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None of these arguments persuades us that the relevant
employees may exclude their meals under section 119. These
contentions are not substantial noncompensatory business reasons
within the meaning of the regulations. Petitioners' contentions
about their security concerns, their employees' uniforms, and the
timing of the graveyard shift fail to go to the heart of the
convenience of the employer test; namely, that the "employee must
accept * * * [the] meals * * * in order properly to perform his
duties".15 Commissioner v. Kowalski, 434 U.S. at 93 (quoting S.
Rept. 83-1622, at 190 (1954)). Section 119 requires a closer and
better documented connection between the necessities of the
employer's business and the furnishing of free meals.
We now turn our attention to whether each of substantially
all of petitioners' employees receive meals excludable from gross
income under section 119. Respondent asserts that the term
"substantially all" means that at least 90 percent of the
employees must be able to exclude their meals under section 119.
Petitioners counter that the term requires a lower percent.
15 With respect to the uniforms and the graveyard shift, we
have additional concerns. Petitioners allow their employees to
travel to and from work in uniform, and employees have worn their
uniforms while dining in the restaurants of petitioners'
competitors. Moreover, petitioners provide their employees with
dressing rooms and storage for safeguarding their nonbusiness
attire, and the uniforms worn by most of the employees do not
appear to be such that the employees cannot quickly change into
nonbusiness attire. With respect to the graveyard shift, we are
unable to determine which employees work this shift. Thus, even
if we were to assume arguendo that these late night workers were
entitled to exclude their meals because of the time of their
shift, an assumption which we reject, we would not be able to
ascertain which employees fall within this category.
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