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that charge a fee for their meals. Accordingly, we will deny
respondent’s motion for partial summary judgment in her favor,
and we will set this case for trial to determine whether
petitioners qualify for the de minimis fringe benefit exception
to section 274(n)(1). In denying respondent’s motion, we have
considered all arguments made by her and, to the extent not
discussed above, have found them to be without merit.
Turning to petitioners’ argument in support of judgment in
their favor, section 274(e)(8) provides an exception for
"Expenses for goods or services * * * which are sold by the
taxpayer in a bona fide transaction for an adequate and full
consideration in money or money's worth.” Petitioners argue that
the meals fall within this statutory language. Petitioners argue
that they sell the meals to their employees in consideration for
the employees’ services and the employees’ promises not to leave
petitioners’ business premises during breaks.
We are not persuaded by petitioners’ arguments on section
274(e)(8). Put simply, we do not believe that petitioners sold
the meals to their employees in a bona fide transaction for
adequate and full consideration. We believe that petitioners
merely presented the meals to their employees in connection with
the employees’ employment with petitioners. To say the least, we
are sure that petitioners’ employees would be surprised to hear
that they were paying arm’s-length, fair market value prices for
the meals. Yet, this is the holding that petitioners would have
us reach. Such a holding is unsupported by the record and is
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