Rev. Rul. 67-457

Advice has been requested whether legal fees incurred by a United States Congressman under the circumstances described below are deductible, for Federal income tax purposes, as ordinary and necessary business expenses under section 162 of the Internal Revenue Code of 1954.

The taxpayer is a United States Congressman who represents a State whose legislature and courts have been involved in drawing new Congressional Districts in that State. As a representative of one of the State's present Congressional Districts, the taxpayer considered it his duty to take an active part in the deliberations on this matter to insure that all the people of his district and of the State would be properly represented in the Congress in the future. In this endeavor, he incurred expenses in retaining the services of legal experts who aided him in the preparation of briefs for presentation of the matter before the courts.

Section 262 of the Code states that, except as otherwise expressly provided, no deductions shall be allowed for personal expenses.

Section 162(a) of the Code provides for the deduction of all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business.

Section 162(e) of the Code further provides, in pertinent part, that the deduction allowed by subsection (a) shall include all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business in direct connection with appearances before, submissions of statements to, or sending communications to, the committees, or individual members of any legislative body of a State with respect to legislation or proposed legislation of direct interest to the taxpayer.

The term `trade or business' includes the performance of the functions of a public office. The word `ordinary,' as used in section 162 of the Code, has consistently been given the connotation of normal, usual, or customary. It is not intended that the expenditures involved must be habitual or normal in the sense that the same taxpayer will have to make them often but that the expenses, as illustrated by experience, are the common and accepted practice in the particular field of business involved. An expense is `necessary' where it is appropriate and helpful in the development of the taxpayer's business. See Revenue Ruling 58-479, C.B. 1958-2, 60, and cases cited therein.

The legal expenses in the instant case were incurred in connection with a presentation to the courts concerning the matter of redistricting in the State represented by the taxpayer. Within the meaning of section 162 of the Code, such expenses are not ordinary, necessary, or directly connected with, the carrying on of the taxpayer's trade or business of being a United States Congressman.

Insofar as the legal expenses may be considered to have been incurred to assist the taxpayer in continuing in his position as a Congressman, the rationale set forth in the case of Michael F. McDonald v. Commissioner of Internal Revenue , 323 U.S. 57 (1944), Ct. D. 1617, C.B. 1944, 94, is applicable. In this case the Supreme Court of the United States held that expenditures made by a judge, appointed to an interim judgeship, in seeking election for a full term were not deductible under section 23(a)(1)(A) of the Internal Revenue Code of 1939 (now section 162 of the 1954 Code) since such expenditures were not incurred in carrying on the taxpayer's business of judging, but rather in trying to be a judge for the next full term.

Accordingly, the legal expenses incurred by the United States Congressman in connection with a presentation to the courts concerning the matter of redistricting, are not deductible business expenses under section 162 of the Code, but are expenses, the deduction of which is prohibited by section 262 of the Code.