An Act to prohibit the issuance of regulations on the taxation of fringe benefits, and for other purposes.
PL 95-427 (H.R.12841), enacted 10/07/1978

92 STAT. 996 
PUBLIC LAW 95-427—OCT. 7, 1978 
Public Law 95-427 
95th Congress 
Oct. 7, 1978 
[H.R. 12841] 
Taxes. 
Regulations on 
taxation of fringe 
benefits, 
prohibition. 
26 u s e 61 note. 
26 u s e 61. 
26 u s e 62 note. 
26 u s e 62, 162, 
262, 3101 et seq., 
3301 et seq., 
3401 et seq. 
26 u s e 119 note. 
26 u s e 1 et seq. 
An Act 
To prohibit the issuance of regulations on the taxation of fringe benefits, and 
for other purposes. 
Be it enacted hy the Senate and House of Representatives of the 
United States of America in Congress assembled, 
SECTION 1. FRINGE BENEFIT REGULATIONS. 
(a) I N GENERAL.—>fo fringe benefit regulation shall be issued— 
(1) in final form on or after May 1, 1978, and on or before 
December 31,1979, or 
(2) in proposed or final form on or after May 1, 1978, if such 
regulation has an effective date on or before December 31,1979. 
(b) DEFINITION OF FRINGE BENEFIT REGULATION.—For purposes of 
subsection (a), the term "fringe benefit regulation" means a regulation 
providing for the inclusion of any fringe benefit in gross income by 
reason of section 61 of the Internal Revenue Code of 1954. 
SEC. 2. COMMUTING EXPENSES. 
With respect to transportation costs paid or incurred after Decem-
ber 31, 1976, and on or before December 31, 1979, the application of 
sections 62,162, and 262 and of chapters 21, 23, and 24 of the Internal 
Revenue Code of 1954 to transportation expenses in traveling between 
a taxpayer's residence and place of work shall be determined— 
(1) without regard to Revenue Ruling 76^53 (and without 
regard to any other regulation, ruling, or decision reaching the 
same result as, or a result similar to, the result set forth in such 
Revenue Ruling); and 
(2) with full regard to the rules in effect before Revenue Rul-
ing 76-453. 
SEC. 3. TREATMENT OF CERTAIN STATUTORY SUBSISTENCE ALLOW-
ANCES OR SUBSISTENCE ALLOWANCES NEGOTIATED IN 
ACCORDANCE WITH STATE LAW RECEIVED BY STATE 
POLICE OFFICERS BEFORE 
JANUARY 1, 1978. 
(a) GENERAL RULE.—If— 
(1) an individual who, was employed as a State police officer 
received a statutory subsistence allowance or a subsistence allow-
ance 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 1954, such allow-
ance 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 1,1977, 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 1977. 
PUBLIC LAW 95-427—OCT. 7, 1978 
92 STAT. 997 
(c) OTHER DEFIXITIONS.—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 Reve-
nue Code of 1954. If an individual filed before November 29,1977, 26 USC 1 et seq. 
an amended return for any taxable year, sucli amended return 
shall be treated as the return for such taxable year. 
(d) LIMITATION ON DEDUCTION.—If any individual receives a sub- 
?•:' 
sistence allowance which is excluded from gross income under subsec-
tion (a), no deduction shall be allowed under any provision of 
chapter 1 of the Internal Revenue Code of 1954 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 imder sub-
section (a) and the excess is otherwise allowed as a deduction under 
such chapter 1. 
(e) STATXTrE OF LIMITATIONS.—If refund or credit of any overpay-
ment 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 over-
payment (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. 
SEC. 4
. 
MEALS FURNISHED FOR 
THE 
CONVENIENCE OF 
THE 
EMPLOYER. 
(a) I N GENERAL.—Section 119 of the Internal Revenue Code of 1954 26 USC 119. 
(relating to meals or lodging furnished for the convenience of the 
employer) is amended to read as follows: 
"SEC. 1
1
9
. 
MEALS 
OR 
LODGING 
FURNISHED 
FOR 
THE CONVENIENCE 
OF THE EMPLOYER. 
" (a) GENERAL RULE.—There shall be excluded from gross income of 
an employee the value of any meals or lodging furnished to him by 
his employer for the convenience of the employer, but only if— 
"(1) in the case of meals, the meals are furnished on the busi-
ness 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 con-
dition 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 ) 
I N GENERAL.—If— 
" (i) an employee is required to pay on a periodic basis 
a fixed charge for his meals, and 
92 STAT. 998 
PUBLIC LAW 95-427—OCT. 7, 1978 
"(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 or SUBPARAGUAPM (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 pay-
ment whetlier he accepts or declines the meals." 
26 use 119 note. 
(b) EriECTivE DATE.—The amendment made by subsection (a) shall 
apply with respect to taxable years beginning after December 31,1953, 
and ending after August 16.1954. 
AppVoved October 7, 1978. 
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" 
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LEGISLATIVE HISTORY: 
HOUSE REPORT No. 95-1232 (Comm. on Ways and Means). 
CONGRESSIONAL RECORD, Vol. 124 (1978): 
June 28, considered and passed House. 
Aug. 2, 4, considered and passed Senate, amended. 
Sept. 19, House concurred in Senate amendments.