Assume Congress recently passed a law creating a tax credit of up to $5,000 for businesses that supply oatmeal breakfasts to their employees.You are a tax attorney for small businesses. Your client, Jane, comes to you asking for advice about whether it would be more "tax efficient" for Jane to deduct the $6,000 of expenses she spends on breakfasts she supplies to her workers or if she should try to claim the $5,000 credit. Jane operates an early morning news program that requires her employees to report to work at 4:00 a.m. She provides them breakfast as a convenience to her as the employer to ensure the employees are effective and come to work on time. Jane is also concerned about whether this will affect her worker's tax liability, specifically whether the value of the breakfast would be income to them.

(a) Which would you recommend Jae claim? Why?

(b) Would Jane's employees have to recognize any income for the breakfasts?