IRS considers taxing work freebies like food - Houston weather, traffic, news | FOX 26 | MyFoxHouston

IRS considers taxing work freebies like food

Posted: Updated:
By FOX NEWS -

In competitive job markets like Silicon Valley, companies are doing everything they can to entice the best and brightest -- offering freebies that have become the stuff of legend.

Employee perks like free food at lavish cafeterias, laundry and even yoga are not unheard of.

But the taxman could soon crack down.

The IRS reportedly is looking at these perks and seeing if these companies need to start paying up for the free stuff they offer employees.

David Gamage, a tax expert and professor at the University of California, Berkeley, said it would really boil down to who benefits from these perks.

"To what extent is this intended as a perk, a form of compensation, for the benefit of the employee, or to what extent is this just another way the employer gets the employee to work harder and longer and do things for the benefit of the employer?" he said.

If it's the latter, then it's harder for the IRS to tax it.

The Wall Street Journal first reported that the agency is considering whether the freebies like food, shuttles, haircuts and more are really fringe benefits on which workers should be taxed. Some tax experts see the perks as skirting the edges of the law, and warn the companies may be violating it -- but also think it would be a very aggressive move for the already-busy IRS to pursue this when they have much more on their plate.

Silicon Valley-based Clari, which has several dozen staffers developing cloud technology for smart phones, is one such company that offers free food -- to workers who rarely leave their desks.

CEO and co-founder Andy Byrne argues that providing good, healthy food is a necessity, not a luxury, and that everyone benefits.

"They win [because] they're happier, our customers win [because] they get a higher quality product and then our shareholders win because they see our momentum in the market. For a small company like Clari, the idea of taxing the perks would have a devastating effect, not only for the employers who would have to cancel the perk, but also for the workers who would have lower productivity," he said.

IRS officials declined to comment for this article.

According to Gamage, these perks have become a necessity in the workplace.

"Tech is a really competitive world at the high end, in terms of employers recruiting the top talent, and employers have responded; not just by paying high salaries, but by providing all sorts of perks," he said.

Even if the IRS does crack down on this perk, the high-tech lunch isn't likely to completely disappear. Legal experts suspect most companies will probably just report it as "taxable income" to employees and then pay them more in salary to cover the cost.

Read More

  • Local NewsLocal NewsMore>>

  • 3 Nassau beaches closed due to heavy rainfall

    3 Nassau beaches closed due to heavy rainfall

    Monday, July 28 2014 11:27 AM EDT2014-07-28 15:27:54 GMT
    Three Nassau County beaches have been closed to bathing due to heavy rainfall. County health officials say storm water runoff can elevate bacterial levels and affect bathing water quality. The three South Shore beaches that were closed Monday are: Hewlett Point Beach; Island Park Beach; and Merrick Estates Civic Association. In addition, Biltmore and Philip Healey beaches in Massapequa remain closed to bathing due to elevated levels of bacteria.
    Three Nassau County beaches have been closed to bathing due to heavy rainfall. County health officials say storm water runoff can elevate bacterial levels and affect bathing water quality. The three South Shore beaches that were closed Monday are: Hewlett Point Beach; Island Park Beach; and Merrick Estates Civic Association. In addition, Biltmore and Philip Healey beaches in Massapequa remain closed to bathing due to elevated levels of bacteria.
  • 3 NJ mayors to announce anti-crime plan

    3 NJ mayors to announce anti-crime plan

    Monday, July 28 2014 9:03 AM EDT2014-07-28 13:03:29 GMT
    The mayors of three of New Jersey's largest cities are announcing a joint initiative to combat violent crime. Newark Mayor Ras Baraka, Jersey City Mayor Steven Fulop and Paterson Mayor Jose Torres have scheduled a news conference in Jersey City for Monday afternoon to announce the plan. The news conference is being held in one of Jersey City's most crime-plagued neighborhoods.
    The mayors of three of New Jersey's largest cities are announcing a joint initiative to combat violent crime. Newark Mayor Ras Baraka, Jersey City Mayor Steven Fulop and Paterson Mayor Jose Torres have scheduled a news conference in Jersey City for Monday afternoon to announce the plan. The news conference is being held in one of Jersey City's most crime-plagued neighborhoods.
  • Man charged with shooting pet turtle

    Man charged with shooting pet turtle

    Monday, July 28 2014 8:26 AM EDT2014-07-28 12:26:19 GMT
    A Stonington man has been charged with cruelty to animals after police say he shot his girlfriend's pet turtle. Steven Richard, 31, reportedly used a BB gun to shoot the turtle in the head Friday night outside a home on Pawtucket Avenue. Police responded to the home just after 8 p.m. when a neighbor reported an argument between Richard and the woman who lives there.
    A Stonington man has been charged with cruelty to animals after police say he shot his girlfriend's pet turtle. Steven Richard, 31, reportedly used a BB gun to shoot the turtle in the head Friday night outside a home on Pawtucket Avenue. Police responded to the home just after 8 p.m. when a neighbor reported an argument between Richard and the woman who lives there.
Powered by WorldNow

KRIV FOX 26
4261 Southwest Freeway
Houston, TX 77027

Phone: (713) 479-2801
Fax: (713) 479-2859

Didn't find what you were looking for?
All content © Copyright 2000 - 2014 Fox Television Stations, Inc. and Worldnow. All Rights Reserved.
Privacy Policy | Terms of Service | Ad Choices