Line Of Business Limitations
Categories: Company Management
The IRS’s “line of business limitations” rules basically say that we have to pay taxes on fringe benefits we receive at work, even if that money comes from a division in the company that we don’t work for.
Allow us to explain.
Let’s say we work for a funeral home doing makeup and hair for the recently dearly departed. It’s a great gig, and it comes with a serious perk: the company that owns the funeral home also owns the taco shop next door—so convenient—and twice a month, we get free tacos. According to the IRS, we should be paying taxes on the amount we didn’t pay for those free tacos, because in their eyes, that’s income. We don’t work for the business’s taco line, we work for their funeral home line. Therefore, those tacos are a fringe benefit subject to line of business limitations, and we need to report them on our taxes.
We don't recommend you ask what's in the burritos.