View Full Version : Odd tax Q: Can I be a "fee-based government official" if I get *no* pay, but have expenses?

06-08-2011, 01:35 AM
I am the official historian of the municipality where I live. The historian position is mandated by state law -- it is not just some made-up, honorary, or temporary position. I was appointed by the local elected official designated by that law to make the appointment.

I am given a desk, phone and computer, but I do not get paid for my work as historian. Interestingly, the law states that I am allowed to receive compensation by the government for my work. A different (higher) elected official makes that decision. That higher official, however, has never chosen to give any compensation to me or my fellow historians.

Being historian is a labor of love for me, so I spend a lot of my own money doing the job. (And I do make a piddly amount of income in the form of a random speaking fee or two.)

Here's my question: Can I deduct my historian expenses as a "fee-based government official" (a designation given on IRS form 2106) even though I have never gotten a "fee"?

(FYI, I also have a regular, salaried job -- in the history field, too -- that enables me to feed myself and pay the bills.)

Thanks all in advance.

Oh, and yes, I realize that any poster offering an opinion in this thread is not my lawyer or tax preparer. I will take all advice as opinions.

06-08-2011, 06:37 AM
I don't think you can. You wouldn't qualify as a fee based government official if an elected official decides whether to compensate you out of the budget. You would be an employee, and subject to the rule for employee business expenses.

From the IRS
When a public office is compensated solely on a fee basis, then the person who serves in that capacity is considered to operate a trade or business rather than be considered an employee. This exception only applies when the fees are received directly from the public rather than from the government. For example, a building inspector who is compensated solely from fees paid directly to him or her by clients is considered to operate a trade or business and is not treated as an employee of the government.

06-08-2011, 07:58 AM
Doreen, thank you for that.

You say that I am considered an employee; but doesn't the IRS statement you quote contradict that conclusion? The way I read it, it seems that I would need to treat my historian expenses as self-employment (or sole propietorship) business expenses (to put on Schedule C). The only income I am getting is a few speaking fees that are paid directly from the public (clients) -- like the building inspector example they cite.


06-08-2011, 02:00 PM
They're talking about a government official who is paid for official duties directly by the public rather than through the government budget. The building inspector inspects buildings for a government purpose - to issue certificates, or to enforce codes, etc. A marshal might be paid a fee by the people's whose judgements are enforced. A historian might be assigned as his official duty to conduct tours of city hall and other government buildings and be paid directly by those taking the tour. No one but a government official can conduct the building inspection, and the same is true ( in my example) for tours of government buildings .

Your speeches are most likely not for a government purpose- although being the official historian may have an impact on your being chosen for the speech, there is nothing preventing these organizations from hiring another historian to speak.

06-08-2011, 02:33 PM
My Bro sez "Since you are a volunteer, and the city is a org. I'd deduct the expenses as a contribution on Sch A. No income, no Sch C. "