Potentially true ... but is this indicative of a still rising tech trend across the board ... or SF continuing to locally benefit at the 'expense' of other areas ?My friends say SF is still booming, and many of them have gotten really good jobs in tech now, right in the heart of SF! It used to be you had to go all the way to San Jose (1+ hour south of SF in the South Bay) for those jobs. Now they are popping up hard in SF (basically the West Bay) and in the East Bay.
- six weeks ago, Microsoft announced 18,000 employees will be laid off ... see
- not counting the 18000 Microsoft layoffs above, Challenger-Gray compiled the following re other tech related layoffs
Also, the 'tide' seems to be turning on tech industries in a different way ... from
(snip)"the Internal Revenue Service is now targeting Silicon Valley. The tax collectors are offended by the practice, common in the technology industry, of providing meals to employees without counting the food as taxable compensation.
Courts have traditionally found that when meals are offered for the "convenience of the employer" they do not need to be considered a taxable benefit. And certainly it benefits firms like Google GOOGL +0.64% and Facebook FB -0.10% to have employees grab a quick bite before returning to their desks rather than spending time to dine off-campus.
But last week the Treasury published the annual list of IRS priorities and ominously included a plan for new guidance "regarding employer-provided meals." As a large bureaucracy, the IRS has no fewer than 317 such projects on its priority list. In this case they seem to mean it. The Journal reports that IRS auditors are now flagging the issue and demanding back taxes from companies amounting to 30% of the meals' fair-market value, according to lawyers for the firms."(snip)
The important take-away ( no pun intended ) is that the IRS has 'finally' started applying the same rules to tech industries which it has applied to other types of industries for years. In the specific example cited, properly accounting for 'free' food provided to employees will both erase a business expense tax deduction for the employers, as well as increase the 'total taxable income' which employees must pay taxes on by $100 ( or whatever ) per week i.e. the 'equivalent cash value' of their 'free' food, without actually increasing the size of their paychecks. Undoubtedly, the same principle will be applied to 'free' employer provided transportation and other 'free' employee benefits.
The tech industry 'employers' obviously won't be too disturbed about having to retroactively pay back 'illegal' tax write-offs taken against the cost of these 'free' employee perks. However, the tech industry 'employees' may be far less able to afford retroactive tax bills for $5,000 ( or whatever ) per year for however many years they have worked for their tech industry employer ( potentially up to 7 years ) because the 'equivalent cash value' of their free food, free coach rides to and from work, etc. is added to their total taxable income levels for past, present, and future years.




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