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Reimbursing Lunch Expenses

The Tax Court clarifies the rules.

Dugan v. Commissioner, T.C. Memo. 1998-373

Background. It is common for ministers and church staff members to go out to lunch together on work days. In many churches, it is a weekly ritual. Since church matters are discussed, many church treasurers assume that the cost of the lunch can be reimbursed by the church under an accountable arrangement. As a result, the cost of such lunches is not added to the employees' taxable compensation for tax reporting purposes. But is this the correct way to handle lunch expenses? If your church has an accountable reimbursement arrangement, can you reimburse lunch expenses? If so, under what circumstances? Always? Whenever church matters are discussed? A recent Tax Court decision addresses this important question. While the case involved a medical technician, it is equally relevant to church staff.

A Tax Court ruling. A medical technician and a physician ...

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  • May 1, 2000

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