## Facts

- John D. Moss, Jr., a partner in a Chicago trial firm, claimed deductions for his distributive share of partnership expenses for daily lunches at a nearby restaurant.
- The firm’s attorneys carried heavy caseloads and spent most workdays in court, making midday coordination difficult outside court recess.
- The attorneys met for a working lunch every business day at a restaurant near the office and courts, where they assigned coverage, discussed case problems, and updated the managing partner on settlements.
- The partnership paid the restaurant bills and reported them as business expenses; Moss claimed his share on his individual returns for 1976 and 1977.
- The Commissioner disallowed Moss’s claimed meal deductions as personal living expenses.

## Issues

1. Whether the cost of routine daily lunches consumed during business discussions near the taxpayer’s regular place of business is deductible as an ordinary and necessary business expense under IRC § 162(a).
2. Whether such lunch costs are nondeductible personal living expenses under IRC § 262 absent a specific statutory provision (such as travel “away from home” or employer-furnished on-premises meals).

## Decision

- The Tax Court held the lunch costs were inherently personal and nondeductible under IRC § 262, and not transformed into deductible expenses by the fact that business was conducted over lunch.
- The Seventh Circuit affirmed, holding that routine “working lunch” expenses near the office remained personal consumption costs even if the meetings improved efficiency and were strongly business-motivated.
- The court rejected attempts to deduct the full cost of the lunches or to allocate an asserted business “increment” as administratively unworkable in this context.

## Legal Principles

- IRC § 262 generally bars deductions for personal, family, or living expenses unless a specific Code provision provides otherwise.
- Meals are ordinarily personal consumption; discussing business while eating does not, by itself, convert meal costs into deductible business expenses under IRC § 162(a).
- Deductions for meal costs are more readily available only in limited, specifically defined circumstances (such as travel meals “while away from home” under IRC § 162(a)(2)); absent such a hook, routine local meals remain nondeductible.
- Where a meal has both personal and business aspects, courts may deny deductions when the personal and business components cannot be separated under a workable, administrable rule.
- Allowing deductions for routine off-premises meals for partners would conflict with the narrower statutory treatment of employer-furnished meals that depends on employee status and on-premises provision.

## Conclusion

The Seventh Circuit affirmed the disallowance of deductions for a law partner’s share of daily lunch meeting costs because eating lunch near one’s regular workplace is a personal living expense, and business utility alone does not make routine meal consumption deductible under IRC § 162.


Moss v. Commissioner, 758 F.2d 211 (7th Cir. 1985)