Benaglia v. Commissioner
United States Board of Tax Appeals
36 B.T.A. 838 (1937)
Arthur Benaglia (plaintiff) managed resort hotels and, because his job required him to be on call at all times for guests, his employer required him to live and eat at the hotel as a condition of employment, a requirement written into his contract. Neither Benaglia nor his employer ever treated the value of his lodging and meals as part of his compensation. The Commissioner of Internal Revenue (defendant) nonetheless determined that Benaglia should have reported $7,845 in gross income representing the fair market value of that lodging and food, and Benaglia petitioned for review.
Whether the fair market value of lodging and meals an employer provides solely for its own business benefit counts as gross income to the employee for federal tax purposes.