Does the President Have to Report Food, Transportation and Other Such “Gifts” from Taxpayers on His Taxes?

Mark asks: Does the president have to report food, transportation and other such gifts from taxpayers on his taxes?

air-force-one-2No. And although it’s difficult to find an official explanation (or even a detailed one), I think the answer lies in the United States’ ridiculously complicated tax code.


The transportation, security, housing and other benefits received by the President and his family are not gifts. But assuming they were, neither Barack nor Michelle would have to pay any tax imposed.

Under U.S. Income Tax law, in particular 26 USC § 102(a), gifts are, with some exceptions, specifically excluded from taxable income:

Gross income does not include the value of property acquired by gift, bequest, devise, or inheritance.

Rather, taxes owed for any gift are governed by U.S. Estate and Gift Tax law, specifically 26 USC § 2502(c) which imposes the burden of paying any taxes due on the person who made the gift:

The tax imposed by section 2501 shall be paid by the donor.

This gift tax will kick in once the yearly value of any gift exceeds the annual exclusion rate per person (for 2013, $14,000) or once the total amount of gifts given over a lifetime exceeds the lifetime exemption for both gifts and transfers on death (for 2013, $5,250,000).

So, were the perks of Air Force One and the White House considered gifts, even discounting hyperbolic claims to reflect reality, We the People would owe the IRS some dough on our “gifts” to the President. Which, of course, is absurd.

But, luckily, these extras are not simply the largess of the people, but rather, are necessary for the President to do his job. As such, according to federal tax law and regulations, the gratis transportation, food and housing received by the our Commander-in-Chief are non-taxable fringe benefits. (Note: at one time the President actually had to pay for all this type of stuff himself, including any White House expenses, which is partially how Thomas Jefferson became so hugely in debt. This was also a financial burden on rare non-independently wealthy Presidents before the law was changed, such as James Garfield who had previously been a janitor, carpenter, and a school teacher, among other things. When he was President, he didn’t even have enough money to own a coach and had to borrow one to get around.)

Non-Taxable Fringe Benefits

Defined by the IRS as “a form of pay for the performance of services,” fringe benefits are often taxable as income to the employee who receives them. However, there are certain perks that are specifically excluded from the imposition of income tax, for regular Joe’s and the President alike:

Meals and Lodging

Although I was unable to find support for this proposition, it appears that this exclusion (26 USC § 119) would apply to the keep the White House, its staff (including a private chef) and certain meals out of the First Family’s taxable income. It provides in pertinent part:

There shall be excluded from gross income of an employee the value of any meals or lodging furnished to him, his spouse, or any of his dependents by or on behalf of his employer for the convenience of the employer, but only if – (1) meals are furnished on the business premises of the employer, [and] (2) the employee is required to accept such lodging on the business premises as a condition of his employment.

In the case of the President, this also applies to vacation homes and travel. As historian Richard Norton Smith said:

If the president goes on vacation, it’s part of the job, because the president never goes on vacation. I don’t think you can legitimately argue against the communications and everything else that travels with and surrounds a president.

That said, the President and his family are responsible for paying for certain items, including “all their own groceries, drinks, dry cleaning and even their toothpaste.” Although as one commentator wryly put it: “the private chef then prepares dinner using those groceries.”

Transportation and Security

When it comes to excluding Air Force One, the Presidential limousine and all of the security for himself and his family, Jason Jay Sharma on Quora put up his theory of how the working condition fringe exclusion applies to keep income from being imputed to the President:

If you start with Treasury Regulation 1.132-5 . . . you find the rules regarding fringe benefits. President Obama would be defined as a government employee according to (m)(7)(i) [and as such] is provided transportation for security concerns (m)(i) . . . . spouses and dependents of government employees are extended this service as it is deemed a security concern exists for them, too – all of which is excluded from Obama’s gross income, as well (m)(2)(iv).

In fact, it appears that under even a general reading of the regulation (26 CFR § 1.132-5), the security and transportation provided would be excluded from the President’s income, to wit:

Income does not include the value of a working condition fringe [which is] any property or service provided to an employee . . . to the extent that, if the employee paid for the property or service, the amount paid would be allowable as a deduction . . .

This certainly appears to be the case, as each of these expenses would be incurred as a result of his employment as Leader of the Free World. As one former White House insider noted: “The presidency is a full-time job in the 24-hour sense. He must function and be able to function as president all the time.”

Presidential Prerogative

Regardless of whether these laws and regulations or others support the President’s privilege to enjoy the perks of the office, that right remains unquestioned. As a former advisor to Presidents Carter and Ford recently said:

The idea of letting the President of the United States out without that degree of security is bizarre. I can’t think of any perk that I would consider taxable when it has to do with handling the most important, often the most secure, business of the United States.

If you liked this article, you might also enjoy our new popular podcast, The BrainFood Show (iTunes, Spotify, Google Play Music, Feed), as well as:

Bonus Facts

  • All federal employees, including the President, are prohibited from keeping gifts from foreign governments and officials that are worth more than $350. However, particularly with lavish, ceremonial gifts given by other heads of state to the President, the gifts are typically graciously accepted, then turned over to the National Archives.
  • For domestic gifts, the “President is generally free to accept unsolicited personal gifts from the American public . . . from relatives and gifts that are given on the basis of personal friendship.” However, he must “publicly disclose personal financial information, including personal gifts over minimal amounts ($350 as of 2012).”
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