Mercy Hospital maintains a cafeteria on its premises. In addition, it rents space to MacDougal’s, a privately owned sandwich shop. The cafeteria closes at 8:00 p.m. MacDougal’s is open 24 hours. Mercy provides meal vouchers to each of its 240 medical employees to enable them to remain on call in case of emergency. The vouchers are redeemable either at the cafeteria or at MacDougal’s. Although the employees are not required to remain on or near the premises during meal hours, they generally do.
Elizabeth Fegali, Mercy’s Chief Administrator, has approached you with the following question:
Is the value of the meal voucher includible in the employees’ gross income?
Use the following in tax research process in answering your question:
Determine the facts.
Identify the issues.
Locate the applicable authorities.
Evaluate the authorities.
Analyze the facts.
Communicate the conclusions and recommendations.
Use a Tax Research Memorandum to document your work:
Facts: State only the facts that are relevant to the Issue(s) and necessary for the Analysis.
Issues: Identify the issue(s) raised by the facts. Be specific.
Applicable Law: Discuss those legal principles that both strengthen and weaken a client’s case.
Analysis (Discussion): The Analysis should (a) apply Applicable Law to the Facts and (b) address the Issue(s). In this section, every proposition should be supported by either authority, logic, or plausible assumptions.
Conclusion: The conclusion should (a) logically flow from the Analysis and (b) address the Issue(s).