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that would be curtailed by denying petitioners a full deduction
for the cost of their employee meals. Indeed, petitioners’
provision of employee meals is a far stride from the abuses that
the Congress chose to address in their promulgation of section
274(n)(1). We recognize that the Congress enacted that section
out of their concern for taxpayers’ deducting expenses, such as
meals, that were inherently personal. All the same, we do not
read section 274(n)(1) to disallow a full deduction for the cost
of “free” employee meals 100 percent of the time.
In short, section 274(n)(2) will allow petitioners to deduct
the entire cost of their employee meals if the meals are a de
minimis fringe benefit under section 132(e). Thus, petitioners
may deduct the meals’ full cost if they reasonably determine that
the meals are excludable from their employees’ incomes under
section 119. Sec. 1.132-7(a)(2), Income Tax Regs.12 To the
extent that respondent believes that the de minimis fringe
benefit exception is inapplicable because the meals were
furnished free of charge, we disagree. Neither the text of
section 274 nor its legislative history persuades us that the
de minimis fringe benefit exception applies only to cafeterias
12 We recognize that our incorporation of sec. 119 into the
de minimis fringe benefit exception of sec. 274(n)(2)(B) rests
solely on sec. 1.132-7(a)(2), Income Tax Regs. Respondent
acknowledges that these regulations literally apply to sec.
274(n)(2)(B), but argues that she did not intend for this literal
application. Respondent asks the Court to adopt a rule that
would limit these regulations to determinations under sec. 132.
We refuse to do so. To the extent that respondent wants to limit
the plain meaning of the words inscribed in an income tax
regulation, she (and not the Court) must prescribe the
limitation.
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