31 T.C. 1017 (1959)

Educational expenses are deductible as ordinary and necessary business expenses if they maintain or preserve a teacher’s current position but are not deductible if they are for obtaining a new or more advanced position.

Summary

The Seibolds, both teachers, sought to deduct educational expenses. Richard Seibold sought to deduct the cost of a European tour, for which he received two credits toward his in-service requirements. Melba Seibold sought to deduct the cost of the same tour, for which she received six credit hours, as well as the costs of coursework at New York and Columbia Universities. The Tax Court held that Richard’s expenses for the European tour were not deductible because the trip was not an ordinary or necessary expense for maintaining his teaching position. The court also denied Melba’s deduction for all expenses, stating that the primary purpose of her education was to obtain a permanent teaching certificate, not to maintain her existing position, distinguishing her situation from cases involving teachers maintaining existing positions.

Facts

Richard and Melba Seibold, husband and wife, were both music teachers in Buffalo, New York. New York State regulations required teachers to obtain credits for in-service study and training to maintain their teaching certificates. In 1952, the Seibolds took a European tour. Richard received two in-service credits for submitting a report on his trip. Melba attended a two-week course at the University of Geneva during the tour and earned six credit hours, which, combined with credits from coursework at New York and Columbia Universities, enabled her to obtain a permanent teaching certificate to teach music. Prior to obtaining her permanent certificate, she taught music under a temporary certificate.

Procedural History

The Commissioner of Internal Revenue determined a deficiency in the Seibolds’ income tax for 1952, disallowing their deduction for educational expenses. The Seibolds petitioned the United States Tax Court to challenge the deficiency.

Issue(s)

1. Whether Richard Seibold’s expenses for the European tour were deductible as ordinary and necessary business expenses under I.R.C. § 23(a)(1)(A).

2. Whether Melba Seibold’s expenses for the European tour and university coursework were deductible as ordinary and necessary business expenses under I.R.C. § 23(a)(1)(A).

Holding

1. No, because the European tour was not an ordinary and necessary expense for Richard’s business.

2. No, because Melba’s expenses were incurred to obtain a permanent teaching certificate, representing an advancement and not the maintenance of her current position.

Court’s Reasoning

The court applied I.R.C. § 23(a)(1)(A), which allows deductions for ordinary and necessary business expenses. The court referenced previous case law, particularly Hill v. Commissioner, where educational expenses were deemed deductible because they were incurred to maintain a teacher’s existing position. The court distinguished Hill, noting that the teacher’s expenses there were