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- Title
Recent Developments in Taxation.
- Authors
Ellentuck, Albert B.
- Abstract
This article focuses on the decision of the U.S. Court of Claims in the case Hotel Conquistador Inc. versus U.S. in 1980. The court held that the value of certain meals provided to employees did not constitute wages for Federal Insurance Contributions Act and Federal Unemployment Tax Act tax purposes. The court noted that while the meal commitments were included in some collective-bargaining agreements, the free meals were not bargained for by most of the employees or their unions, and there was no showing whether the collective-bargaining agreements including such commitments preceded or succeeded a company policy on furnishing such meals. The taxpayer had a policy of not allowing its employees to wear uniforms off the premises. The employees were not allowed to use public restaurants on the premises while they were in uniform. The policy was adopted in order to reduce the necessary mealtime given to employees. There was no showing of any services rendered by the employee while eating the meal. The value of the meal was insubstantial and had no fixed or established proportion to the value of the employee's regular services. For any business where it appears the case might be applicable, it would certainly be worthwhile to consult with a tax adviser to determine whether the scope of the Conquistador case is broad enough to cover one's business and to analyze the advisability of refund claims and the other procedures discussed in order to take advantage of the court's decision.
- Subjects
UNITED States; EMPLOYEE food service; WAGES; HOTEL employees; COLLECTIVE labor agreements in hotel industry
- Publication
Journal of Accounting, Auditing & Finance, 1980, Vol 3, Issue 2, p185
- ISSN
0148-558X
- Publication type
Article