The opinion
ROSENN, Circuit Judge
(concurring and dissenting).
*1299 I respectfully dissent as to all items which the majority deem deductible as “meals.”
Section 61(a) of the Internal Revenue Code of 1954 provides that “[ejxcept as otherwise provided in this subtitle, gross income means all income from whatever source derived. . . . ” 1
It is an established rule that exemptions from the broad definition of income in § 61 must be construed narrowly. Commissioner of Internal Revenue v. Jacobson, 336 U.S. 28, 49 , 69 S.Ct. 358 , 93 L.Ed. 477 (1949); United States v. Stewart, 311 U.S. 60, 71 , 61 S.Ct. 102 , 85 L.Ed. 40 (1940); Wilson v. United States, 412. F.2d 694, 696 (1st Cir. 1969); Estate of Walling v. Commissioner of Internal Revenue, 373 F.2d 190, 193 (3d Cir. 1967). It is also clear that words of the tax statute will be given their common and ordinary meaning in preference to a strained or distorted construction. Malat v. Riddell, 383 U.S. 569, 571 , 86 S.Ct. 1030 , 16 L.Ed.2d 102 (1966); Commissioner of Internal Revenue v. Brown, 380 U.S. 563, 570 , 85 S.Ct. 1162 , 14 L.Ed.2d 75 (1965); Hanover Bank v. Commissioner of Internal Revenue, 369 U.S. 672, 687 , 82 S.Ct. 1080 , 8 L.Ed.2d 187 (1962).
With these principles in mind, we must interpret § 119 of the Code, which excludes from the gross income of an employee “any meals . . . furnished to him by his employer for the convenience of the employer, but only if . the meals are furnished on the business premises of the employer.” The majority, by its construction of the term “meals” to include groceries, expands the scope of the exclusion beyond the clear language of the statute.
As noted by the majority, the § 119 exemption from income is directed at the situation where the employer desires “to have a more continuous presence of the employee at the job site and to have him within reach even when eating.” As is indicated by the statutory term “meals”, Congress had in mind situations where the employer would provide prepared meals to employees on its premises in order that the employees would be available for emergencies which might arise during the meal hour. As recognized in Tougher v. Commissioner, 51 T.C. 737 (1969), aff’d 441 F.2d 1148 (9th Cir.), cert. denied, 404 U.S. 856 , 92 S.Ct. 103 , 30 L.Ed.2d 907 (1971), the only case which has considered this issue, 2
The word “meals” connotes food that is prepared for consumption at such recognized occasions as breakfast, lunch, dinner, or supper, or the equivalent thereof. It does not ordinarily mean a bag of potatoes, a tin of coffee, a box of salt, a can of peas, 10 pounds of flour, a package of rice, a bottle of ketchup, a jar of mayonnaise, or an uncooked chicken.
51 T.C. at 745 .
*1300 Had Congress intended that groceries be excluded from income under § 119, it could easily have chosen the broader word “food” rather than the more limiting word “meals” in that section. At first blush, it would appear that this distinction is insignificant and pedantic. Pragmatically, however, the distinction is significant and real. Were the term to be expanded by interpretation to include food generally as is suggested by the majority, new horizons could be opened for granting non-taxable income to the many thousands of employees in federal, state, municipal and private institutions. Therefore, I believe Congress used the term “meals” literally.
I do not, however, rest solely upon the use of the limiting word “meals” in § 119. I believe in addition that the requirement that meals be furnished “for the convenience of the employer” strongly militates against the exemption granted to the taxpayer by the majority in this case.
The taxpayer received an unlimited draw of free groceries for himself and his family from the employer’s commissary. In addition, he could place meat orders with the manager of the commissary, who would in turn place the orders with the Institute’s butcher without charge to the taxpayer. Concededly, the taxpayer’s job required that he generally eat the meals prepared from these groceries in his house on the premises. However, he rather than the Institute, had control over the time, duration, value, and content of the meals, and he could adjust these factors to suit his own convenience. On the other hand, in the typical case where an employer serves prepared meals to employees to have them on the premises during the meal hour, these factors are entirely within the control of the employer and can be adjusted to meet the employer’s own convenience. Supplying groceries, therefore, is inherently not for the convenience of the employer, at least not to the same extent as is supplying prepared meals. See Tougher, supra, 51 T.C. at 745-746 .
The majority apparently considers these factors unimportant in light of the overriding benefit which the employer receives by having the employee on the premises while he eats meals prepared from the groceries supplied to him without charge. I believe, however, that even if the term “meals” includes groceries, the benefit to the employer from having the employee on the premises while he eats may not be taken into account in determining the convenience to the employer from supplying the groceries. The employer is supplying groceries, not prepared meals. The convenience to the employer, therefore, cannot be measured by the convenience to the employer of having the employee eat prepared meals on the premises instead of permitting him to leave during the meal hour. Rather, the convenience to the employer of supplying groceries must be measured solely by the advantage, if any, that the employer receives by having the employee on the premises during the time that he might otherwise take to purchase groceries off the premises.
The unusual situation might arise in which an employer could not even permit an employee to periodically leave the premises for a short period of time in order to purchase groceries, or in which there were simply no sources of food in an isolated area except for that supplied by the employer. In such a case, I might find that even groceries were furnished for the convenience of the employer.
The instant case, however, clearly does not present such a situation. The taxpayer testified at trial that he occasionally took trips away from the Institute for purposes such as fund raising, and he stated that he might typically attend a convention which lasted up to a week. There is no indication whatever in the record that the taxpayer was literally confined to the employer’s premises every minute of every day. Furthermore, the Institute was in the center of town, convenient to several grocery stores, and it would not have taken inordinately *1301 long to purchase a week’s supply of food. In any event, it was stipulated at trial that the taxpayer’s duties would not have been affected if his wife went to a grocery store to purchase food, instead of the family receiving free food delivered from the Institute commissary.
Under these circumstances, I do not believe that the groceries at issue in this case were furnished for the convenience of the employer.
I do not consider persuasive the majority’s reliance upon Treas.Reg. § 1.-119-1 (a), which states in part that
If the employee is required to occupy living quarters on the business premises of his employer as a condition of his employment . . ., the exclusion applies to the value of any meal furnished without charge to the employee on such premises.
My first objection to the majority’s reliance upon this provision of the regulation is that even if the statutory term “meals” is construed to include groceries, the regulations issued pursuant to that section clearly contemplated that “meals” only included prepared meals. 3 I do not believe that it is proper to assume that whenever the term “meals” occurs in the regulations, the term should be broadly construed as “food.” The majority’s reliance upon the present regulations would require that groceries be deemed supplied for the convenience of the employer in every situation where prepared meals are presently deemed to be for the convenience of the employer.
Second, even if the majority is correct in relying on the present regulations, I believe that when the quoted provision is considered in context it merely means that although normally “meals” must be provided during the working hours of an employee, an exception to this rule is made for employees who live in employer-provided lodging. 4 The regulation thus indicates that if groceries consumed by the taxpayer during his normal working hours would be deemed to be supplied for the convenience of the employer, the same would be true of groceries consumed during other hours of the day or other days of the week. I do not believe the provision helps, however, in determining whether any of the *1302 groceries here at issue were provided for the convenience of the employer.
For these reasons I would reverse the judgment of the district court and remand for a determination as to which household items (such as soap) are deductible as “lodging.”
. Treas.Reg. § 1.61-2, Compensation for services, including fees, commissions, and similar items, provides in part:
(d) Compensation paid other than in cash * * * * (3) Meals and living quarters. The value of living quarters or meals which an employee receives in addition to his salary constitutes gross income unless they are furnished for the convenience of the employer and meet the conditions specified in section 119 and the regulations thereunder.
. Tougher was decided adversely to the taxpayer. The majority in this case notes that “the facts in Tougher , involving a small, remote island in the western Pacific Ocean, are far different from the facts of the instant case.” I do not understand why the particular facts of a case determine whether the term “meals” is to be construed to include groceries. In any event, the facts of the instant case present a far less favorable case for the taxpayer than do the facts in Tougher . Unlike the situation in Tougher , the ready availability of supermarkets in the instant case would make it possible for the employer to require that the taxpayer purchase his own groceries off the premises. There is thus less reason in the instant case than in Tougher to hold that the employer furnished groceries for its own convenience, rather than for the benefit of the employee taxpayer.
. Treas.Reg. § 1.119-1 (d) contains examples of the application of Section 119. Of the relevant examples, some refer to the arguably ambiguous term “meals”, while the rest refer specifically to meals furnished in a cafeteria.
Particularly instructive is Example (7) which states:
A construction worker is employed at a construction project at a remote job site in Alaska. Due to the inaccessibility of facilities for the employees who are working at the job site to obtain food and lodging and the prevailing weather conditions, the employer is required to furnish meals and lodging to the employee at the camp site in order to carry on the construction project. The employee is required to pay $40 a week for the meals and lodging. The weekly charge of $40 is not, as such, part of the compensation includible in the gross income of the employee, and under paragraphs (a) and (b) of this section the value of the meals and lodging is excludable from his gross income. [Emphasis supplied.]
The example indicates that meals are furnished for the convenience of the employer in this situation, even though the employees are otherwise unable to supply their own food. This indicates that a distinction is indeed being made between the words “food” and “meals”, and that “meals” is intended to be restricted to prepared meals.
. Treas.Reg. § 1.119-1 (a) (2) (i) provides in part:
Generally, meals furnished before or after the working hours of the employee will not be regarded as furnished for the convenience of the employer, but see subdivision (ii) (d) and (f) of this subparagraph [referring to meals furnished immediately before or after the employee’s working hours] for some exceptions to this general rule. Meals furnished on nonworking days do not qualify for the exclusion under section 119. If the employee is required to occupy living quarters on the business premises of his employer as a condition of his employment . . . the exclusion applies to the value of any meal furnished without charge to the employee on such premises.