Rev. Rul. 63-82

Advice has been requested as to the deductibility, for Federal income tax purposes, of expenses incurred by a state supreme court justice while away from his residence attending sessions of the court in the state capital, under the circumstances described below.

The taxpayer is a justice of a state supreme court which holds one term annually in the state capital. The annual term continues for such time and periods as the court from time to time directs, but normally lasts from 50 to 60 days per year.

The taxpayer maintains a home and resides in a city other than where the state capital is located. Pursuant to state statute, the taxpayer is provided with an office for the conduct of court business in the city in which he resides. A library and a state employee, who works under the direction of the justice, are also provided at public expense at such office. The taxpayer spends approximately 200 days during a year, while the court is not in formal session, performing official judicial duties at this office. These duties include work on appeals, hearing of petitions addressed to him as a justice under state law, and the disposition of miscellaneous judicial matters. This office is not maintained for the convenience of the justice, but for the convenience of litigants and their counsel.

Section 162(a) of the Internal Revenue Code of 1954 provides, in part, that among the ordinary and necessary business expenses allowable as deductions are traveling expenses (including the entire amount expended for meals and lodging) while away from home in the pursuit of a trade or business.

Section 162(a) of the Code, as amended by section 4 of the Revenue Act of 1962, provides that among the ordinary and necessary business expenses allowable as deductions are traveling expenses (including amounts expended for meals and lodging other than amounts which are lavish or extravagant under the circumstances). This section as amended applies to taxable years ending after December 31, 1962, but only in respect of periods after that date.

A taxpayer's home for traveling expense purposes is generally held to be at his place of business or employment, which is often called his post of duty. Where a taxpayer has two occupations, or is carrying on a single occupation at two continuing posts of duty which require him to spend a substantial amount of time in each of two cities, his `home' is held to be at his principal place of business. A taxpayer can deduct his expenses for meals and lodging while his duties require him to be at his minor place of business and away from his principal post of duty at least overnight. A taxpayer may also deduct the cost of transportation on all trips made between such locations for business reasons, whether or not they are overnight trips. See Rev. Rul. 54-147, C.B. 1954-1, 51; Rev. Rul. 54-497, C.B. 1954-2, 75; Rev. Rul. 55-604, C.B. 1955-2, 49; and Rev. Rul. 61-67, C.B. 1961-1, 25.

Revenue Ruling 61-67 recognizes that a member of a state legislature whose duties as such constitute his only trade or business may, under certain circumstances, have two separate posts of duty, the one at the state capital and the other in the area which he represents in the state legislature. Whether the state capital or the area which the member represents is his principal place of business depends primarily upon the length of time which he is usually required to spend at each of these locations for business purposes.

Similarly, although the principal office of a state supreme court may be located at the state capital, that fact does not require the holding that the state capital also constitutes the principal post of duty of the court's personnel for Federal income tax purposes.

The taxpayer in the instant case has two business locations or posts of duty, the state capital and the city in which he resides where he performs judicial duties when the court is not in formal session. Since the taxpayer normally spends about 200 days per year performing official judicial duties in the city in which he resides, it is his principal place of business or post of duty.

Based on the foregoing, it is held that the taxpayer may deduct expenses for meals and lodging necessarily incurred while on overnight trips attending formal court sessions in the state capital and transportation expenses incurred on trips, whether or not overnight trips, between his principal place of business and the state capital for the purpose of carrying out judicial duties, subject, where applicable, to the substantiation requirements of section 274(d) of the Code and section 1.274-5(b) and (c) of the Income Tax Regulations promulgated thereunder. These expenses are deductible from gross income in computing adjusted gross income under the provisions of section 62(2) of the Code.