Rev. Rul. 59-96

In view of the court decisions in United States v. W. J. Shirah, et ux. , 253 Fed.(2d) 798, and J. W. Parrish et ux. v. United States , 158 Fed.Supp. 238, section 1.120-1(a) of the Income Tax Regulations has been amended. That section defined a statutory subsistence allowance received by police as `an established amount, apart from salary or other compensation, which is authorized under the laws of a State, a Territory, or a possession of the United States, by any political subdivision of any of the foregoing, or by the District of Columbia, to be paid to an individual who is employed as a police official of such governmental unit for meals and other incidental expenses in connection with his official duties.' The amendment is contained in Treasury Decision 6318, C.B. 1958-2, 52, and it eliminates the requirements that such allowance be an amount `apart from salary or other compensation' and that it be paid `for meals and other incidental expenses in connection with his official duties.' It provides, instead, that a statutory subsistence allowance is any such amount which is designated as a subsistence allowance by such a governmental unit. Accordingly, Revenue Ruling 57-46, C.B. 1957-1, 22, is modified to hold that gross income does not include an amount which is not in excess of $5 per day and is designated as a `subsistence allowance' pursuant to a statutory enactment of a State, a Territory or a possession of the United States, by any political subdivision of any of the foregoing, or by the District of Columbia, paid to an individual, who is employed as a police official by such governmental unit, before October 1, 1958, in a taxable year subject to the Internal Revenue Code of 1954. See section 3 of the Technical Amendments Act of 1958, 26 U.S.C. 120, which repealed section 120 of the Code, effective October 1, 1958, P.L. 85-866, C.B. 1958-3, 254. Also see section 1.120-1(d) of the regulations.

¹ Based on Technical Information Release 84, dated July 8, 1958.