Employees may soon be seeing changes in the manner that corporate perks are taxed. The Internal Revenue Service is always looking for ways to increase their revenues and is now considering taxing perks such as meals, yoga classes and free shuttle services. The IRS is especially taking a close look at perks that are being provided in the technology sector.

Companies may wish to push back on such proposals, however. Many perks such as the providing of meals are deemed necessary by businesses. Certain perks are put in place to allow employees to save more time and be more productive at the workplace.

Certain so-called perks can be considered fringe benefits while others can count as taxable perks. For example, meals that are provided regularly might be taxed in the same manner as company cars are taxed to employees who use such vehicles for personal use.

The distinction between a fringe benefit and taxable perk can be complex, however. A tax professor was of the opinion that free meals should be considered compensation for an employee's services and therefore results in tax consequences. Others have argued, however, that meals may be provided for purposes other than compensation and thus should not be taxed. For example, the meals may have been provided for employer convenience.

The area of tax law is so complex that many attorneys practice primarily only in this area. This is especially true when speaking of ways that businesses can reduce their tax burdens. A Georgia business, for example, will face a number of complex regulations on federal, state and local levels. Unfortunately, we do not anticipate that taxes will become any less complicated in the future.

Source: Money News, "IRS Considers Taxing Corporate Perks," Dan Weil, April 15, 2014