Under IRC 61 gross income is defined as “…all income from whatever source derived, including (but not limited to) compensation for services, including fees, commissions, fringe benefits, and similar items…” IRS Regulations 1.61-1 further explains that “…gross income means all income from whatever source derived unless excluded by law. Gross income includes income realized in any form, whether in money, property or services. Income may be realized, therefore, in the form of services, meals, accommodations, stock, or other property, as well as cash.” These definitions mean that all employee compensation, provided in whatever form, is taxable unless the IRC has deemed the compensation to be not taxable. In general, the same guidelines apply to withholding income, social security, and Medicate taxes. IRS Publication 15-B has a complete discussion on taxation of fringe benefits: ..