T.C. Memo. 1997-445
UNITED STATES TAX COURT
BOYD GAMING CORPORATION, F.K.A. THE BOYD GROUP
AND SUBSIDIARIES, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
CALIFORNIA HOTEL & CASINO AND SUBSIDIARIES, Petitioners
v. COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket Nos. 3433-95, 3434-95. Filed September 30, 1997.
Ps provide free meals to their employees in
private cafeterias located on Ps' business premises.
R determined that sec. 274(n)(1), I.R.C., limits Ps’
deduction for the cost of these meals. Ps argue that
they may deduct 100 percent of their costs under the de
minimis fringe benefit exception of sec. 274(n)(2)(B),
I.R.C., which requires in this case that Ps provide the
meals to each of substantially all of their employees
for a substantial noncompensatory business reason.
Held: Ps' deduction is limited by sec. 274(n)(1),
I.R.C.; the de minimis fringe benefit exception of sec.
274(n)(2)(B), I.R.C., is inapplicable under the facts
herein because Ps do not provide the meals to each of
substantially all of their employees for a substantial
noncompensatory business reason.
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