Commissioner v. Kowalski, U.S. Supreme Court [434 U.S. 77; 1977] and write a 5 page summary of the case.

Commissioner v. Kowalski, 434 U.S. 77 (1977), is a decision of the United States Supreme Court relating to taxation of meals furnished by an employer.[1] In this case, the Court interpreted Internal Revenue Code 119(a)-(b)(4) and (d) and Treas. Reg. 1.119-1.[2][3] Most notably, the Court held that: 119 was intended to exclude meals received "in kind," and so does not exclude cash reimbursements for meals like the one in question. Facts The State of New Jersey instituted a cash meal allowance for its state police officers in July 1949. Before that, troopers were provided a mid-shift meal at one of several meal stations located throughout the State. The State had decided that this system was unsatisfactory, as it required troopers to leave their patrol areas unattended for extended periods of time. The new system provided troopers with a cash allowance, which troopers could use to purchase a meal at a location within their patrol area, thus making it unnecessary for them to leave the area unmonitored.The meal allowance was paid bi-weekly in advance and was included, although separately, with a troopers salary. The money was also separately accounted for in the State's accounting system, and funds from the meal allowance account were never mixed with the salary accounts. Troopers were not required to spend the allowance on mid-shift meals, nor were they required to account for the manner in which the money was spent. This meant that troopers were allowed to eat at home if their home was within their patrol area, or to bring a meal with them to eat in or near their patrol cars. Kowalski, a state trooper, reported wages for 1970 that included only a portion of his meal allowances (he included $326.45, which omitted $1,371.09 in allowances). The Commissioner believed that this amount should have been included in income, and determined a tax deficiency. Kowalski argued that the cash meal allowance was not compensatory, but was furnished for the convenience of the employer and therefore wasn't income under I.R.C. 61(a), and that alternatively, it was excluded under I.R.C. 119.