IRS acquiesces in case holding meals as de minimis fringe benefits
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Tuesday, February 26, 2019

IRS acquiesces in case holding meals as de minimis fringe benefits

By Payroll and Entitlements Editorial Staff

The IRS has recommended acquiescence in result only to the Tax Court decision in J.M Jacobs, 148 TC —, No. 24, Dec. 60,947. In Jacobs, the Tax Court allowed a professional hockey team, organized as an S corporation, to deduct the entire cost of pregame meals for players and personnel at away games as de minimis fringe benefits. The pregame meals were mandatory and the players used the time to meet with coaches and review game film and with public relations staff to prepare for interviews. The pregame meals were provided to the traveling employees for substantial noncompensatory business reasons, including for nutritional and performance reasons, and were provided before, during or after the employees’ workday. Therefore, the meals were not subject to the 50-percent limit on business meals.

The IRS recommended acquiescence in result only as to whether a professional hockey team’s expenses for providing pregame meals at away city hotels were fully deductible because they were provided at employer-operated facilities. In addition, the IRS announced the expansion of its acquiescence program to include other civil tax cases where guidance is determined to be helpful. (Acquiescence Announcement for AOD 2019-1 February 18, 2019.).

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