IRS considers taxing work perks like food, gym memberships • Hacker News Board

Re: IRS considers taxing work perks like food, gym memberships

#11

Post by perlpimp » Wed, Apr 16, 2014, 4:54 PM UTC

if companies make lunches for token values say oh 1$ then it would become night marishly hard to figure out real value of those lunches, to tax on the difference. What is real is the external debt - the reason IRS is working over time, 15 trillion of it around 95% of GDP is the reason for IRS becoming more aggressive with collections, IMO.

my 2c

Re: IRS considers taxing work perks like food, gym memberships

#12

Post by refurb » Wed, Apr 16, 2014, 4:56 PM UTC

How would the gov't deal with a heavily subsidized cafeteria? Let's say employees are only pay 30% of the real cost of supplying the food?

Re: IRS considers taxing work perks like food, gym memberships

#13

Post by mmcconnell1618 » Wed, Apr 16, 2014, 4:57 PM UTC

aresant wrote: post #5

The IRS taxes compensation. It's hard to believe it has taken them this long to realize that hundreds (or thousands) of dollars in free food and perks a month is compensation.

If I work at a company that offers free food but I don't eat anything did I receive taxable compensation? If the company offers me a bonus and I never cash the check I never get taxed on that money.

I'm not sure how the IRS could possibly assign a compensation value to individuals. One method might be to make the costs of these perks non-deductible from a company tax perspective.

Re: IRS considers taxing work perks like food, gym memberships

#14

Post by jgj » Wed, Apr 16, 2014, 4:57 PM UTC

aresant wrote: post #5

The IRS taxes compensation. It's hard to believe it has taken them this long to realize that hundreds (or thousands) of dollars in free food and perks a month is compensation.

> The IRS taxes compensation.

source? genuinely curious if those words are written somewhere.

It would seem to me that the IRS should tax income, specifically income that I can use to pay taxes (or which can reasonably and reliably be converted into something that I can use to pay taxes).

I'd love to send 40% of last week's corporate-paid lunch to the IRS but my guess is they wouldn't accept it.

Re: IRS considers taxing work perks like food, gym memberships

#15

Post by bluthru » Wed, Apr 16, 2014, 4:58 PM UTC

Good. There is no reason to not treat compensation equally.

Next up: Capital gains's different tax rate.

Re: IRS considers taxing work perks like food, gym memberships

#16

Post by Kluny » Wed, Apr 16, 2014, 4:58 PM UTC

Things like food and gym memberships are already taxed through goods and services taxes, at the time of purchase. This seems like double taxation to me. Plus, if I was an employer I would get around it by charging my employees a token 50 cents per meal or gym month, and writing the rest off as a business loss. Sounds like another way for the IRS to waste time and money on paperwork.

Re: IRS considers taxing work perks like food, gym memberships

#17

Post by ardit33 » Wed, Apr 16, 2014, 4:58 PM UTC

aresant wrote: post #5

The IRS taxes compensation. It's hard to believe it has taken them this long to realize that hundreds (or thousands) of dollars in free food and perks a month is compensation.

They are not, if they are meant to make you work harder. Eg. if you have free food/coffee at work, and you eat in, then you have more time to do work/more productive.

If your team decides to have an "offsite" at a restaurant/event, should that be taxed as well?

It just goes through a slippery slope that you view anything that a company provides as taxable. I think it would be a very short sighted decission to squeeze few dollars on the short term, for long term loss on overall productivity.

Re: IRS considers taxing work perks like food, gym memberships

#18

Post by raverbashing » Wed, Apr 16, 2014, 4:59 PM UTC

aresant wrote: post #5

The IRS taxes compensation. It's hard to believe it has taken them this long to realize that hundreds (or thousands) of dollars in free food and perks a month is compensation.

There's an acronym for that: BIK

Benefit in Kind

And is taxed in some countries (to some extent) like Ireland and Germany

Re: IRS considers taxing work perks like food, gym memberships

#19

Post by Nursie » Wed, Apr 16, 2014, 5:00 PM UTC

Already happens in the UK. Most things (with some exceptions, but most things) that used to be a perk are now taxable as income (or benefit-in-kind). Health insurance, cars, food (if it's full meals) etc. etc.

Mostly it just means that the people at the top of the chain can no longer abuse the company purse to do what the f* they like, as used to happen in the 80s...

Re: IRS considers taxing work perks like food, gym memberships

#20

Post by thecage411 » Wed, Apr 16, 2014, 5:01 PM UTC

drivingmenuts wrote: post #3

Last paragraph made me laugh: "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." Written by someone who has probably has little experience in the real world.

I do find it amusing that legal experts were consulted for their insight on business and economics.