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The IRS says companies must place a fair market value on free parking they provide, and must report as income any value of free parking in excess of $255/month.

by zaroth 9y ago

The IRS says companies must place a fair market value on free parking they provide, and must report as income any value of free parking in excess of $255/month. Compliance with this reg is likely minimal. It seems to me if I have to drive to a specific location to perform a job-task, the expense of getting there and parking there is a deductible business expense. This is true as long as you are not regularly commuting to a place of business. Once you start regularly commuting, the cost of the commute is no longer a deductible business expense. And if you are being given a place to park worth more than ~$10/day you're supposed to pay full load of taxes on that "income". So, if for example, you regularly work from home, you can deduct the cost of going into the office. That's a huge subsidy for working from home at least 50% of the time which this report totally ignores. To claim that not taxing as income the first $10/day in parking value provided as a fringe benefit is a $7b tax subsidy seems a bit of a stretch. The company also likely provides air conditioning in the office, do we tax that as income too? To say nothing of food catering, onsite gym, etc. I read the actual report linked in the article and IMO it comes off as somewhere between "progressive money-grab" to "bat-shit crazy." The reality is the IRS has a long-standing "don't ask don't tell" policy around all kinds of benefits that companies provide employees which are "technically gross income" but in practice are never actuallly counted as such. A common example is the value of frequent flier miles. Here's a paper on the subject: http://scholarship.law.duke.edu/cgi/viewcontent.cgi?article=3373&context=dlj http://scholarship.law.duke.edu/cgi/viewcontent.cgi?article=... Referenced in that is another paper called "Defining Income" which seems to be the definitive paper on this topic? https://poseidon01.ssrn.com/delivery.php?ID=037082122068089013077101079007096005123025053058021063112099086101084008024073089028096120057028116036040111020086004101004028039017049060086094125099080064098106032012081095073085089118110123007010084117075092084116118121093030081112112079116117103&EXT=pdf https://poseidon01.ssrn.com/delivery.php?ID=0370821220680890...

zaroth 9y ago
That last link is a gem -- here's a great quote from it; "Gross income is all accessions to wealth, clearly realized, over which the taxpayer has dominion unless excluded by statute, or by the IRS's never having attempted to tax them, or by the IRS's having announced an administratively created exclusion pursuant to no specific authority whatsoever." The paper explains the historical definition of income as meaning, "the realized product of labor or capital." That definition was challenged before the Supreme Court back in 1955 Glenshaw Glass when the IRS claimed punitive damages were taxable as income. Before Glenshaw, punitive damages were considered a windfall, and as neither a product of labor or capital, not income and therefore not taxable. Some specific examples of accessions to wealth, clearly realized, which are not taxed by the IRS for no reason other than administrative fiat are; child support payments, welfare payments such as TANF, and Medicaid. I supposed you could add "parking at the office" to that list. Another great example in that paper -- the cost of traveling to a job interview in another state. The reimbursement of that cost is clearly income under statute, but not taxed. Thankfully so! Are fish income when you catch them from the sea? Are minerals income when you pull them from the ground? Are Bitcoin income when you mine them? No, No, and YES!
- zaroth 9y ago
  Still reading that last paper -- just so damn amusing; "Two final examples suffice to show the array of situations in which the administrative application of the positive definition of income seems confused. The first involves the iconic American game of baseball. When contemporary players began to threaten long established home run records, it was clear that any ball that broke such a record would become a collector's item worth substantial amounts of money. When the records began to be broken and a fan caught the record-breaking ball, the tax controversy erupted. Practitioners, academics, and former IRS Commissioners all agreed that catching the ball, like finding old currency in a used piano, which was held to be income in a case known to virtually every student of taxation, resulted in the realization of income. But the public and Congressional outcry at such a prospect was fierce. How could the joy of catching the record breaking-ball be marred by the prospect of the rapacious IRS pursuing the fan for a cut of the food fortune? Legislation to ensure non-taxation was introduced. One IRS Commissioner, not a lawyer, dissembled. Years later, the Chief Counsel of the IRS, not only a lawyer but a tax lawyer, reportedly covered his head with his hands and captured the difficult position the agency was in when he responded to the question of whether the fan who caught and kept the ball had income by saying, "Please don't ask me that!"
notyourday 9y ago
Want to have as if by magic HN flip on this topic? Here: coffee/soda/lunch/dinner that companies provide to its workers are income and workers should pay taxes on it. It should be presumed that the value of a "coffee" benefit is the price of similar coffee at Starbucks, "Soda" benefit a price of similar soda at a ball park, etc.

by zaroth 9y ago

zaroth 9y ago

That last link is a gem -- here's a great quote from it; "Gross income is all accessions to wealth, clearly realized, over which the taxpayer has dominion unless excluded by statute, or by the IRS's never having attempted to tax them, or by the IRS's having announced an administratively created exclusion pursuant to no specific authority whatsoever." The paper explains the historical definition of income as meaning, "the realized product of labor or capital." That definition was challenged before the Supreme Court back in 1955 Glenshaw Glass when the IRS claimed punitive damages were taxable as income. Before Glenshaw, punitive damages were considered a windfall, and as neither a product of labor or capital, not income and therefore not taxable. Some specific examples of accessions to wealth, clearly realized, which are not taxed by the IRS for no reason other than administrative fiat are; child support payments, welfare payments such as TANF, and Medicaid. I supposed you could add "parking at the office" to that list. Another great example in that paper -- the cost of traveling to a job interview in another state. The reimbursement of that cost is clearly income under statute, but not taxed. Thankfully so! Are fish income when you catch them from the sea? Are minerals income when you pull them from the ground? Are Bitcoin income when you mine them? No, No, and YES!

zaroth 9y ago
Still reading that last paper -- just so damn amusing; "Two final examples suffice to show the array of situations in which the administrative application of the positive definition of income seems confused. The first involves the iconic American game of baseball. When contemporary players began to threaten long established home run records, it was clear that any ball that broke such a record would become a collector's item worth substantial amounts of money. When the records began to be broken and a fan caught the record-breaking ball, the tax controversy erupted. Practitioners, academics, and former IRS Commissioners all agreed that catching the ball, like finding old currency in a used piano, which was held to be income in a case known to virtually every student of taxation, resulted in the realization of income. But the public and Congressional outcry at such a prospect was fierce. How could the joy of catching the record breaking-ball be marred by the prospect of the rapacious IRS pursuing the fan for a cut of the food fortune? Legislation to ensure non-taxation was introduced. One IRS Commissioner, not a lawyer, dissembled. Years later, the Chief Counsel of the IRS, not only a lawyer but a tax lawyer, reportedly covered his head with his hands and captured the difficult position the agency was in when he responded to the question of whether the fan who caught and kept the ball had income by saying, "Please don't ask me that!"

notyourday 9y ago

Want to have as if by magic HN flip on this topic? Here: coffee/soda/lunch/dinner that companies provide to its workers are income and workers should pay taxes on it. It should be presumed that the value of a "coffee" benefit is the price of similar coffee at Starbucks, "Soda" benefit a price of similar soda at a ball park, etc.