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sation. Sec. 1.61-2(d)(1), Income Tax Regs. Such property or
other services may take the form of fringe benefits, which
include, inter alia, employer-provided automobiles. Sec. 1.61-
21(a)(1), Income Tax Regs. In the case of compensation paid in
the form of a fringe benefit, an employee31 must include in gross
income the amount by which the fair market value of the fringe
benefit exceeds the sum of the amount, if any, paid for the
benefit and the amount, if any, specifically excluded from gross
income by, inter alia, section 132. Sec. 1.61-21(b)(1), Income
Tax Regs.
Petitioners’ Position With Respect to Mr. Whitehead’s Use of
Certain Burien Nissan Automobiles During the Years at Issue
Petitioners contend that, in calculating the value of Mr.
Whitehead’s use of certain Burien Nissan automobiles during the
31The person to whom a fringe benefit is taxable may not be
an employee of the provider of the fringe benefit, but may be,
for example, a director or an independent contractor. Sec. 1.61-
21(a)(4)(ii), Income Tax Regs. The regulations define the term
“employee” to include any person performing services in connec-
tion with which a fringe benefit is furnished, id., and define
the term “employer” to include any provider of a fringe benefit
in connection with payment for the performance of services, sec.
1.61-21(a)(5), Income Tax Regs.
In addition, the person to whom a fringe benefit is taxable
is the person performing the services in connection with which
the fringe benefit is furnished, regardless of whether that
person is the person who actually receives the fringe benefit.
Sec. 1.61-21(a)(4)(i), Income Tax Regs. For example, if an
employer provides an automobile to an employee’s spouse in
connection with the performance of services by the employee, that
fringe benefit is taxable to the employee. Id. The automobile
is considered to be available to the employee, and the use by the
employee’s spouse is considered to be use by the employee. Id.
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