- 10 -
employee must accept the lodging as a condition of employment,
(2) the lodging must be furnished for the convenience of the
employer, and (3) the lodging must be on the business premises of
the employer. Sec. 1.119-1(b), Income Tax Regs. The exception
to the general rule will not apply, and the value of the lodging
will be included in gross income if the employee fails to satisfy
any of these three conditions. Dole v. Commissioner, 43 T.C.
697, 705 (1965), affd. per curiam 351 F.2d 308 (1st Cir. 1965);
see Commissioner v. Schleier, 515 U.S. 323, 328 (1995) (holding
that exclusions from gross income are construed narrowly).
There is no dispute in this case that a condition of
petitioner’s employment with Raytheon at Pine Gap was
petitioner’s acceptance of assigned housing. There is likewise
no dispute that such lodging was furnished for the convenience of
the employer. At issue is whether the lodging furnished to
petitioner in Alice Springs was on the business premises of the
employer.
Section 1.119-1(c)(1), Income Tax Regs., defines the term
“business premises of the employer” as the place of employment of
the employee. The Court has construed the phrase “on the
business premises” to mean either: (1) Living quarters that
constitute an integral part of the business property, or (2)
premises on which the employer carries on some of its business
activities. See Dole v. Commissioner, supra at 707 (holding that
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: November 10, 2007