- 3 -
employer" under section 119.1 We hold herein that petitioners do
not provide the food and beverages to each of substantially all
of their employees for the convenience of the employer, and,
hence, that petitioners' deductions are limited by section
274(n)(1) because the food and beverages are not a de minimis
fringe benefit under section 274(n)(2)(B). Unless otherwise
stated, section references are to the Internal Revenue Code in
effect for the years in issue. Rule references are to the Tax
Court Rules of Practice and Procedure.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulated facts and the exhibits submitted therewith are
incorporated herein by this reference. The record consists
mainly of these stipulated facts and exhibits and the testimony
of numerous witnesses, all of whom were called by petitioners.
Petitioners' primary witnesses were: (1) Robert Boughner,
petitioners' executive vice president during the subject years,
(2) John Repetti, CHC's casino manager during the subject years,
(3) Steve Thompson, the general manager of Fremont Hotel & Casino
(Fremont) during the subject years, (4) Bruce Fraser, the
assistant general manager of Sam’s Town Hotel & Gambling Hall
1 The President recently signed into law the Taxpayer Relief
Act of 1997 (the 1997 Act), Pub. L. 105-23, 111 Stat. 788.
Sec. 970 of the 1997 Act, 111 Stat. 897, effective for taxable
years beginning after Dec. 31, 1997, amended sec. 132(e)(2) so
that the cost of a meal provided to an employee for the
convenience of the employer may be deducted in full. This
amendment parallels the Court's holding in Boyd Gaming Corp. v.
Commissioner, 106 T.C. 343, 344, 349 (1996).
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