Davis v. Comm'r of Internal Revenue

Decision Date23 February 1976
Docket NumberDocket No. 4208-73.
Citation65 T.C. 1014
PartiesKENNETH C. DAVIS AND INGER P. DAVIS, PETITIONERS v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT
CourtU.S. Tax Court
OPINION TEXT STARTS HERE

Before her enrollment as a full-time graduate student in a Ph.D. program in social work, P held various positions in social work involving the performance of casework, teaching, and research. The Ph.D. program was primarily designed for teaching and research in social work, and members of the faculty of that school are ordinarily required to have a Ph.D. degree. After she obtained such degree, she secured a full-time faculty position at that school.

1. Held, since the Ph.D. degree obtained by P was the minimum amount of education normally required for the employment she secured as a full-time permanent faculty member, the expenses thereof are not deductible under sec. 1.162-5(b)(2), Income Tax Regs.

2. Held, further, the U.S. Tax Court will not undertake to enforce the provisions of the Freedom of Information Act by requiring the Commissioner of Internal Revenue to produce certain alleged letter rulings which P claims to be relevant in a case before this Court. Kenneth C. Davis, pro se.

OPINION

SIMPSON, Judge:

The Commissioner determined a deficiency of $588.05 in the petitioners' Federal income tax for 1969. One issue has been conceded by the petitioners, and the only issue remaining for decision is whether the petitioner, Inger P. Davis, may deduct expenditures for tuition and books as business expenses under section 162(a) of the Internal Revenue Code of 1954.1

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

The petitioners, Kenneth C. Davis and Inger P. Davis, husband and wife, resided in Chicago, Ill., when they filed their petition herein. They filed a joint Federal income tax return for 1969 with the Internal Revenue Service Center, Kansas City, Mo. Mrs. Davis will sometimes be referred to as the petitioner.

The petitioner received an Artium degree in June 1948 from a school in Denmark. During the years 1950 through 1952, she was a student at the Copenhagen School of Social Work in Copenhagen, Denmark. In 1953, she was employed as a caseworker with the Child and Family Service Agency in Copenhagen. For the next 6 years, 1954 through 1959, the petitioner worked for the Ministry of Labor and Social Affairs in Copenhagen, where she was primarily engaged in research in the field of social work. Her work at the Ministry secondarily involved library administration in social work. In addition, during the years 1957 through part of 1961, she was a part-time lecturer or lecturer at the Copenhagen School of Social Work.

In 1961, the United Nations granted the petitioner a fellowship for 1 year of study in the United States in the field of social work education and training. Thereupon, she came to the United States and enrolled in the School of Social Service Administration at the University of Chicago seeking a master's degree in social work. She obtained such degree in June 1962.

After the petitioner finished her period of training in the United States, she was under an obligation to return to the Copenhagen School of Social Work and resume her position as lecturer. However, in June 1962, she married Mr. Davis and accordingly worked out an arrangement to satisfy her employment obligations to such school by agreeing to give two seminars in Copenhagen and by writing a textbook for social work students in Denmark. She gave the first seminar in September 1962, and the second, in June 1963. After the first seminar, she commenced writing the textbook and completed it by the end of 1963. The textbook was published in 1964 by the Copenhagen School of Social Work under the title ‘Socialraadgivning— Teori og Metodik’ (Social Work— Theory and Methods).

From September 1964 to March 1965, the petitioner worked for the School of Social Service Administration at the University of Chicago. Although her title was research assistant, she did no research. Her work was primarily that of a teaching assistant; she did a substantial amount of teaching by herself, in addition to assisting a professor at the school.

The petitioner wished to enter the doctoral program at the University of Chicago, and she understood that it would be necessary for her to acquire some casework practice before she could be admitted. She secured a position as a caseworker with the Chicago Child Care Society in October 1965 and continued performing such work on a full- or part-time basis until July 1967. At that time, she resigned such position so that she could enroll as a full-time student in the Ph.D. program at the School of Social Service Administration, even though the Child Care Society did not require her to obtain such degree. In her application for admission to such program, she stated that she would ‘probably not’ return to her casework position, but planned some combination of research and teaching as her future employment.

The primary purpose of the graduate program in social work, offered by the School of Social Service Administration at the University of Chicago, was to train students for teaching and research in social work. The program was not designed to give advanced training to caseworkers.

The petitioner was enrolled in the Ph.D. program from September 1967 until December 1972, when she received her Ph.D. From July 1, 1967, until October 1, 1971, she was unemployed; she spent this time pursuing her graduate studies as a full-time student. Beginning in October 1971 and continuing through June 1973, she was employed as a lecturer in the School of Social Service Administration. Such position was a nonfaculty academic position.

On October 1, 1973, the petitioner was hired as an assistant professor by the School of Social Service Administration, a position she still held at the time of the trial of this case. An assistant professorship is a full-time faculty position, and it is the general policy of the School of Social Service Administration to require a Ph.D. degree of a faculty member, although there are some exceptions.

On October 4 and November 20, 1974, the petitioner, Kenneth C. Davis, wrote to the Internal Revenue Service seeking access to the following materials based upon the Freedom of Information Act (FOIA), 5 U.S.C. sec. 552:

(1) An index of interpretations adopted by the IRS;

(2) Interpretations by the IRS bearing on the question of the deductibility of expenses incurred by one in getting a Ph.D. in 3 years; and

(3) Information about the cases involved in Rev. Rul. 68-580, 1968-2 C.B. 72.

The Chief of the Disclosure Staff of the IRS replied to Mr. Davis by letter dated March 5, 1975, stating that as of that date it was the position of the IRS that such information was exempt from disclosure because of several exemptions contained in the Freedom of Information Act. Mr. Davis then appealed from this determination to the Commissioner of the IRS by letter dated March 24, 1975. On April 23, 1975, the Commissioner denied the appeal of Mr. Davis, citing the same reasons given by the Chief of the Disclosure Staff. The Commissioner also informed Mr. Davis that he could seek judicial review of his determination in a United States District Court. There is no evidence of record in this case that Mr. Davis has sought judicial review of the Commissioner's determination. Nor is there any indication that Mr. Davis has sought discovery of such information in accordance with the Rules of Practice and Procedure of this Court.

The Commissioner, in his notice of deficiency, disallowed the petitioner's deduction in the amount of $752 for books and tuition on the ground that such expenditures are not ordinary and necessary business expenses, but are rather nondeductible personal expenses. The petitioners filed a timely petition with this Court seeking a redetermination of the deficiency determined by the Commissioner.

We must decide whether the petitioners may deduct educational expenses for the year 1969 under section 162(a), which allows a deduction for ‘all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business.’ Although section 162 does not specifically deal with the deductibility of educational expenses, the Treasury regulations do provide useful guidelines with respect to such expenditures. See sec. 1-162-5, Income Tax Regs. Such regulations have repeatedly been approved and applied by the courts in determining the deductibility of educational expenses. See Patrick L. O'Donnell, 62 T.C. 781, 783 (1974); David N. Bodley; 56 T.C. 1357, 1361 (1971); Arthur M. Jungreis, 55 T.C. 581, 588 n. 6 (1970); Jeffry L. Weiler, 54 T.C; 398, 402 (1970); Ronald F. Weiszmann, 52 T.C. 1106, 1111-1112 (1969), affd. per curiam 443 F.2d 29 (9th Cir. 1971).

The petitioners contend that Mrs. Davis' educational expenses are deductible under section 1.162-5(a)(1) of the regulations, which provides:

(a) General rule. Expenditures made by an individual for education (including research undertaken as part of his educational program) which are not expenditures of a type described in paragraph (b)(2) or (3) of this section are deductible as ordinary and necessary business expenses (even though the education may lead to a degree) if the education-

(1) Maintains or improves skills required by the individual in his employment or other trade or business, * * *

In support of his position, the Commissioner argues that the petitioner's educational expenses are not deductible as business expenses because she was a full-time student and therefore was not carrying on any trade or business in 1969. Alternatively, he argues that if the petitioner was carrying on a trade or business, it was that of a caseworker and that her educational expenses come within the nondeductible categories described in section 1.162-5(b)(2) or (3) of the regulations. The petitioners, on the other hand, argue that Mrs. Davis was...

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