Rev. Rul. 67-364

Advice has been requested regarding the deductibility, for Federal income tax purposes, of unreimbursed expenses incurred by a taxpayer under the circumstances described below.

The taxpayer, a civilian `ham' operator, incurs unreimbursed expenses in operating his radio equipment as a member of the supplemental program of the Military Affiliate Radio System. The Military Affiliate Radio System (MARS) is an organization of military radio stations and facilities established at United States Army and Air Force installations. The supplemental program, composed primarily of civilian MARS members, is under the jurisdiction of the Chief Signal Officer, Department of the Army and the Director of Communications and Electronics, Department of the Air Force.

The purpose of such program is to create interest in, and to further training in, military radio communications; to develop the technical ability of MARS members; to promote study and experimentation in military radio communications; to provide an additional source of trained communications personnel in the event of local or national emergency; and to provide supplemental radio communications when requested. Although membership in MARS is purely voluntary, a member must possess a valid Federal Communications Commission Amateur Radio Operator of Technician Class Amateur license and radio equipment capable of operating on at least two MARS frequencies. In addition, each member must participate in some phase of the program at least six credit hours each three months, operate his radio equipment in accordance with the rules and regulations prescribed by MARS, and submit an activity report to his MARS Director every month.

Section 170(a) of the Internal Revenue Code of 1954 provides that a deduction shall be allowed for any charitable contribution (as defined in subsection (c)), payment of which is made within the taxable year subject to certain limitations.

Section 170(c)(1) of the Code defines `charitable contribution' as including a contribution or gift to or for the use of a State, a Territory, a possession of the United States, or any prolitical subdivision of any of the foregoing, or the United States or the District of Columbia, but only if the contribution or gift is made for exclusively public purposes.

Section 1.170-2(a)(2) of the Income Tax Regulations provides, in part, that no deduction is allowable for a contribution of services. However, unreimbursed expenditures made incident to the rendition of services to an organization contributions to which are deductible may constitute a deductible contribution.

A member of MARS, while performing voluntary services for MARS, is rendering gratuitous services `for the use of' the United States within the meaning of section 170(c)(1) of the Code.

Accordingly, subject to the limitations of section 170(b) (1)(B) of the Code, the nonreimbursed out-of-pocket expenses incurred by the taxpayer for the operation, maintenance, and repair of his radio equipment which are directly attributable to the performance of such voluntary services are deductible. No deduction is allowed, however, for a proportionate share of the general maintenance or repair of the equipment, or for the fair rental value of such equipment, or for the depreciation occasioned by such use of the equipment in performing the voluntary services for MARS. See Revenue Ruling 58-279, C.B. 1958-1, 145, relating to the computation of a similar deduction in the case of a volunteer member of the Civil Air Patrol.