2011 Legislator's Tax Guide: Campaign Expenses
Are my campaign expenses deductible for tax purposes?
A candidate's campaign expenditures out of his or her own resources are not deductible as ordinary business expenses for income tax purposes. Even though a public office is defined as a trade or business (IRC § 7701(a)(26)), none of a candidate's campaign expenses are deductible. Regardless of the result of the election, a candidate cannot deduct expenses for attending political conventions, contributions to the political party which sponsored his or her candidacy, campaign travel expenses, his or her own campaign advertising, the expenses of successfully defending a position in a contested election, filing fees, or the cost of legal fees paid in litigation over redistricting. Nor may these expenses be amortized, as capital expenditures, over the term of the office. Even though a political office might be viewed as a stepping stone to some other business or profession, this is not enough to change the result. Thus, political campaign expenses are not deductible by a lawyer seeking election as a legislator in the hope that the exposure will build his or her professional practice. Even though a candidate felt that his or her professional reputation was damaged during a political campaign, the candidate cannot deduct the cost of any defamation litigation for allegations published during the campaign. In 1962 Congress enacted IRS § 162(e)(2)(A) of the Internal Revenue Code, which disallows all deductions for expenditures in any political campaign for a candidate for public office. Additional details may be obtained from the Campaign Treasurer's Handbook available from the American Institute of CPAs or your local CPA.