Carroll v. Comm'r of Internal Revenue, Docket No. 3722-66.

• Decision Date: 31 October 1968
• Docket Number: Docket No. 3722-66.
• Citation: 51 T.C. 213
• Parties: JAMES A. AND ISABELLE CARROLL, PETITIONERS v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT
• Court: U.S. Tax Court

51 T.C. 213

JAMES A. AND ISABELLE CARROLL, PETITIONERS

v.COMMISSIONER OF INTERNAL REVENUE, RESPONDENT

Docket No. 3722-66.

Tax Court of the United States.

Filed October 31, 1968.

James A. Carroll, pro se.

Sheldon S. Rosenfeld, for the respondent.

Petitioner, while employed as a policeman, undertook a general college education as a philosophy major. Held, amounts spent for such education are personal expenses not deductible from gross income as ordinary and necessary expenses of carrying on a trade or business.

SIMPSON, Judge:

Respondent determined a deficiency in petitioners' 1964 income tax in the amount of $207.17. The issue for decision in this case is whether the petitioner, James A Carroll, is entitled to deduct certain educational expenses.

FINDINGS OF FACT

Some of the facts have been stipulated, and those facts are so found.

Petitioners, James A. and Isabelle Carroll, are husband and wife, who reside in Chicago, Ill., at the time the petition was filed in this case. They filed their 1964 joint Federal income tax return, using the cash receipts and disbursements method of accounting, with the district director of internal revenue in Chicago. Mr. Carroll will be referred to as the petitioner.

In their 1964 return, it is reported Mr. Carroll is a policeman and his wife is a secretary. One of the itemized deductions on the return is the petitioner's educational expense of $720.89, which is explained on an attachment to the return as:

EDUCATION EXPENSE

Expense relative to improving job skills to maintain my position as a detective which is not a civil service rank and subject to monthly review to ascertain if performance is up to standards set forth by the Superintendent of police before a U.S. Senate Committee (sic) relative to policy ability to cope with Organized Crime.

The petitioner commenced employment with the Chicago Police Department in 1957, and during the year 1964, he was employed as a detective. The petitioner left the Chicago Policy Department during the year 1966.

In December 1962, the petitioner applied for admission to De Paul University, stating in his application that he wished to prepare for the profession of law. In 1963, he became an enrolled student in the major field of philosophy, and the courses he took were in accord with the prerequisites set forth by the university for entrance to law school. In September 1966, the petitioner entered De Paul University College of Law.

During the year 1964, the petitioner paid De Paul University $720.89. During that year, he was enrolled in the courses set forth below:

+-----------------------------------------------------------+
                ¦Department       ¦Course                                   ¦
                +-----------------+-----------------------------------------¦
                ¦English          ¦Introduction to the Plays of Shakespeare.¦
                +-----------------+-----------------------------------------¦
                ¦History          ¦Making of Modern America Since 1865.     ¦
                +-----------------+-----------------------------------------¦
                ¦Philosophy       ¦Philosophy of Science.                   ¦
                +-----------------+-----------------------------------------¦
                ¦English          ¦English Literature, 1660-1800.           ¦
                +-----------------+-----------------------------------------¦
                ¦Philosophy       ¦History of Modern Philosophy.            ¦
                +-----------------+-----------------------------------------¦
                ¦Political Science¦American Government.                     ¦
                +-----------------------------------------------------------+
                

The Chicago Policy Department did not have in effect during the year of 1964 an order requiring policemen to attend college as a condition to the retention of the employee's salary, status, or employment. However, the department did have in effect an order that encouraged policemen to attend colleges and universities, which provided in pertinent part:

5 July 1963

DEPARTMENT GENERAL ORDER NO. 63-24

Subject: Extra-departmental education

I PURPOSE

To encourage members of the department to further their extra-departmental education.

II DEFINITION

Extra-departmental education, for the purposed of this order, is defined as enrollment in a recognized academic institution which will increase the member's value to the Department.

III EXEMPTION POLICY

A. Unit commanders will exempt members of their command who enroll in junior college, college or university courses from the normal shift rotation schedule in such a manner as not to interfere with either effective police operations or class attendance. A permanent watch assignment will be made when possible; otherwise the member will rotate between watches which do not conflict with the class schedule.

IV REQUEST PROCEDURE

A. Members may request the exemption described in paragraph III, A., by submitting a request to their commanding officer containing the following specific information:

1. Name, employee number, star number and assignment.

2. Name of school in which the member is enrolled or from which he has received formal notification of acceptance.

3. A copy of the class schedule showing all pertinent dates, times, course names and number of credits to be earned.

4. Number of credits already completed and the degree or certificate sought.

B. A request will be denied when it is based on a course of study that will not increase the member's value to the department.

Distribution: All personnel

I have read and understand the above order.

Signature: (s) JAMES A. CARROLL

Date: 16 July 63

At the time the petitioner enrolled in De Paul University, he submitted the proper written request and reports to his commanding officer, and he received the benefit of the exemption policy during all of 1964 while he was attending the university.

OPINION

The issue presented is whether the petitioner's educational expenses may be deducted as a business expense under section 162(a) of the Internal Revenue Code of 1954¹ or whether the education was personal so that a deduction for the expenses is denied by section 262.

There are many expenses which are helpful, even essential, to one's business activities, but which are not deductible in our tax system. Commuting to one's place of employment is certainly helpful to the performance of one's work, but the commuting costs are not deductible. John C. Bruton, 9 T.C. 882 (1947). One's clothes are also essential if he is to work in society, but their cost is not deductible, unless the clothing is not suitable for personal use. Betsy Lusk Yeomans, 30 T.C. 757 (1958). The charges of a babysitter who is employed so that a mother may work outside the home are not deductible as a business expense. Mildred A. O'Connor, 6 T.C. 323 (1946). In rejecting the argument that all expenses essential to one's employment are deductible, this Court has said:

This thought evokes an array of interesting possibilities. The fee to the doctor, but for whose healing service the earner of the family income could not leave his sickbed;¹ the cost of the laborer's raiment, for how can the world proceed about its business unclothed; the very home which gives us shelter and rest and the food which provides energy, might all be an extension of the same proposition be construed as necessary to the operation of business and to the creation of income. Yet these are the very essences of those ‘personal’ expenses the deductibility of which is expressly denied. * * * (Footnote omitted. Henry C. Smith, 40 B.T.A. 1038 (1939), affirmed per curiam 113 F.2d 114 (C.A. 2, 1940).)

Hence, the fact that the petitioner's education is helpful to him in the performance of his employment does not establish that its cost is deductible as a business expense.

This Court has considered whether the cost of an elementary education is deductible and held that it is not. Ronald D. Kroll, 49 T.C. 557 (1968). In that case, a child actor attended a private school because its educational program was more adaptable to his working schedule. It was argued that the cost of attending the private school was a deductible expense because it would not have been incurred but for his acting career. However, it was held that such expense was not deductible because he secured a general education, the cost of which is personal and not a deductible business expense.

A general college education, such as that undertaken by the petitioner, may not be as clearly a personal expense as an elementary education, but it seems to us that both are essentially the same type of expense. Millions of people must secure a general college education before they commence their life's employment, and it is generally accepted that obtaining such education is a personal responsibility in preparing for one's career. Should the result be any different for the man who goes to college after commencing work? Though his perseverance is to be admired, we do not believe that he should receive tax deductions not available to those who complete their general college preparation before beginning their career. Furthermore, a general college education has more than economic utility. It broadens one's understanding and increases his appreciation of his social and cultural environment.

Education is a companion which no misfortune can depress, no crime can destroy, no enemy can alienate, no despotism can enslave. At home a friend, abroad an introduction, in solitude a solace, and in society an ornament. It chastens vice, it guides virtue, it gives, at once, grace and government to genius. Without it, what is man? A splendid slave, a reasoning savage. (Joseph Addison, The Spectator, (Nov. 6, 1711).)

For these reasons, we conclude that section 262 applies to the petitioner's expenses of obtaining a general college education. Although such an education may have been helpful in his employment, securing it was a personal responsibility, and it provided extensive personal rewards.

In addition, we believe that when the petitioner's educational expenses are examined in the light of section 162 and the...