Arthur Benaglia (plaintiff) was the manager of several resort hotels. Benaglia’s duties required him to be continually on call to attend to the needs of hotel guests. As a result, Benaglia’s employer, the resort owner, required Benaglia to live and take all his meals in one of the hotels. Benaglia and his employer agreed on the necessity of this arrangement and stipulated to it in Benaglia’s contract. Benaglia’s salary varied greatly from year to year, but neither he nor his employer ever considered that the value of Benaglia’s lodging and meals should be included or accounted for as part of his salary. The commissioner of internal revenue (commissioner) (defendant) determined that Benaglia should have included $7,845 in his gross income to represent the fair market value of the lodging and meals he received from his employer. Benaglia petitioned for review.