Employees of several tech firms in California may be learning that there is no such things as a free lunch.

The Internal Revenue Service is looking into the possibility of taxing meals that employers provide to workers.

Employees of companies such as Google, Yahoo, and Facebook enjoy meals courtesy of their employers thanks to a rule that permits employers to provide catered meals to workers for free if the meals benefit the employers.  The meals are tax exempt for the workers, the theory being that the company benefits from the worker remaining at work instead of leaving the building for lunch.

Several financial services and law firms, particularly in places like New York City, also provide meals for employees and would be affected if the rule changes.

The IRS is now taking issue with the rule, saying that the meals benefit employees and should, therefore, be taxed.

 

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