- 53 - revenue derived from the facility equals or exceeds the direct operating costs of the facility (the revenue/operating cost test). Boyd Gaming Corp. v. Commissioner, 106 T.C. at 348; see also sec. 132(e)(2); sec. 1.132-7(a), Income Tax Regs. The parties focus mainly on the revenue/operating cost test. So do we. For purposes of the revenue/operating cost test, an employer may disregard the cost and revenue for each employee meal that the employer determines reasonably is excludable from the recipient's gross income under section 119. Sec. 1.132-7(a)(2), Income Tax Regs.6 Section 119(a) excludes from the recipient's gross income "the value of any meals * * * furnished to him, his spouse, or any of his dependents by or on behalf of his employer for the convenience of the employer, but only if * * * the meals are furnished on the business premises of the employer". Sec. 119(a). The parties agree that section 119 allows some, but not all, of petitioners' employees to exclude from gross income the value of meals received from their employers. The parties dispute whether section 119 allows each of substantially all of the employees to exclude the value of the meals from gross income. 6 Sec. 1.132-7(a)(2), Income Tax Regs., provides: If an employer can reasonably determine the number of meals that are excludable from income by the recipient employees under section 119, the employer may, in determining whether the * * * [revenue/operating cost test] is satisfied, disregard all costs and revenues attributable to such meals provided to such employees.Page: Previous 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 Next
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