Rev. Rul. 73-468

Advice has been requested concerning the deductibility of expenses incurred by a Member of Congress under the circumstances described below.

The taxpayer, a newly elected Member of Congress, moved from his home State to Washington, D.C., incurring moving expenses within the meaning of section 217(b) of the Internal Revenue Code of 1954. On his Federal income tax return, the taxpayer claimed a moving expense deduction under section 217 of the Code for those expenses, and also for the same taxable year claimed a deduction under section 162(a) for living expenses of $3,000 that he incurred in Washington, D.C., after he had completed his move and had commenced working there.

Section 217 of the Code provides that there shall be allowed as a deduction moving expenses paid or incurred during the taxable year in connection with the commencement of work by the taxpayer as an employee or as a self-employed individual at a new principal place of work.

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. Among the items representing ordinary and necessary business expenses are traveling expenses (including amounts expended for meals and lodging other than amounts which are lavish or extravagant under the circumstances) while away from home in the pursuit of a trade or business.

Section 162(a) of the Code also provides that the place of residence of a Member of Congress within the State, congressional district, Territory, or possession which he represents in Congress shall be considered his home for purposes of determining traveling expense deductions, but that amounts expended by such Member within each taxable year for living expenses shall not be deductible for income tax purposes in excess of $3,000.

Section 1.217-2(c)(3)(iii) of the Income Tax Regulations provides that where a taxpayer maintains inconsistent positions by claiming a deduction for expenses of meals and lodging while away from home (incurred in the general location of the new principal place of work) under section 162 (relating to trade or business expenses) and by claiming a deduction under section 217 for moving expenses incurred in connection with the commencement of work at such place of work, it will be a question of facts and circumstances as to whether such new place of work will be considered a principal place of work and, accordingly, which category of deductions (business or moving) he will be allowed.

This provision of the regulations reconciles and clarifies the relationship between "moving expenses" deductible under section 217 of the Code and traveling expenses incurred while "away from home" which are deductible under section 162(a). A taxpayer's tax "home" for purposes of section 162(a) will generally be his regular or principal place of business or employment. See Rev. Rul. 71-247, 1971-1 C.B. 54. His new "principal place of work" for purposes of section 217 will generally be the same place as his tax "home". Thus, if the taxpayer claims a deduction for "away from home" travel expenses under section 162(a) he may not claim that he has at the same time, a new principal place of work for purposes of claiming a deduction for moving expenses under section 217, since if he did, he would be maintaining a factually inconsistent position within the meaning of section 1.217-2(c)(3)(iii) of the regulations.

In the case of a Member of Congress, his principal place of work for purposes of section 217 of the Code generally will be Washington, D.C., since he spends most of his working time there and it is the place at which his business activities are centered. See sections 1.217-2(c)(3)(ii) and (iii) of the regulations. For the same reasons, his tax "home," absent the specific language in section 162(a) dealing with the tax "home" of a Member of Congress, also generally would be in Washington, D.C. See George W. Lindsay, 34 B.T.A. 840 (1936), and Rev. Rul. 54-147, 1954-1 C.B. 51. With respect to Lindsay and the specific language in section 162(a) providing that, for purposes of such provision, the location of the tax "home" of a Member of Congress is his place of residence within the State, congressional district, Territory, or possession which he represents, the Supreme Court of the United States in Commissioner v. Stidger, 386 U.S. 287 (1967), 1967-1 C.B. 32 stated:

. . . The Commissioner's interpretation of the word "home" in connection with travel-expense deductions was also made clear to Congress when in 1936 it was held that Members of Congress could not deduct expenses which they incurred in Washington, D.C., even though they also maintained a residence in the district from which they had been elected. Lindsay v. Commissioner, 34 B.T.A. 840. Congress did not respond to this ruling by amending the statutory language generally to provide that "home" was intended to be synonymous with "residence," but instead merely carved out an exception to cover the special travel expense problems inherent in service as a national legislator. [Emphasis added.]

It is by virtue of the above statutory exception in section 162(a) of the Code that a new Member of Congress will generally be "away from home"--that is, away from his residence within the State, congressional district, Territory, or possession which he represents--in travel status while he is in Washington, D.C. on congressional business. On the other hand, it is by virtue of the facts and circumstances that Washington, D.C. will generally be his new principal place of work for purposes of section 217. See sections 1.217-2(c)(3)(ii) and (iii) of the regulations. Thus, a new Member of Congress claiming deductions under sections 162(a) and 217 will not be maintaining an inconsistent position within the meaning of section 1.217-2(c)(3)(iii) of the regulations when his tax "home", by virtue of and for purposes of section 162(a), is a place other than Washington, D.C., while his new principal place of work is factually determined to be Washington, D. C. for purposes of section 217.

Accordingly, it is held that the taxpayer in the instant case may deduct under section 217 of the Code the moving expenses incurred in moving from his home State to Washington, D.C., his factually determined new principal place of work, and he also may deduct under section 162(a) the living expenses ($3,000) incurred during the same taxable year while in Washington, D.C. However, under no circumstances may the taxpayer deduct the same expenses under both section 217 and section 162. See section 62 of the Code.