The IRS Wants to Tax Google and Facebook Employees for Their Free Gourmet Lunches

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There is such a thing as a free Facebook lunch. Photo: Robyn Beck/AFP/Getty Images

When it comes to Silicon Valley, those fabled, vast, all-you-can-eat cafeterias and magical-looking dining areas helmed by in-house chefs aren't really so much of a job perk these days so much as they are "kind of expected." So you can probably imagine the Valley's outrage at the news that the tax man wants all of those fruit baskets, whey shakes, millet pasta buffets, and then some figured into employees' yearly federal withholdings, and may even demand back taxes "that can amount to 30% of the meals' fair-market value," according to lawyers.

The Wall Street Journal notes that the development comes from the IRS and the Treasury Department listing "employer-provided meals" as one of their top tax priorities for the next fiscal year. Probably speaking for most, a tech employee at Weebly tells Fortune the plan is a slippery slope that "doesn't make sense" because, next thing you know, "you start taxing free coffee as well." Still, however entitled six-figure-earning twentysomthings can sound when their supply of unlimited chia smoothies gets threatened, the issue apparently isn't all that legally clear cut, either. The IRS says free food qualifies as a fringe benefit, like a company car, while start-ups argue it's exempt if "reasonable lunch breaks aren't feasible," a case certainly helped by those labyrinthine campuses (the Googleplex's vastness requires 29 restaurants). Anyway, Silicon Valley legendarily knows how to lawyer up, so both sides seem to agree on the inevitability of this being arbitrated in over several days in court, lunch breaks and all.

[WSJ, Fortune]