In the case of Commissioner of Internal Revenue v. Kowalski et ux., 1977, the U.S. Supreme Court ruled that meal allowances paid by a state to its employees were considered taxable income under federal law. The respondent, Mr. Kowalski, was a New Jersey State Trooper who received daily meal allowances as part of his compensation package and did not report these payments on his federal income tax return. The IRS argued that these allowances constituted gross income and should be taxed accordingly; however, Kowalski contended they were non-taxable fringe benefits or working condition benefits excluded from gross income under Section 119 or Section 132(a) respectively of the Internal Revenue Code (IRC). In a unanimous decision delivered by Justice Blackmun, the court sided with the IRS stating that such cash payments are not excludable from gross income regardless if used for meals while on duty.

In the dissenting opinion for Commissioner of Internal Revenue v. Kowalski, Justice Blackmun argued that meal allowances provided to state troopers should be considered as income and thus taxable under the Internal Revenue Code. He disagreed with the majority's interpretation of "convenience of employer" doctrine, stating it was not applicable in this case because these meals were not consumed on business premises nor were they a condition of employment. Instead, he viewed them as personal expenses since officers had discretion over their meals and could eat at home if they wished. Furthermore, he pointed out that such broad application would open doors for other professions to claim similar exemptions which would undermine tax equity principles and lead to significant revenue loss for government.