Rev. Rul. 55-555

It has long been the position of the Internal Revenue Service that a car pool arrangement in which the members share the responsibility for furnishing transportation to and from their places of work and each takes his turn at driving his own automobile is not an arrangement which gives rise to taxable income or deductible expenses. The Service has been asked whether the same rule applies to a car pool arrangement in which only one member uses his own automobile and his fellow members pay him a stated sum of money for transporting them to and from work.

It is the position of the Service that money received by an automobile owner from fellow employees for transporting them to and from work constitutes reimbursement by them for their share of the personal expenses incurred in the operation of the automobile for their mutual convenience. Such money is not includible in computing the gross income of the automobile owner for Federal income tax purposes. The automobile expenses incurred by him in commuting between his home and place of employment are personal expenses for which no deduction is allowed for Federal income tax purposes. However, this Revenue Ruling is not intended to apply to the situation where a particular car owner has developed his car pool arrangements to the extent that he can be said to have established a trade or business of transporting workers for hire from which a profit is derived