Tags: IRS | tax | corporate | perks

IRS Considers Taxing Corporate Perks

By    |   Tuesday, 15 April 2014 03:05 PM

The Internal Revenue Service is considering taxing the perks that many companies, especially those in the technology sector, are providing for employees.

That includes free shuttle service to and from work, meals, yoga and gym classes, Fox News Channel reports. Some tech companies go all out on the meals, with fancy cafeterias and top chefs.

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Companies view the perks as necessary to attract and retain workers. They also say providing workers with food saves the employees' time, allowing them to be more productive.

But the IRS is assessing whether the perks should be classified as fringe benefits, which would subject them to tax, according to Fox.

It reports that if the IRS does make the perks taxable, companies will compensate by increasing workers' pay.

The tax rules for fringe benefits are complicated, but meals that are provided regularly by an employer generally count as a taxable perk, just as personal use of a company car does, according to The Wall Street Journal.

"I clearly think it ought to be taxable income," Martin McMahon, a tax-law professor at the University of Florida, told The Journal. In most cases, the free morsels amount to an element of workers' compensation, he said.

But other experts note that taxes aren't applied to the meals if companies offer them for a "non-compensatory" purpose for the "convenience of the employer," The Journal reports.

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The Internal Revenue Service is considering taxing the perks that many companies, especially those in the technology sector, are providing workers to make them happy.
IRS, tax, corporate, perks
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2014-05-15
Tuesday, 15 April 2014 03:05 PM
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