Circuit panel location
In dwelling units, and guest rooms of hotels and motels, overcurrent devices, other than supplementary overcurrent protection, are not allowed to be located in bathrooms.
Bathroom. An area including a basin with one or more of the following: a toilet, a tub, or a shower.
[This message has been edited by Joe Tedesco (edited September 30, 2002).]
If this is a storage closet then it would not qualify as the items would block access.
If there was a closet just deep enough to hold the panel and the door was wide enough than a closet would qualify.
But this is up to inspector interpretation.
Also they might concider it as part of the bathroom and disqualify it on that grounds.
Simple fix - close off the existing closet door, and create new door access through an unused closet wall to the hall.