The Board heard the issue of whether the residence and meals at the hotel were compensation and therefore part of petitioner's gross income for which he could be taxed.
The court also looked at the intent of the parties and decided the employer never intended the room and board to form part of his compensation.
The living quarters and meals were included in a letter forming the employment contract and therefore was intended to be compensation.
The majority thinks the question is one of convenience, but the real issue is whether the petitioner benefited financially.
Though this case established the important doctrine of "convenience of the employer", §119(a) of the tax code now has two other requirements that are needed in order to take fringe benefit exclusions for meals and lodging.