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a case, the de minimis fringe benefit exception of sections
132(e) and 274(n)(2)(B) will allow petitioners to claim a
complete deduction for the meals because the Cafeterias’ revenues
and expenses will both be zero for purposes of the
revenue/operating cost test.
Respondent is mistaken when she boldly asserts that the
Congress did not want section 119 to apply to determinations
under section 274(n)(2)(B). The incorporation of section 119
into the de minimis fringe benefit exception of section 132(e)
first appeared in section 1.132-7T(a)(2), Temporary Income Tax
Regs., 50 Fed. Reg. 52309 (Dec. 23, 1985), which was published
before section 274(n)(2)(B) came into law. According to a
longstanding, well-established “benign fiction” of statutory
construction, we assume that the Congress knew of this
incorporation when it promulgated section 274(n)(2)(B). Green v.
Bock Laundry Mach. Co., 490 U.S. 504, 528 (1989) (Scalia, J.,
concurring in judgment); see Lindahl v. OPM, 470 U.S. 768, 783
n.15 (1985); Merrill Lynch, Pierce, Fenner & Smith, Inc. v.
Curran, 456 U.S. 353, 382 n.66 (1982); Lorillard v. Pons, 434
U.S. 575, 580-581 (1978); Sohappy v. Hodel, 911 F.2d 1312,
1317 (9th Cir. 1990); Kovacs v. Commissioner, 100 T.C. 124,
129-130, 133 (1993), affd. 25 F.3d 1048 (6th Cir. 1994). With
regard to the statement in the conference report that deductions
for meal expenses are reduced to 80 percent “whether or not such
meals are excludable from the employee’s gross income under sec.
119”, H. Conf. Rept. 99-841, supra at II-24 to II-25, 1986-3 C.B.
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