Free Lunch At Tech Firms May Be Taxed By IRS

SAN FRANCISCO (CBS SF) - Silicon Valley tech companies have treated employees to free meals and snacks for years, but now the IRS reportedly wants a slice of the pie.

Google, Facebook and Yahoo are among the companies known for catering to workers. Now, the Silicon Valley Business Journal says the IRS is doing more than exploring the idea of taxing these meals, they're actually working on a proposal.

At issue is that the tax code exempts free lunch only if it's offered for the convenience of the employer, not the employee. If it benefits the employee, it's considered income.

"If these people were compensated $100,000 a year, this is an extra 6-7-percet of their income," said tax attorney Matthew Whatley.

While the agency won't officially comment, "regulations regarding employer provided meals" is publicly listed as priority for the next year.