With their approval ratings about as high as Adolf Hitler, you would think letting the public know on Tax Day that you’re so greedy and petty that taxing meals provided by employers would be your last priority. Think again.
In competitive job markets like Silicon Valley, companies are doing everything they can to entice the best and brightest — offering freebies that have become the stuff of legend.
Employee perks like free food at lavish cafeterias, laundry and even yoga are not unheard of.
But the taxman could soon crack down.
The IRS reportedly is looking at these perks and seeing if these companies need to start paying up for the free stuff they offer employees.
David Gamage, a tax expert and professor at the University of California, Berkeley, said it would really boil down to who benefits from these perks.
“To what extent is this intended as a perk, a form of compensation, for the benefit of the employee, or to what extent is this just another way the employer gets the employee to work harder and longer and do things for the benefit of the employer?” he said.
If it’s the latter, then it’s harder for the IRS to tax it.
The Wall Street Journal first reported that the agency is considering whether the freebies like food, shuttles, haircuts and more are really fringe benefits on which workers should be taxed. Some tax experts see the perks as skirting the edges of the law, and warn the companies may be violating it — but also think it would be a very aggressive move for the already-busy IRS to pursue this when they have much more on their plate.
The IRS has basically become an arm of the Democratic Party, so going after people sympathetic to Democrats doesn’t make much sense. But the unquenchable thirst for more of our money clearly clouds their judgment.
Silicon Valley-based Clari, which has several dozen staffers developing cloud technology for smart phones, is one such company that offers free food — to workers who rarely leave their desks.
CEO and co-founder Andy Byrne argues that providing good, healthy food is a necessity, not a luxury, and that everyone benefits.
“They win [because] they’re happier, our customers win [because] they get a higher quality product and then our shareholders win because they see our momentum in the market. For a small company like Clari, the idea of taxing the perks would have a devastating effect, not only for the employers who would have to cancel the perk, but also for the workers who would have lower productivity,” he said.
IRS officials declined to comment for this article.
They’re busy hiding Lois Lerner’s emails.