Monthly Archives: March 2019

March 8, 2019

Proposed Senate Bill 188 Would Create Paid Family Leave System in Colorado

By Rebecca Hudson

Rebecca Hudson

On March 7, democratic lawmakers introduced Senate Bill 188, which would provide partial wage replacement for Colorado workers by mandating a state family and medical leave benefit. Under the legislation, Coloradans would be able to take up to 12 weeks of paid leave to care for a newborn, a family member with a serious health condition, or who is unable to work due to the individual’s own serious health condition or on account of being the victim of domestic violence or abuse.

Under the new law, each employee and employer in Colorado would pay one-half the cost of a premium based upon a percentage of the employee’s annual wages. The premiums would be deposited into a family and medical leave insurance fund from which leave benefits would be paid. The state would administer the program similar to unemployment insurance. The program would be mandatory for all full- and part-time workers of any size business.

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March 6, 2019

IRS Attempts to Tighten Rules for Business Meal Exclusions

By William Colgin and John Ludlum

William Colgin

Internal Revenue Code Section 119 (Code Section 119) allows employees to exclude from income the value of any meals furnished by or on behalf of their employer if the meals are furnished on the employer’s business premises for the convenience of the employer. Whether meals are furnished for the convenience of the employer is one of fact to be determined by analysis of all the facts and circumstances in each case. Treasury Regulation 1.119-1 provides that meals furnished by an employer to the employee will be regarded as furnished for the convenience of the employer if such meals are furnished for a substantial non-compensatory business reason of the employer.

John Ludlum

Many companies provide meals to their employees, but the rules for excluding this benefit from income are complex and have detailed administration requirements. The taxpayer bears the burden of proving entitlement to such an exclusion. An employer who is claiming exclusion from income and wages for meals furnished to employees for the convenience of the employer must provide substantiation if requested concerning the business reasons. A recent IRS Technical Advice Memorandum issued on February 15, 2019, (“TAM 201903017”) underlines how difficult it can be to prove to the IRS administratively a substantial non-compensatory business reason and provides guidance for employers looking to claim the exclusion.

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