The opinion
Hall, J., dissenting: The majority holds that an employee may deduct the cost of meals consumed on the employer’s premises but not provided by the employer, where for good business reasons the employer insists that the employees pay into a common mess fund for such meals. I find no authorization in the Code for any such deduction. The cost of an employee’s meals is normally a personal expense to the employee and except as otherwise provided in the Code (e.g., business entertainment), their cost is not deductible. Sec. 262. The majority finds warrant for the deduction in section 162(a), trade or business expenses. The opinion appears to imply that merely because an employer prescribes where, when, and in what manner an otherwise personal expense must be made, this suffices to convert it to a business expense. I have found nothing in the statute or prior case law which supports any such proposition. Employers may have views, even requirements, regarding numerous facets of an employee’s personal life (clothing, manner of transportation, etc.), without rendering deductible the otherwise personal expenditures necessitated thereby. In this case the employer, for reasons satisfactory to it, insisted that its employees, including petitioner, eat meals together. The expense was still for meals, and in my view still personal. Nor does it matter that petitioner was "on duty” while in the mess hall. One may be on duty and nonetheless incur personal expenses.
To the extent that petitioner was required to, and did, pay for meals he did not eat (for whatever reason), I would concede that the cost would be an ordinary and necessary expense of the business of being a fireman. But where the money goes to buy meals which the petitioner ate, I see no reason why the employer’s mere strictures on the time, place, and manner of dining would make the cost of such meal a business expense.
Unlike the concurring opinion, I am equally unable to find any help for petitioner in section 119. In that section Congress has chosen to permit the exclusion from income of meals furnished by the employer for the employer’s convenience. It is true that the regulations apply this exclusion even if there is an express deduction of a charge therefor from the employee’s compensation. This seems a sensible recognition of the fact that in any event there is no such thing as a free lunch. The difficulty, however, is that Congress saw fit to provide the exclusion only where the employer furnished the meals. It is not for us to apply an essentially legislative judgment that "there is no difference between this situation and the typical situation in which the employer directs the preparation of the meal.” It may or may not be that as a matter of sound legislative policy no such distinction should be drawn. But from our standpoint as judges, there is indeed a difference between the two situations. The difference is that Congress has provided an exclusion in the "typical situation” and has not provided one where the employer does not furnish the meals. Moreover, Congress has at best provided an exclusion, not a deduction. The petitioner here seeks a deduction. Had Congress intended not merely to render excludable the value of employer-furnished meals, but to render deductible the cost of purchasing employee-furnished meals, it would no doubt have provided such a deduction in Part VII of Chapter 1, correlative to section 119’s exclusion. Its failure to do so reinforces my conclusion that respondent is here entitled to decision.
Raum, J., agrees with this dissent.