Rev. Rul. 80-99

ISSUE

Is a reimbursement received by an individual, under the circumstances described below, includible in the individual's gross income pursuant to section 61 of the Internal Revenue Code?

FACTS

An individual employed by a state government in an appointive position was invited to attend and address a political fund-raising event sponsored by a political organization described in section 527 of the Code, and was authorized to do so by the individual's superiors. The political organization reimbursed the individual for expenses incurred in attending the fund-raising event, in an amount not exceeding the individual's actual expenditures for the reasonable costs of traveling away from home to and from the event, including meals and lodging in connection therewith.

LAW AND ANALYSIS

Section 61(a) of the Code and the Income Tax Regulations thereunder provide that, except as otherwise provided by law, gross income means all income from whatever source derived.

It is a well-established general rule that reimbursements (other than those specifically excluded by law) for personal expenses of the taxpayer are includible in the taxpayer's gross income. See, for example, Old Colony Trust Co. v. Commissioner, 279 U.S. 716 (1929), VIII-2 C.B. 222 (1929); Silverman v. Commissioner, 253 F.2d 849 (8th Cir. 1958); Rev. Rul. 74-75, 1974-1 C.B. 19; and Rev. Rul. 79-49, 1979-1 C.B. 57.

However, it is also a well-established position of the Internal Revenue Service that reimbursements for expenses incurred by a taxpayer on behalf of another in a nonemployment context are not includible in the taxpayer's gross income. See, for example, Rev. Rul. 55-555, 1955-2 C.B. 20; Rev. Rul. 57-60, 1957-1 C.B. 25, clarified by Rev. Rul. 60-280, 1960-2 C.B. 12; Rev. Rul. 63-77, 1963-1 C.B. 177; Rev. Rul. 67-30, 1967-1 C.B. 9; Rev. Rul. 77-280, 1977-2 C.B. 14; and Rev. Rul. 79-142, 1979-1 C.B. 58.

HOLDING

The reimbursement received by the individual is not includible in the individual's gross income under section 61 of the Code because the reimbursement was made in a nonemployment context for the reasonable expenses incurred by the individual in traveling away from home on behalf of the political organization, and such reimbursement did not exceed the individual's actual expenses for such travel.