Rev. Rul. 56-508

Advice has been requested with respect to the deductibility for Federal income tax purposes of actual expenses incurred by an individual in rendering volunteer services to the American Red Cross and to a church.

In the instant case the taxpayer, in rendering gratuitous services to the American Red Cross as a nurses' aide at a local hospital and in performing other volunteer work at and for a local church, incurs unreimbursed expenses (1) for transportation to and from the hospital and the church, (2) for the cost and maintenance of her Red Cross uniforms, (3) for the purchase of white shoes and gloves worn exclusively with such uniforms, and (4) for lunches while performing such services.

Section 39.23(a)-2(i) of Regulations 118, made applicable to section 162 of the Internal Revenue Code of 1954 by the authority of Treasury Decision 6091, C.B. 1954-2, 47, precludes the deduction of expenses incurred in commuting between a taxpayer's residence and his principal or regular place of business or employment. That prohibition, however, is not applicable to the transportation expenses herein discussed because the rendition of such gratuitous services does not constitute a trade or business and also because of the essential differences appearing in the statutes in question. Section 162(a) of the Code provides for the deduction of all the ordinary and necessary expenses paid or incurred `in carrying on' any trade or business, including traveling expenses while away from home `in the pursuit of' a trade or business. The quoted phrases have consistently been held to preclude the deduction of commuting, reporting, and other enabling expenses. Compare example 3 with example 8 in Rev. Rul. 55-261, C.B. 1955-1, 307.

On the other hand, section 170 of the Code provides in part that in computing taxable income an individual may deduct, subject to certain limitations, charitable contributions or gifts payment of which is made within the taxable year to or for the use of a corporation, trust, community chest, fund, or foundation which is organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes or for the prevention of cruelty to children or animals.

It is clear that contributions or gifts payment of which is made directly to the American Red Cross or to the instant church constitute allowable deductions under section 170 of the Code. I.T. 3258, C.B. 1939-1 (Part 1), 123. It is also clear that the value of services rendered to either such organization is not deductible as a contribution. O.D. 712, C.B. 3, 188 (1920). However, unreimbursed expenses actually incurred at the direction and for the benefit of either organization by an individual in connection with the performance of such services are not considered as part of the nondeductible value of the services rendered, but are regarded as deductible contributions made `for the use of' the organization. I.T. 3571, C.B. 1942-2, 108; Rev. Rul. 55-4, C.B. 1955-1, 291.

It has long been held that commuting expenses between a taxpayer's residence and his principal or regular place of employment are not business expenses but personal expenses since they are not incurred in carrying on the business and are not made for the benefit of the employer but for the employee's own benefit. See, for example, John C. Bruton v. Commissioner , 9 T.C. 882. Conversely, it is believed that the transportation expenses herein discussed are not personal expenses because fundamentally they are not incurred for the benefit of the taxpayer herself but for the benefit of the organization or activity for which she performs such gratuitous services. Accordingly, it is concluded that the expenses actually incurred for transportation between the taxpayer's residence and the hospital or church where she performs gratuitous services are deductible as contributions payment of which is made for the use of such organizations, provided the expenses in question are directly connected with and solely attributable to the rendition of such services.

Similarly, the taxpayer's unreimbursed expenses for the cost and maintenance of her Red Cross uniforms, for the purchase of white shoes and gloves worn exclusively with such uniforms, and for meals consumed while rendering such gratuitous services, need not be considered as part and parcel of the nondeductible value of the services performed for such organizations. It does not necessarily follow that such out-of-pocket expenses represent allowable contributions, but it does raise the question whether such expenses are nondeductible personal expenses or deductible contributions. This is primarily a question of fact.

Volunteer Red Cross workers serving in hospitals as nurses' aides are required to wear uniforms which resemble those of student nurses. Professional nurses and other individuals engaged in a trade or business may deduct, as ordinary and necessary business expenses under section 162(a) of the Code, the cost and maintenance of distinctive uniforms which they are required to wear while on duty and which are not adaptable to ordinary wear. See I.T. 3988, C.B. 1950-1, 28; and Mimeograph 6463, C.B. 1950-1, 29. Since Red Cross volunteers serving as nurses' aides are also required to wear distinctive uniforms which are not adaptable to ordinary wear, and as their uniforms are worn for the benefit of the Red Cross and its charitable activities rather than for the comfort and convenience of the volunteers, the cost and maintenance of such uniforms are not personal expenses but are directly connected with and solely attributable to the performance of such services. It follows that such uniform expenses of volunteer nurses' aides represent payments made for the use of the Red Cross and constitute deductible contributions. Furthermore, unreimbursed expenses incurred by such nurses' aides for the purchase of white shoes and gloves worn exclusively with their uniforms, as well as unreimbursed expenses incurred by other volunteer Red Cross workers, whether or not serving in hospitals, for the purchase and maintenance of distinctive uniforms and accessories, are also deductible as charitable contributions under section 170 of the Code, if they are required to be worn while performing gratuitous services for that organization and otherwise are without general utility. See Helen Krusko Harsaghy v. Commissioner , 2 T.C. 484, acquiescence, C.B. 1945, 3.

The cost of one's own lunch (at least if not incurred in connection with the performance of gratuitous services while in a travel status, as to which see Rev. Rul. 55-4, supra ) is ordinarily and by its very nature about as personal as any expense can be, and the deduction of personal expenses is specifically prohibited by section 262 of the Code. It is fundamental that the businessman who procures his midday meal downtown because it is impracticable for him to return to his residence at noon cannot deduct the cost of his lunch because that is considered a personal living expense even though his business in effect requires him to purchase such a meal outside his own dwelling. Similarly, it is believed that the instant taxpayer is in no essentially different position from the businessman who must have his lunch (and perhaps also his dinner) downtown, even though the volunteer herein would not have incurred the expense for this particular lunch unless she was rendering such gratuitous services. Cf., Louis Drill v. Commissioner , 8 T.C. 902; Fred Marion Osteen et al. v. Commissioner , 14 T.C. 1261; John S. Martin v. Commissioner , Tax Court Memorandum Opinion entered June 7, 1944. Obviously, such a lunch is purchased and consumed primarily to satisfy the individual's personal needs rather than to benefit the organization for which she performs such gratuitous services. Furthermore, such a meal takes the place of the lunch which the taxpayer would otherwise have. See also Paul Bakewell, Jr. v. Commissioner , 23 T.C. 803, in which the Tax Court states that although a businessman's suit, a saleslady's dress, and an accountant's glasses are necessary for their business, such necessity does not overcome the personal nature of those items or make them deductible as business expenses. The lunches in question are likewise considered to be so intrinsically personal that the cost thereof does not lose its identity as an ordinary personal expense and is not converted into a deductible contribution, notwithstanding the fact that it may be necessary for the taxpayer to procure these meals while performing such gratuitous services.

Accordingly, it is held that out-of-pocket expenses incurred by an individual for transportation to and from a local hospital or a local church for the purpose of rendering volunteer services to the American Red Cross or to the church and for the cost and maintenance of uniforms which are required to be worn in performing the volunteer services, if such uniforms are without general utility, constitute contributions within the meaning of section 170 and are deductible, subject to the limitations imposed by that section, in computing taxable income. However, the cost of meals, unless such meals are necessarily incurred while away from home in the course of rendering the volunteer services, constitutes a nondeductible personal expense. It is the position of the Internal Revenue Service that for this purpose the phrase `away from home' means away from home overnight in the course of rendering such volunteer services. This is the same meaning given to that phrase in applying the provisions of section 162(a)(2) of the Code relating to traveling expenses incurred while away from home in the pursuit of a trade or business.