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Political Candidate Expenses

2008-07-09 by

Today TaxMama hears from Steve in Tennessee with an interesting question . “I am running for Mayor in my little town. Are my campaign expenses deductible?”

Dear Steve,

Good luck on your campaign!

That’s an interesting question, particularly in a presidential election year when there is so much campaigning happening. Let’s look at the issues, OK?

Most likely, you set up an IRS Section 527 organization for your campaign – to receive donations and to pay operating expenses. You contributed money to your own campaign fund. But political contributions are never deductible. So if we were looking for contributions deductions, that would not work.
http://www.irs.gov/irm/part7/ch12s09.html

Of course, the good news is, if you did establish a Sec 527 organization, the money you raise from supporters won’t be taxable income to you!

(Just for fun, see IRS 87-119 discussing expenditures from campaign funds http://www.irs.gov/pub/irs-tege/rr87-119.pdf )

Let’s look at the cost of getting a new job. Job hunting costs are deductible. Would this qualify?

Weeeellll….it might if you were already a professional politician. Then, you are just spending money to get re-employed in the same field. Perhaps in that case, you might be able to justify the costs as job
hunting costs.

In general, the cost to get trained and educated for a new profession is not deductible. So, I’d have to extend that concept to the cost of campaigning to enter a new profession, too.

On the other hand, IRS Publication 535 actually addresses this issue
http://www.irs.gov/publications/p535/ch11.html#d0e9170 :

Political contributions. Contributions or gifts paid to political parties or candidates are not deductible. In addition, expenses paid or incurred to take part in any political campaign of a candidate for public office are not deductible.

Oh well…

And remember, you can find answers to all kinds of questions about campaign expenses and other tax issues, free. Where? Where else? At TaxMama.com

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Internal Revenue Manual (IRM)
Chapter 7.27.11 Political Organizations
IRS Revenue Ruling 87-119
discussing expenditures from campaign funds


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