it taxed?


I guess so.  Free meals is a benefit that should be taxed as it should be.  Now if it was just a meal here and there then I would say they get a pass but free meals everyday?  Sorry but you are eating about $2500 worth of food a year that is compensation and should be treated like it.
 
2014-09-03 10:43:25 AM  
Headline:  Free food for Silicon Valley employees stirs up the appetite of the IRS


Of course it does.


max_pooper: houstondragon: Hey, the IRS are being assholes. Must be a day ending in Y.

You have a problem with the IRS following the law? Complain to Congress.



Yep.
 
2014-09-03 10:45:37 AM  
I work at was is, technically, a non-profit and one of the perks is free lunch and dinner for employees. I wonder if we'll get taxed. It would be a bummer to lose that perk since the food is really good and amount of money I save but not having to buy lunch is a nice side-effect.
 
2014-09-03 10:48:32 AM  
On the one hand, yes, perks should be taxed.  Once upon a time, back when marginal tax rates were stupid high, doling out high end perks was a way to (over) compensate executives without exposing them to the IRS (why do you think Louis/Billy Ray lived in a house owned by the Dukes in Trading Places?).  Everyone pretty much agreed this was bad, so tax law changed to make non-cash compensation taxable which pretty much brought about the end of these abuses - hardly anyone drives a company car any more, executives buy their own houses, and people biatch about executive compensation going up (when really it just changed from non-cash to cash).  But still, mostly good.

On the other hand, this just seems petty.  As I understand it, Google and others that run buses around the Bay Area already issue a small stipend (immediately withheld) to cover the taxability of the bus service so presumably they would do the same thing for the lunches, but this is just such small beer I can't imagine the proceeds actually covering the enforcement costs.
 
2014-09-03 10:49:08 AM  

TNel: dywed88: So people think that these companies should be able to give employees thousands of dollars in compensation and not have it taxed?

I guess so.  Free meals is a benefit that should be taxed as it should be.  Now if it was just a meal here and there then I would say they get a pass but free meals everyday?  Sorry but you are eating about $2500 worth of food a year that is compensation and should be treated like it.


so how do you feel about air conditioning? What value do you place on that? I'm pretty sure you could work without it.  Does your company provide free parking?
 
2014-09-03 10:50:35 AM  

Jiro Dreams Of McRibs: They came for the free beverages and I kept quiet for I buy 64 ouncers down to the 7-11.


7e8c.https.cdn.softlayer.net
 
2014-09-03 10:52:16 AM  

mrlewish: so how do you feel about air conditioning? What value do you place on that? I'm pretty sure you could work without it. Does your company provide free parking?


http://www.irs.gov/publications/p15b/ar02.html
 
2014-09-03 10:54:44 AM  

TNel: mrlewish: so how do you feel about air conditioning? What value do you place on that? I'm pretty sure you could work without it. Does your company provide free parking?

http://www.irs.gov/publications/p15b/ar02.html


Here I'll do the work for you:

"De Minimis Meals
You can exclude any occasional meal or meal money you provide to an employee if it has so little value (taking into account how frequently you provide meals to your employees) that accounting for it would be unreasonable or administratively impracticable. The exclusion applies, for example, to the following items.
Coffee, doughnuts, or soft drinks.
Occasional meals or meal money provided to enable an employee to work overtime. However, the exclusion does not apply to meal money figured on the basis of hours worked.
Occasional parties or picnics for employees and their guests.

This exclusion also applies to meals you provide at an employer-operated eating facility for employees if the annual revenue from the facility equals or exceeds the direct costs of the facility. For this purpose, your revenue from providing a meal is considered equal to the facility's direct operating costs to provide that meal if its value can be excluded from an employee's wages as explained under Meals on Your Business Premises , later.

If food or beverages you furnish to employees qualify as a de minimis benefit, you can deduct their full cost. The 50% limit on deductions for the cost of meals does not apply. The deduction limit on meals is discussed in chapter 2 of Publication 535.  "
 
2014-09-03 11:02:11 AM  

mrlewish: Does your company provide free parking?


If they pay for it (i.e. it is in a lot that the public can access if they pay) then it is a taxable benefit.

OptionC: As I understand it, Google and others that run buses around the Bay Area already issue a small stipend (immediately withheld) to cover the taxability of the bus service so presumably they would do the same thing for the lunches, but this is just such small beer I can't imagine the proceeds actually covering the enforcement costs.


If they already withheld on it and reported the income on the employee's W-2, then they wouldn't have any issues. At Google alone this would be millions of dollars per year in taxes. Three catered meals per day for all employees. If there were 10,000 employees recieving 3 meals per day valued at $5 that is about $40,000,000 in benefits.
 
2014-09-03 11:02:28 AM  
My work has some crappy fried chicken and mostiacolli every Christmas. How much do I/they owe?
 
2014-09-03 11:04:27 AM  
The more relevant part that I didn't copy would be:

Meals on Your Business Premises
You can exclude the value of meals you furnish to an employee from the employee's wages if they meet the following tests.
They are furnished on your business premises.
They are furnished for your convenience.

This exclusion does not apply if you allow your employee to choose to receive additional pay instead of meals.
On your business premises.  Generally, for this exclusion, the employee's place of work is your business premises.

For your convenience.  Whether you furnish meals for your convenience as an employer depends on all the facts and circumstances. You furnish the meals to your employee for your convenience if you do this for a substantial business reason other than to provide the employee with additional pay. This is true even if a law or an employment contract provides that the meals are furnished as pay. However, a written statement that the meals are furnished for your convenience is not sufficient.
 
2014-09-03 11:07:39 AM  
Wasn't it a law in Sweden that employers were required to provide at least one hot meal to workers per day?  Isn't that where the Ikea cafeterias got started?

What is the local tax benefit for the local community for me to go to McD's every day for lunch vs what the company will pay in sales taxes and other fees?  At the places that had discounted lunches, the total amount spent and taxed was far higher than at places that didn't do that.
 
2014-09-03 11:42:24 AM  
Couldn't they "sell" the meals to the employee's at a loss and not have to report it?   Say, like $1 or a nickel?

/Not an IRS tax expert
//Didn't even sleep at a holiday inn express
 
2014-09-03 11:53:16 AM  

Da Bum: Couldn't they "sell" the meals to the employee's at a loss and not have to report it?   Say, like $1 or a nickel?

/Not an IRS tax expert
//Didn't even sleep at a holiday inn express


Damn you, that was my genius idea. I bet the irs would say you have to charge cost.
 
2014-09-03 11:59:38 AM  
Not a tax lawyer, but could the company just deduct $1.00 from everyone's paycheck who participated and say it was not compensation but just a cheap meal plan you can purchase if you want?

Kinda like quarter beer night...
 
2014-09-03 12:00:13 PM  

Da Bum: Couldn't they "sell" the meals to the employee's at a loss and not have to report it?   Say, like $1 or a nickel?

/Not an IRS tax expert
//Didn't even sleep at a holiday inn express


/shakes fist
 
2014-09-03 12:13:02 PM  

MilesTeg: Da Bum: Couldn't they "sell" the meals to the employee's at a loss and not have to report it?   Say, like $1 or a nickel?

/Not an IRS tax expert
//Didn't even sleep at a holiday inn express

/shakes fist


I think not:  "Meals with a charge.  The fact that you charge for the meals and that your employees may accept or decline the meals is not taken into account in determining whether or not meals are furnished for your convenience.  "
 
2014-09-03 12:37:58 PM  

Da Bum: Couldn't they "sell" the meals to the employee's at a loss and not have to report it?   Say, like $1 or a nickel?

/Not an IRS tax expert
//Didn't even sleep at a holiday inn express


If you charged $1 per meal, then there would be a reduction in the taxable benefit by $1 per meal. You would have to charge areasonable amount to not give a benefit. Now, I am not sure exactly what the IRS considers a reasonable amount in this situation as I haven't dealt with it specifically in the US, but it would be a minimum of the cost to the employer of providing the meals and a maximum of the FMV and dependant on the specific case.

Just like if you reimburse your employer 1 cent per mile for personal use of the company car, you still get dinged for the rest.
 
2014-09-03 03:44:39 PM  

Pentaxian: I work at was is, technically, a non-profit and one of the perks is free lunch and dinner for employees. I wonder if we'll get taxed. It would be a bummer to lose that perk since the food is really good and amount of money I save but not having to buy lunch is a nice side-effect.


So do your donors know that a farkload of their money goes to this?  My nonprofit has free coffee/drinks for employees but I wouldn't call that excessive (other things that mgt springs for, though...).  Free daily meals is pretty excessive for an nonprofit.
 
2014-09-03 04:25:13 PM  

Mrs.Sharpier: GOOD!

there is such a disparity in that area between those who work in the tech industry and the others. The tax dollars ate needed for the local school systems and affordable housing. Pay your farking taxes, assholes.

your lunch program isn't a non-profit.


Tax dollars collected by the IRS have little to with with school funding and housing is made more unaffordable for people who pay 100% of their own way when the government pays 80% of an artificially inflated rent price to slum lords so that section 8 white trash can live on the cheap.  I agree fully about the tech industry though.  I'm sure if you asked them they fully support higher taxes, for other people....
 
2014-09-03 04:39:31 PM  
I can't imagine what would happen if this were Halliburton giving free lunches. The Fark Socialist BrigadeTM members would have their heads exploding.
 
2014-09-03 04:47:46 PM  

TheSelphie: Pentaxian: I work at was is, technically, a non-profit and one of the perks is free lunch and dinner for employees. I wonder if we'll get taxed. It would be a bummer to lose that perk since the food is really good and amount of money I save but not having to buy lunch is a nice side-effect.

So do your donors know that a farkload of their money goes to this?  My nonprofit has free coffee/drinks for employees but I wouldn't call that excessive (other things that mgt springs for, though...).  Free daily meals is pretty excessive for an nonprofit.


Sounds like he works for the NFL or a Green Bay Packers.
 
2014-09-03 05:51:53 PM  

dywed88: So people think that these companies should be able to give employees thousands of dollars in compensation and not have it taxed?


It comes down to how they quantify what that tax is and how much it costs the government to produce a 10,000 page "report" showing how they're taxing it. At the cost of 10s of millions of dollars to essentially get back pennies on the dollar back. They could probably just raise the taxes of the 5 Waltons by .001% and get the same result. However it's out of fashion these days to tax people who were born with billions so.. carry on IRS.. Carry on.
 
2014-09-03 07:17:35 PM  

xynix: dywed88: So people think that these companies should be able to give employees thousands of dollars in compensation and not have it taxed?

It comes down to how they quantify what that tax is and how much it costs the government to produce a 10,000 page "report" showing how they're taxing it. At the cost of 10s of millions of dollars to essentially get back pennies on the dollar back. They could probably just raise the taxes of the 5 Waltons by .001% and get the same result. However it's out of fashion these days to tax people who were born with billions so.. carry on IRS.. Carry on.


It isn't like these people are poor. The majority of people caught by this will be well in excess of 50,000.

Asa direct response, first, nice job just pulling absurdly large numbers out of your ass. It would take a long time for the IRS to spend tens of millions on this.

Second, this isn't pennies. It is tens of millions of dollars. Google has approximtely 12,000 workers in Mountainview, Facebook has about 8,000 in Menlo Park. If they average 1.5 meals per work day at $5 per meal (and based on experience I would guess that both of those are on the low end) that is about $40,000,000 of unreported income. At the 30% from the article, more than $10,000,000 in taxes per year from two companies.
 
2014-09-03 10:04:49 PM  

Big_Fat_Liar: Mrs.Sharpier: GOOD!

there is such a disparity in that area between those who work in the tech industry and the others. The tax dollars ate needed for the local school systems and affordable housing. Pay your farking taxes, assholes.

your lunch program isn't a non-profit.

Tax dollars collected by the IRS have little to with with school funding and housing is made more unaffordable for people who pay 100% of their own way when the government pays 80% of an artificially inflated rent price to slum lords so that section 8 white trash can live on the cheap.  I agree fully about the tech industry though.  I'm sure if you asked them they fully support higher taxes, for other people....


Well, many of them are liberals.
 
2014-09-04 05:36:02 AM  
I used to work for a company that had free lunches brought in. It rocked. They also didn't charge us a dime for health/dental/optical insurance.

That all went out the window when we were acquired.
 
2014-09-04 09:16:36 AM  

dywed88: xynix: dywed88: So people think that these companies should be able to give employees thousands of dollars in compensation and not have it taxed?

It comes down to how they quantify what that tax is and how much it costs the government to produce a 10,000 page "report" showing how they're taxing it. At the cost of 10s of millions of dollars to essentially get back pennies on the dollar back. They could probably just raise the taxes of the 5 Waltons by .001% and get the same result. However it's out of fashion these days to tax people who were born with billions so.. carry on IRS.. Carry on.

It isn't like these people are poor. The majority of people caught by this will be well in excess of 50,000.

Asa direct response, first, nice job just pulling absurdly large numbers out of your ass. It would take a long time for the IRS to spend tens of millions on this.

Second, this isn't pennies. It is tens of millions of dollars. Google has approximtely 12,000 workers in Mountainview, Facebook has about 8,000 in Menlo Park. If they average 1.5 meals per work day at $5 per meal (and based on experience I would guess that both of those are on the low end) that is about $40,000,000 of unreported income. At the 30% from the article, more than $10,000,000 in taxes per year from two companies.


Well I'm in that group that make well in excess of 50,000. The IRS already tags me 35% a year and every month I get another letter from them telling me that I owe them more and then every month I have to call X company to prove that I paid X or didn't sell X stock and ship it back to the IRS. Literally every month and this next round is due 9/10/14 and I really don't feel like dicking with it but I have to.

Meanwhile the poor aren't paying taxes and the ultra rich are paying less than half what I pay. So here they go again nailing the middle class or upper middle class if you prefer on yet another thing that at the end of the day will be a rounding error on a single Walton's yearly income. We're farking tired of it. My friend who owns a little produce shop is currently getting nailed by the IRS because his company turned an OK profit on 300k in sales last year. Now he'll spend thousands on accountants and he can't afford to deal with this audit.

Sick of this IRS shiat man.. seriously this tap is running dry.
 
2014-09-04 09:56:49 AM  

mcreadyblue: TheSelphie: Pentaxian: I work at was is, technically, a non-profit and one of the perks is free lunch and dinner for employees. I wonder if we'll get taxed. It would be a bummer to lose that perk since the food is really good and amount of money I save but not having to buy lunch is a nice side-effect.

So do your donors know that a farkload of their money goes to this?  My nonprofit has free coffee/drinks for employees but I wouldn't call that excessive (other things that mgt springs for, though...).  Free daily meals is pretty excessive for an nonprofit.

Sounds like he works for the NFL or a Green Bay Packers.


Ah yes, that's right, those are considered "non-profits."  Forgot about that horseshiat.  That's quite a good deal they have going there.
 
2014-09-04 10:41:41 AM  

xynix: dywed88: xynix: dywed88: So people think that these companies should be able to give employees thousands of dollars in compensation and not have it taxed?

It comes down to how they quantify what that tax is and how much it costs the government to produce a 10,000 page "report" showing how they're taxing it. At the cost of 10s of millions of dollars to essentially get back pennies on the dollar back. They could probably just raise the taxes of the 5 Waltons by .001% and get the same result. However it's out of fashion these days to tax people who were born with billions so.. carry on IRS.. Carry on.

It isn't like these people are poor. The majority of people caught by this will be well in excess of 50,000.

Asa direct response, first, nice job just pulling absurdly large numbers out of your ass. It would take a long time for the IRS to spend tens of millions on this.

Second, this isn't pennies. It is tens of millions of dollars. Google has approximtely 12,000 workers in Mountainview, Facebook has about 8,000 in Menlo Park. If they average 1.5 meals per work day at $5 per meal (and based on experience I would guess that both of those are on the low end) that is about $40,000,000 of unreported income. At the 30% from the article, more than $10,000,000 in taxes per year from two companies.

Well I'm in that group that make well in excess of 50,000. The IRS already tags me 35% a year and every month I get another letter from them telling me that I owe them more and then every month I have to call X company to prove that I paid X or didn't sell X stock and ship it back to the IRS. Literally every month and this next round is due 9/10/14 and I really don't feel like dicking with it but I have to.

Meanwhile the poor aren't paying taxes and the ultra rich are paying less than half what I pay. So here they go again nailing the middle class or upper middle class if you prefer on yet another thing that at the end of the day will be a rounding error on a single Walton's year ...


So you proclaim yourself to be in the top 1% of earners but cannot afforc to pay a few dollars for your meals?
 
2014-09-04 11:12:53 AM  

dywed88: So you proclaim yourself to be in the top 1% of earners but cannot afforc to pay a few dollars for your meals?


It's not about afford. It's about giving the government over $100,000 a year and them wanting more. Free meals, cokes, coffee, etc have been free around tech companies for well over a decade. Now they want more from us and they're attacking our companies to do it. Tax other people for a change. We're in the highest bracket of anyone else. It's someone elses turn. Yours for example. Your mentality is why small businesses are having such a hard time. Your focus is on people like me when people like the Kochs and the Waltons are in the lowest tax bracket of people that make any income.

By the way since I mentioned coffee it seems like the fed should also be going after all those companies offering free tea, coffee, hell even water. What about electricity? I'm sure someone is trying to figure out how to tax me for free lighting.
 
2014-09-04 12:00:30 PM  

xynix: dywed88: So you proclaim yourself to be in the top 1% of earners but cannot afforc to pay a few dollars for your meals?

It's not about afford. It's about giving the government over $100,000 a year and them wanting more. Free meals, cokes, coffee, etc have been free around tech companies for well over a decade. Now they want more from us and they're attacking our companies to do it. Tax other people for a change. We're in the highest bracket of anyone else. It's someone elses turn. Yours for example. Your mentality is why small businesses are having such a hard time. Your focus is on people like me when people like the Kochs and the Waltons are in the lowest tax bracket of people that make any income.

By the way since I mentioned coffee it seems like the fed should also be going after all those companies offering free tea, coffee, hell even water. What about electricity? I'm sure someone is trying to figure out how to tax me for free lighting.


In theory your coffee and tea are taxable, but the IRS (and/or Congress) has determined that in most cases the amounts are negligible and not worth the time of the employee, the company, and the IRS. Where an employer is providing three catered meals per day the benefit is much more significant.

There are fairly straightforward rules. Just because they haven't been enforced in the past doesn't mean they shouldn't be now (and based on the article, they are looking at assessing penalties for prior years against these corporations. Although, the most likely result is that companies pay a smaller amount to the IRS and agree to comply with the law going forward.
 
2014-09-04 02:40:13 PM  

Walker: stpauler: My office offers free drinking water and bathroom use. Better get on that too.

Maryland has a flush tax....and a rain tax. But that's another issue.


Another issue as in "not an issue", right?

I'm from there and got flooded with "derp taxing rain!!". People are just too dumb to understand the point of the whole thing.
 
2014-09-04 03:00:22 PM  

nocturnal001: Walker: stpauler: My office offers free drinking water and bathroom use. Better get on that too.

Maryland has a flush tax....and a rain tax. But that's another issue.

Another issue as in "not an issue", right?

I'm from there and got flooded with "derp taxing rain!!". People are just too dumb to understand the point of the whole thing.


Missed that one before. It is just retarded.

I think the plan itself is silly (taxing based on hard surfaces), and at first glance seems wrong (if nitrogen run-off is the issue, should the focus not be on the sources of the nitrogen, namely fertilizers? Which are used on unimproved land that isn't being taxed). But the "rain tax" angle is awful.

Not to mention it is the exact type of tax the right wing should support (ignoring my questions about their targetting, for the moment). It directly links the tax to the spending and the cause. In effect it factors an externality into the market. Perfect.
 
2014-09-04 03:20:41 PM  
But corporations and billionaires paying no taxes?  That's not a problem.
 
2014-09-04 03:23:22 PM  

dywed88: nocturnal001: Walker: stpauler: My office offers free drinking water and bathroom use. Better get on that too.

Maryland has a flush tax....and a rain tax. But that's another issue.

Another issue as in "not an issue", right?

I'm from there and got flooded with "derp taxing rain!!". People are just too dumb to understand the point of the whole thing.

Missed that one before. It is just retarded.

I think the plan itself is silly (taxing based on hard surfaces), and at first glance seems wrong (if nitrogen run-off is the issue, should the focus not be on the sources of the nitrogen, namely fertilizers? Which are used on unimproved land that isn't being taxed). But the "rain tax" angle is awful.

Not to mention it is the exact type of tax the right wing should support (ignoring my questions about their targetting, for the moment). It directly links the tax to the spending and the cause. In effect it factors an externality into the market. Perfect.


Many municipalities already have a charge for businesses that have large amount of impervious area. That is because adding a giant parking lot suddenly dumps a ton more water into the storm water system. Basically it is already something that people are paying for.

We added a pool and patio to our house last year and our city made me install a rain garden to offset the new water runoff. It's annoying for me personally, but I get it.
 
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