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de minimis fringe benefit if the meals meet the requirements of
section 132(e)(2),5 which, in turn, requires that the meals meet
the five-prong test (the Boyd test) set forth by the Court in
Boyd Gaming Corp. v. Commissioner, 106 T.C. at 348. The outcome
turns on whether petitioners furnished meals to each of
substantially all of their employees for a substantial
noncompensatory business reason within the meaning of section 119
and the regulations thereunder.
We set forth our analysis as follows. First, we analyze the
Boyd test and the general principles of law that relate thereto.
Second, we analyze petitioners' reasons for furnishing the meals
4(...continued)
any expense if--
* * * * * * *
(B) in the case of an expense for food
or beverages, such expense is excludable from
the gross income of the recipient under
section 132 by reason of subsection (e)
thereof (relating to de minimis fringes),
5 Sec. 132(e)(2) provides:
(2) Treatment of certain eating facilities.--The
operation by an employer of any eating facility for
employees shall be treated as a de minimis fringe if--
(A) such facility is located on or near
the business premises of the employer, and
(B) revenue derived from such facility
normally equals or exceeds the direct
operating costs of such facility. * * *
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