
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC119]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                        Subtitle A--Income Taxes
 
                  CHAPTER 1--NORMAL TAXES AND SURTAXES
 
               Subchapter B--Computation of Taxable Income
 
         PART III--ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME
 
Sec. 119. Meals or lodging furnished for the convenience of the 
        employer
        

(a) Meals and lodging furnished to employee, his spouse, and his 
        dependents, pursuant to employment

    There shall be excluded from gross income of an employee the value 
of any meals or lodging furnished to him, his spouse, or any of his 
dependents by or on behalf of his employer for the convenience of the 
employer, but only if--
        (1) in the case of meals, the meals are furnished on the 
    business premises of the employer, or
        (2) in the case of lodging, the employee is required to accept 
    such lodging on the business premises of his employer as a condition 
    of his employment.

(b) Special rules

    For purposes of subsection (a)--

     (1) Provisions of employment contract or State statute not 
                             to be determinative

        In determining whether meals or lodging are furnished for the 
    convenience of the employer, the provisions of an employment 
    contract or of a State statute fixing terms of employment shall not 
    be determinative of whether the meals or lodging are intended as 
    compensation.

     (2) Certain factors not taken into account with respect to 
                                    meals

        In determining whether meals are furnished for the convenience 
    of the employer, the fact that a charge is made for such meals, and 
    the fact that the employee may accept or decline such meals, shall 
    not be taken into account.

                 (3) Certain fixed charges for meals

        (A) In general

            If--
                (i) an employee is required to pay on a periodic basis a 
            fixed charge for his meals, and
                (ii) such meals are furnished by the employer for the 
            convenience of the employer,

        there shall be excluded from the employee's gross income an 
        amount equal to such fixed charge.

        (B) Application of subparagraph (A)

            Subparagraph (A) shall apply--
                (i) whether the employee pays the fixed charge out of 
            his stated compensation or out of his own funds, and
                (ii) only if the employee is required to make the 
            payment whether he accepts or declines the meals.

    (4) Meals furnished to employees on business premises where 
              meals of most employees are otherwise excludable

        All meals furnished on the business premises of an employer to 
    such employer's employees shall be treated as furnished for the 
    convenience of the employer if, without regard to this paragraph, 
    more than half of the employees to whom such meals are furnished on 
    such premises are furnished such meals for the convenience of the 
    employer.

(c) Employees living in certain camps

                           (1) In general

        In the case of an individual who is furnished lodging in a camp 
    located in a foreign country by or on behalf of his employer, such 
    camp shall be considered to be part of the business premises of the 
    employer.

                              (2) Camp

        For purposes of this section, a camp constitutes lodging which 
    is--
            (A) provided by or on behalf of the employer for the 
        convenience of the employer because the place at which such 
        individual renders services is in a remote area where 
        satisfactory housing is not available on the open market,
            (B) located, as near as practicable, in the vicinity of the 
        place at which such individual renders services, and
            (C) furnished in a common area (or enclave) which is not 
        available to the public and which normally accommodates 10 or 
        more employees.

(d) Lodging furnished by certain educational institutions to employees

                           (1) In general

        In the case of an employee of an educational institution, gross 
    income shall not include the value of qualified campus lodging 
    furnished to such employee during the taxable year.

              (2) Exception in cases of inadequate rent

        Paragraph (1) shall not apply to the extent of the excess of--
            (A) the lesser of--
                (i) 5 percent of the appraised value of the qualified 
            campus lodging, or
                (ii) the average of the rentals paid by individuals 
            (other than employees or students of the educational 
            institution) during such calendar year for lodging provided 
            by the educational institution which is comparable to the 
            qualified campus lodging provided to the employee, over

            (B) the rent paid by the employee for the qualified campus 
        lodging during such calendar year.

    The appraised value under subparagraph (A)(i) shall be determined as 
    of the close of the calendar year in which the taxable year begins, 
    or, in the case of a rental period not greater than 1 year, at any 
    time during the calendar year in which such period begins.

                    (3) Qualified campus lodging

        For purposes of this subsection, the term ``qualified campus 
    lodging'' means lodging to which subsection (a) does not apply and 
    which is--
            (A) located on, or in the proximity of, a campus of the 
        educational institution, and
            (B) furnished to the employee, his spouse, and any of his 
        dependents by or on behalf of such institution for use as a 
        residence.

                  (4) Educational institution, etc.

        For purposes of this subsection--

        (A) In general

            The term ``educational institution'' means--
                (i) an institution described in section 170(b)(1)(A)(ii) 
            (or an entity organized under State law and composed of 
            public institutions so described), or
                (ii) an academic health center.

        (B) Academic health center

            For purposes of subparagraph (A), the term ``academic health 
        center'' means an entity--
                (i) which is described in section 170(b)(1)(A)(iii),
                (ii) which receives (during the calendar year in which 
            the taxable year of the taxpayer begins) payments under 
            subsection (d)(5)(B) or (h) of section 1886 of the Social 
            Security Act (relating to graduate medical education), and
                (iii) which has as one of its principal purposes or 
            functions the providing and teaching of basic and clinical 
            medical science and research with the entity's own faculty.

(Aug. 16, 1954, ch. 736, 68A Stat. 39; Pub. L. 95-427, Sec. 4(a), Oct. 
7, 1978, 92 Stat. 997; Pub. L. 95-615, title II, Sec. 205, Nov. 8, 1978, 
92 Stat. 3107; Pub. L. 96-222, title I, Sec. 108(a)(1)(G), Apr. 1, 1980, 
94 Stat. 225; Pub. L. 97-34, title I, Sec. 113, Aug. 13, 1981, 95 Stat. 
195; Pub. L. 99-514, title XI, Sec. 1164(a), Oct. 22, 1986, 100 Stat. 
2511; Pub. L. 100-647, title I, Sec. 1011B(d), Nov. 10, 1988, 102 Stat. 
3489; Pub. L. 104-188, title I, Sec. 1123(a), Aug. 20, 1996, 110 Stat. 
1768; Pub. L. 105-206, title V, Sec. 5002(a), July 22, 1998, 112 Stat. 
788.)

                       References in Text

    Section 1886(d)(5)(B) or (h) of the Social Security Act, referred to 
in subsec. (d)(4)(B)(ii), is classified to section 1395ww(d)(5)(B) or 
(h) of Title 42, The Public Health and Welfare.


                               Amendments

    1998--Subsec. (b)(4). Pub. L. 105-206 added par. (4).
    1996--Subsec. (d)(4). Pub. L. 104-188 amended par. (4) generally. 
Prior to amendment, par. (4) read as follows: ``Educational 
institution.--For purposes of this paragraph, the term `educational 
institution' means an institution described in section 
170(b)(1)(A)(ii).''
    1988--Subsec. (d). Pub. L. 100-647 struck out ``(as of the close of 
the calendar year in which the taxable year begins)'' after ``appraised 
value'' in par. (2)(A)(i) and inserted at end ``The appraised value 
under subparagraph (A)(i) shall be determined as of the close of the 
calendar year in which the taxable year begins, or, in the case of a 
rental period not greater than 1 year, at any time during the calendar 
year in which such period begins.'' as concluding provision.
    1986--Subsec. (d). Pub. L. 99-514 added subsec. (d).
    1981--Subsec. (c). Pub. L. 97-34 added subsec. (c).
    1980--Subsec. (a). Pub. L. 96-222 struck out ``General rule'' in 
subsec. (a) as in effect on the day before the date of enactment of the 
Foreign Earned Income Act of 1978 to correct a legislative oversight in 
the amendment of subsec. (a) of this section by section 205 of Pub. L. 
95-615. The amendment by Pub. L. 95-615, however, was executed without 
reference to ``General rule'' as the probable intent of Congress, 
thereby requiring no change in text.
    1978--Subsec. (a). Pub. L. 95-615 designated existing provisions as 
subsec. (a), added subsec. (a) heading, and substituted ``furnished to 
him, his spouse, or any of his dependents by or on behalf of his 
employer for the convenience of the employer'' for ``furnished to him by 
his employer for the convenience of the employer''.
    Pub. L. 95-427 inserted provisions relating to factors not taken 
into account with respect to meals and certain fixed charges for meals.


                    Effective Date of 1998 Amendment

    Pub. L. 105-206, title v, Sec. 5002(b), July 22, 1998, 112 Stat. 
789, provided that: ``The amendment made by subsection (a) [amending 
this section] shall apply to taxable years beginning before, on, or 
after the date of the enactment of this Act [July 22, 1998].''


                    Effective Date of 1996 Amendment

    Section 1123(b) of Pub. L. 104-188 provided that: ``The amendment 
made by this section [amending this section] shall apply to taxable 
years beginning after December 31, 1995.''


                    Effective Date of 1988 Amendment

    Amendment by Pub. L. 100-647 effective, except as otherwise 
provided, as if included in the provision of the Tax Reform Act of 1986, 
Pub. L. 99-514, to which such amendment relates, see section 1019(a) of 
Pub. L. 100-647, set out as a note under section 1 of this title.


                    Effective Date of 1986 Amendment

    Section 1164(b) of Pub. L. 99-514 provided that: ``The amendment 
made by subsection (a) [amending this section] shall apply to taxable 
years beginning after December 31, 1985.''


                    Effective Date of 1981 Amendment

    Amendment by Pub. L. 97-34 applicable with respect to taxable years 
beginning after Dec. 31, 1981, see section 115 of Pub. L. 97-34, set out 
as a note under section 911 of this title.


                    Effective Date of 1980 Amendment

    Amendment by Pub. L. 96-222 effective as if included in the Foreign 
Earned Income Act of 1978, Pub. L. 95-615, see section 108(a)(2)(A) of 
Pub. L. 96-222, set out as a note under section 3 of this title.


                    Effective Date of 1978 Amendment

    Section 4(b) of Pub. L. 95-427 provided that: ``The amendment made 
by subsection (a) [amending this section] shall apply with respect to 
taxable years beginning after December 31, 1953, and ending after August 
16, 1954.''


         Effective Date of 1978 Amendment; Election of Prior Law

    Amendment by Pub. L. 95-615 applicable to taxable years beginning 
after Dec. 31, 1977, with provision for election of prior law, see 
section 209 of Pub. L. 95-615, set out as a note under section 911 of 
this title.


                         Statute of Limitations

    Pub. L. 96-605, title I, Sec. 107(b), Dec. 28, 1980, 94 Stat. 3524, 
provided that: ``In the case of any allowance received during calendar 
year 1974, 1975, 1976, or 1977, subsections (a)(2) and (e) of such 
section 3 [section 3 of Pub. L. 95-427, set out below] shall be applied 
by substituting the date one year after the date of the enactment of 
this Act [Dec. 28, 1980] for `April 15, 1979' each place it appears.''


  Treatment of Certain Statutory Subsistence Allowances or Subsistence 
  Allowances Negotiated in Accordance With State Law Received by State 
                 Police Officers Before January 1, 1978

    Section 3 of Pub. L. 95-427, as amended by Pub. L. 96-605, title I, 
Sec. 107(a), Dec. 28, 1980, 94 Stat. 3524; Pub. L. 99-514, Sec. 2, Oct. 
22, 1986, 100 Stat. 2095, provided that:
    ``(a) General Rule.--If--
        ``(1) an individual who was employed as a State police officer 
    received a statutory subsistence allowance or a subsistence 
    allowance negotiated in accordance with State law while so employed,
        ``(2) such individual elects, on or before April 15, 1979, and 
    in such manner and form as the Secretary of the Treasury may 
    prescribe, to have this section apply to such allowance, and
        ``(3) this section applies to such allowance,
then, for purposes of the Internal Revenue Code of 1986 [formerly I.R.C. 
1954], such allowance shall not be included in such individual's gross 
income.
    ``(b) Allowances to Which Section Applies.--For purposes of this 
section, this section applies to any statutory subsistence allowance or 
subsistence allowance negotiated in accordance with State law which was 
received--
        ``(1) after December 31, 1969, and before January 1, 1974, to 
    the extent such individual did not include such allowance in gross 
    income on his income tax return for the taxable year in which such 
    allowance was received, or
        ``(2) during the calendar year 1974, 1975, 1976, or 1977.
    ``(c) Other Definitions.--For purposes of this section--
        ``(1) State police officer.--The term `State police officer' 
    means any police officer (including a highway patrolman) employed by 
    a State (or the District of Columbia) on a full-time basis with the 
    power to arrest.
        ``(2) Income tax return.--The term `income tax return' means the 
    return of the taxes imposed by subtitle A of the Internal Revenue 
    Code of 1986. If an individual filed before November 29, 1977, an 
    amended return for any taxable year, such amended return shall be 
    treated as the return for such taxable year.
    ``(d) Limitation on Deduction.--If any individual receives a 
subsistence allowance which is excluded from gross income under 
subsection (a), no deduction shall be allowed under any provision of 
chapter 1 of the Internal Revenue Code of 1986 for expenses in respect 
of which he has received such allowance, except to the extent that such 
expenses exceed the amount excludable from gross income under subsection 
(a) and the excess is otherwise allowed as a deduction under such 
chapter 1.
    ``(e) Statute of Limitations.--If refund or credit of any 
overpayment of tax resulting from the application of this section is 
prevented at any time on or before April 15, 1979, by the operation of 
any law or rule of law (including res judicata), refund or credit of 
such overpayment (to the extent attributable to the application of this 
section) may, nevertheless, be made or allowed if claim therefor is 
filed on or before April 15, 1979.''

                  Section Referred to in Other Sections

    This section is referred to in sections 132, 280A, 1402, 3121, 3231, 
3306 of this title; title 42 sections 409, 411.
