One IRS definition of meals includes a specific sugary, caffeinated exemption for “coffee, doughnuts or soft drinks.”
Beyond that, the lawyers may have to fight it out all the way to court, one baked good at a time.
For example, Dyson said she’s had the IRS tell her that a bagel is more like a meal than a snack.
“The IRS’s view of ‘meal’ may not be the classic example of the food chart that you and I are thinking of,” she said. “They’re going to interpret a meal liberally.”
If the IRS declares meals as taxable, companies have a few options, including selling the meals at cost to employees and giving them taxable raises to make them whole, said Sam Brunson, a tax law professor at Loyola University in Chicago. Zelenak said the meals most at risk of a changed tax treatment are breakfasts and dinners at either end of the workday. The midday meal at a secluded tech campus is on more solid legal ground, he said, though it could be vulnerable.
“The other thing I’d like to see them address is the bag lunch question,” he said. “Why can’t people just bring a bag lunch?”