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I was foolish and never considered that my client would possibly report my meals as my "income". I would like to consider it a gift, but my client personally dispises me and I now expect to have my lunches reported against me as income.

Do I have to report $5 a day for over a year. I would NEVER pay $5 for lunch when I make less than minumum wage. Can I report only what I "would of payed" for lunch, like $1 a day?

Additional details

I don't recieve 1099's/pay stubs so I have no way of confirming what is reported as income/expenses, and either way I would expect the income reported to be altered/"amended" as retribution for quiting if I find a better job.

Additional Research

IRS publication 15-B seems to indicate that employees don't have to consider meals as income under section 2: "Fringe Benefit Exclusion Rules", however I am not an employee. Yet in a general overview at top it says

If the recipient of a taxable fringe benefit is not your employee, the benefit is not subject to employment taxes.

But this is with respect to the employer's/client's responsibility to withold taxes...

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    BTW: You must have received either 1099 or W2, that's the law. – littleadv Jun 17 '15 at 5:58
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    a law that aparently isn't enforced isn't much of a law. – DSWFB Jun 17 '15 at 6:06
  • I think you need to provide some more information about these meals. Were they furnished at your workplace, or did you buy your lunch and get reimbursed, or what? – BrenBarn Jun 17 '15 at 6:57
  • @SFDKT what did you do about it? Whom did you complain to? Did you file a complaint with your State tax agency or labor laws enforcement, or the IRS? Who and how do you expect to enforce this if you're not telling anyone? – littleadv Jun 17 '15 at 7:34
  • @BrenBarn I clarified what I was looking for by replying to your other comment on littleadv's answer. – DSWFB Jun 17 '15 at 7:35
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Your lunches at work are most definitely considered as income, and are in no way a gift. Personal relationships have nothing to do with that, that's the tax law.

You would need to report the $5 per day the client spent on your meals, yes. If you don't want to do it in the future, make sure the client knows that you're not eating the meals and doesn't charge you, bring your own food to work.

If the client refuses and says you must eat at work and cannot bring your own food - then, and only then, the meals will not be considered income.

Can I report only what I "would of payed" for lunch, like $1 a day?

Of course not, and no-one would believe you even if you could.

  • Then why should I believe my client if he claims 10 dollars a day, this is unbelievably unfair! I feel terribly cheated and abused! – DSWFB Jun 17 '15 at 6:16
  • 15-B>"General Valuation Rule">"Fair market value" is the section that covers what the price of the lunch is... and it is not up to my client or me to decide what is "fair", however that still leaves the possibility of my client claiming I have recieved the "fair market value" of "grade A++ steaks" for lunch. – DSWFB Jun 17 '15 at 6:31
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    I think this answer is a bit premature. Publication 15-B lists a number of situations under which meals might not be taxable. The question is too vague to determine whether the meals fall under such an exclusion. – BrenBarn Jun 17 '15 at 6:58
  • @BrenBarn yes I know it's vague, I just wanted to know if as an independent contractor I can recieve the same privleges as employees, and if not how I could defend myself against fraud. I now believe I do recieve the same privledge given IRS PUB 5137 sec. 22, and thus I no longer am concerned about "grade AAA steak" fraud in this regard. :-) – DSWFB Jun 17 '15 at 7:28
  • @BrenBarn it is not vague, it is a very common situation. Very rarely the meals are for the convenience of the employer. – littleadv Jun 17 '15 at 7:39
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IRS Publication 5137 section 22

22 Fringe Benefits for Independent Contractors

Generally, the taxability of fringe benefits or reimbursements paid to independent contractors is similar to that for employees. However, different withholding and reporting requirements apply to these workers. Reg. §1.132-1(b)(2)(iv)

Nothing is mentioned regarding meals in the following paragraphs and thus independent contractors are considered the same as employees in regard to meals.

  • Meals are taxable to employees, unless if it is for the convenience of the employer: irs.gov/publications/p15b/… That is exactly what I meant for the case where the employer requires you to have the meals. – littleadv Jun 17 '15 at 7:38

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