Ford v. Comm'r of Internal Revenue

• Decision Date: 15 September 1971
• Docket Number: Docket No. 3996-70.
• Citation: 56 T.C. 1300
• Parties: JOHN C. FORD, PETITIONER v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT
• Court: U.S. Tax Court

56 T.C. 1300

JOHN C. FORD, PETITIONER

v.COMMISSIONER OF INTERNAL REVENUE, RESPONDENT

Docket No. 3996-70.

United States Tax Court

Filed September 15, 1971.

John C. Ford, pro se.

Allan D. Hill, for the respondent.

Petitioner taught remedial English and developmental reading under a provisional credential from the State of California until June 1967. In August 1967 he went to Norway for 1 year and studied anthropology and linguistics at the University of Oslo. In the fall of 1967 he applied for work with USDESEA as a substitute teacher, and taught 1 day in December. He applied in late 1967 for employment with California schools to begin in the fall of 1968, and began teaching English and social studies in a high school in September 1968. Held, (1) petitioner was in the trade or business of teaching while in Norway. Furner v. Commissioner, 393 F.2d 292 (C.A. 7, 1968), followed; (2) the studies did not meet the minimum educational requirements for qualifications as a teacher; (3) the studies were directly related to maintaining or improving his skills as a classroom teacher of English, Spanish, and social studies; and (4) petitioner is entitled to deduct his expenses for travel, books and supplies, food, and lodging under sec. 162(a), I.R.C. 1954, and the applicable regulations.

DAWSON, Judge:

This case was heard in Los Angeles by Commissioner Charles R. Johnston. We have adopted his findings of fact and conclusions.

Respondent determined a deficiency of $274 in petitioner's Federal income tax for the year 1967. At issue is whether petitioner is entitled to a deduction under section 162(a), I.R.C. 1954, and the regulations promulgated thereunder, for certain expenses incurred by him when he undertook a course of graduate study at the University of Oslo in Norway in the fall of 1967. The answer depends upon (1) whether he was engaged in the trade or business of teaching after June 1967 and (2) whether his studies in Norway were directly related to maintaining or improving his skills as a teacher of English, Spanish, and social studies.

FINDINGS OF FACT

Some of the facts have been stipulated and are found accordingly.

John C. Ford, (herein called petitioner) was a resident of Los Angeles, Calif., when he filed his petition in this proceeding. His individual Federal income tax return for 1967 was filed with the Director, Office of International Operations, Washington, D.C.

Petitioner received a bachelor of arts degree with a major in social studies from Los Angeles State College in 1962. In order to receive a Standard Teaching Credential, he needed, in addition to his bachelor's degree, a master's degree in his field of teaching or 24 credit units of educational courses and a year and a half of student teaching subject to certain waivers. Persons who have only partially met the requirements for a Standard Teaching Credential established by the State Board of Education are issued provisional credentials. In 1963 petitioner completed the 24 credit units of educational courses required for a regular teaching certificate and taught under a provisional credential, dated December 19, 1963, and valid until June 30, 1964, as a substitute, or part-time teacher at LaSalle Junior High School and Antioch Girl's School in Pasadena and at Catwell Senior High School in Montebello and at Queen of Angels School in Los Angeles. The subjects taught by the petitioner in those schools were developmental reading or speed reading. Petitioner also taught as a substitute in 1963 at Downey Union High School District, Compton Union High School District, and Alhambra Union High School District.

In 1964, 1965, and 1966 petitioner continued teaching under provisional credentials as a 20-day substitute or replacement with the various Union high school districts mentioned and began teaching remedial English at an evening class at Pasadena City College. He also began a course of studies in 1964 in a graduate program leading to a Ph.D in anthropology at the University of California at Los Angeles, which he continued in 1965 and 1966.

In 1967, the petitioner, pursuant to a provisional credential authorizing him to teach history, English, or Spanish, was employed as a regular, full-time teacher by Compton Union High School District for the semester which began in January and ended in June 1967. In order to avoid being offered a contract to teach at Compton for the fall term of 1967, he moved with his personal effects from his apartment so that the school could not reach him to make such an offer. He continued to rent his apartment while concealing himself in another from the Compton administrative office until he went abroad. He was not employed as a teacher at Compton Union High School after June 1967.

In August 1967, petitioner traveled to Oslo, Norway, via New York and England. Upon his arrival in Oslo he took language courses, primarily Norwegian, under an extension program of the University of Oslo. He also applied at that time for appointment as a substitute elementary school teacher with the USDESEA, a dependents school operated by the Department of the Army. He was notified by the Department of the Army that, effective November 22, 1967, he was qualified to teach as a substitute teacher for elementary grades in the dependents school USDESEA at Oslo, Norway. He taught 1 day in December 1967 in that capacity. In December 1967, he registered at the University of Oslo under a program leading toward a Ph.D in the field of anthropology. After registering at the University of Oslo, petitioner took courses in language and culture, linguistic analysis, and preparatory logic arithmetic, the last being required as a condition to entrance as a full-fledged student.

In November or early December 1967 petitioner wrote the Alhambra Union High School District inquiring about openings in the language department and indicating a desire to return to teach there in the 1968-69 school year. He was informed by letter dated December 12, 1967, that his letter would serve as a renewal of his application in the Alhambra District even though at that time there were no openings in the language department. He completed his studies at the University of Oslo in July 1968, and returned to the United States.

In September 1968, petitioner accepted employment as a regular teacher of English and social studies at San Gabriel High School. After teaching for 1 school year at San Gabriel, he received a Standard Teaching Credential in 1969.

On his 1967 Federal income tax return the petitioner claimed a deduction for the following education expenses which were disallowed by respondent:

+-------------------------+
                ¦Travel             ¦$640 ¦
                +-------------------+-----¦
                ¦Books and supplies ¦200  ¦
                +-------------------+-----¦
                ¦Food and lodging   ¦500  ¦
                +-------------------+-----¦
                ¦                   ¦1,340¦
                +-------------------------+
                

Petitioner was carrying on his trade or business of teaching in California and Norway in 1967. He traveled to Norway primarily to obtain further education, and his studies while there aided in maintaining and improving his skills as a classroom teacher of English, Spanish, and social studies.

OPINION

At the outset we note that the regulations relating to educational expenses in effect during the taxable year 1967 were issued in 1958. In 1967 revised regulations were issued, and the respondent has since ruled that taxpayers may, with respect to taxable years beginning before January 1, 1968, rely on either the old or the new regulations. Rev. Rul. 68-191, 1968-1 C.B. 67. In his brief the petitioner appears to rely only on the 1967 regulations. We recognize his right to make the election. Arthur M. Jungreis, 55 T.C. 581, 587-588 (1970).

In late 1967 the petitioner began doctoral studies in linguistics and anthropology at the University of Oslo and he deducted on his Federal income tax return for that year the costs of travel, books and supplies, and meals and lodging, under the provisions of section 162(a),¹ claiming that they constituted ordinary and necessary business expenses. Respondent makes a three-pronged attack on the claimed expenses: (1) That petitioner was not actively carrying on his trade or business as a teacher when the expenses were incurred, but was unemployed; (2) that such expenditures were incurred by petitioner to meet the minimum educational requirements for qualification as a teacher, sec. 1.162-5(b)(2), Income Tax Regs.; and (3) that the courses taken by petitioner were not directly related to maintaining or improving skills required by him in his employment.

Respondent does not argue that the petitioner was not in the trade or business of teaching from 1963 until June 1967, while he taught under a provisional certificate. In June 1967, petitioner left his position as a teacher in the Compton Union High School District, and in August went to Norway. Respondent contends that in June 1967 the petitioner had voluntarily and indefinitely abandoned any active pursuit of the teaching profession.

Mere membership in a profession is not in itself the ‘carrying on’ of a trade or business. Peter G. Corbett, 55 T.C. 884 (1971); Henry G. Owen, 23 T.C. 377 (1954). However, this petitioner has shown more than mere membership in the teaching profession after June 1967. Upon arriving in Oslo, he applied for appointment as a substitute teacher with USDESEA. Between November 22, 1967, when he received his appointment, and the end of 1967, petitioner actually taught for 1 day and was available for substitute teaching at other times. In November or December he wrote to the Alhambra Union High School District seeking employment for the fall of 1968. And, in September 1968, he did in fact return to California to teach English and social studies at San Gabriel High School.

In Furner v. Commissioner, 393 F.2d 292 (C.A. 7, 1968), reversing 47 T.C. 165 (1966), the taxpayer did not cease to be a teacher during the 1-year period when she...