Comm'r of Internal Revenue

This case is not covered by Casetext's citator
United States Tax CourtMar 16, 1970
54 T.C. 490 (U.S.T.C. 1970)

Docket No. 902-68.



Yaroslaw Horodysky, pro se. J. Edward Friedland, for the respondent.

Yaroslaw Horodysky, pro se. J. Edward Friedland, for the respondent.

Petitioner migrated from Europe to Ohio in 1948, having previously been a lawyer in Poland, his former country. Petitioner was not able to practice law in Ohio, having been advised that he must graduate from law school before being admitted to the bar. In 1963, petitioner enrolled in law school and in 1967, he completed law school and passed Ohio's bar examination. Shortly thereafter, he obtained full-time employment as a practicing lawyer. Held, petitioner's expenses for attending law school do not qualify within the meaning of sec. 1.162-5(a)(2), Income Tax Regs., as a deductible educational expense.

HOYT, Judge:

Respondent determined deficiencies in petitioners' Federal income tax for the taxable years 1965 and 1966 in the amounts of $133.50 and $167.28, respectively. The sole issue presented for our decision is whether the amounts expended by petitioner Yaroslaw Horodysky during the taxable years in question in obtaining a legal education were properly deductible under section 162(a) and the regulations thereunder.

All section references are to the Internal Revenue Code of 1954 unless otherwise designated.


Petitioners Yaroslaw and Stephanie Horodysky, husband and wife, resided in Parma, Ohio, at the time the petition herein was filed. They filed their joint Federal income tax returns for the taxable years 1965 and 1966 with the district director of internal revenue at Cleveland, Ohio. Stephanie Horodysky is a party to this case solely by virtue of having filed joint returns for the taxable years in question with her husband, Yaroslaw, and the designation of ‘petitioner’ will hereinafter refer only to Yaroslaw.

In 1937, petitioner, a resident of Poland, received his law degree and proceeded to practice law in that country. His practice of law came to a halt in September of 1938 when the area of Poland in which he resided came under the rule of Soviet Russia.

In 1947, petitioner completed his studies and received a German degree of law. He never practiced law in Germany, however, having decided shortly after receiving his law degree to migrate to the United States.

In 1948, petitioner arrived in the United States and settled in Ohio, where, lacking, inter alia, the essential educational prerequisites, he was precluded from the practice of law. In order to support his family at this time, petitioner accepted any odd job he could find. The exigencies of supporting his family, up to 1962, did not leave petitioner with the time or financial means to undertake the necessary education leading to qualifying him to practice law in Ohio.

In 1962, petitioner applied to the Supreme Court of Ohio for admission to the bar of that State. The court denied petitioner's request for admission to the State bar, and informed him that the completion of a formal law school curriculum was a prerequisite to the admission to such bar.

In 1963, petitioner enrolled as a night student in Cleveland Marshall Law School. In 1967, having completed a full curriculum of courses, petitioner received his law degree from the Cleveland Marshall Law School. Upon the receipt of his law degree, petitioner applied to take the bar examination. He thereafter sat for the bar examination and passed it. Shortly after passing the bar, petitioner gained full-time employment as a practicing attorney.

During the taxable years 1965 and 1966, at the time he was enrolled in night law school, petitioner was employed as a bricklayer for various construction companies. On his tax returns for those years, petitioner deducted the respective amounts of $705.90 and $880.42 as educational expenses, with the attached explanations that these expenses were incurred to fulfill the conditions for the retention of his status as a lawyer, attained originally in Europe. On both these returns, petitioner also deducted certain expenses related to his employment as a bricklayer.

In his notice of deficiency to petitioners with respect to the taxable years 1965 and 1966, respondent disallowed the deduction of the aforementioned amounts of educational expenses, explaining that petitioners had failed to establish that these expenses qualify as ordinary and necessary business expenses within the meaning of section 162(a).


Insofar as it is pertinent to the issue before us, section 1.162-5(a) of the Income Tax Regulations, prior to its amendment on May 1, 1967, provided the following:

Although he could have relied on the May 1, 1967, amended regulations, T.D. 6918, 1967-1 C.B. 36, relating to educational expenses, petitioner elected at trial to have the regulations in force during the years in question applied to his case. The disposition of this case would not, however, have differed had he relied on the amended regulations.

Sec. 1.162-5 Expenses for education.

(a) Expenditures made by a taxpayer for his education are deductible if they are for education (including research activities) undertaken primarily for the purpose of:

(2) Meeting the express requirements of a taxpayer's employer, or the requirements of applicable law or regulations, imposed as a condition to the retention by the taxpayer of his salary, status or employment.

* * * Expenditures for education of the type described in subparagraph (2) of this paragraph are deductible under subparagraph (2) only to the extent that they are for the minimum education required by the taxpayer's employer, or by applicable law or regulations, as a condition to the retention of the taxpayer's salary, status, or employment. * * *

Petitioner contends that he fits squarely within the above-quoted regulation in that the law school expenses here in issue were incurred to meet the requirements of applicable law or regulations which were imposed as a condition to his retention of the status he had attained in Europe as a lawyer. We disagree.

We think that the part of the regulation on which petitioner relies requires the interpretation that the ‘status' referred to had to exist at the time the educational expense in question was incurred. In Ohio in 1965 and 1966, petitioner did not have any status as a lawyer to retain; the completion of a formal law school curriculum and passing Ohio's bar examination amounted to his initial acquisition of this status within that State. See Rev. Rul. 60-97, exs. 6 and 8, 1960-1 C.B. 77. The fact that petitioner has since regained a status which he once enjoyed in another country many years before, yet abandoned by leaving that country, could not, in any proper sense, call for the application of this regulation upon which he relies.

See Ansis Mitrevics, T.C. Memo. 1963-67, where the Court held, in a situation closely analogous to ours, that the taxpayer, who had attained the status of doctor of dental surgery in Europe, did not have any ‘status' to retain within the meaning of sec. 1.162-5(a)(2), when she incurred the expenses of attending dental school in this country.

In essence, petitioner has commendably invested much of his time to meet the minimum requirements for qualification in a new trade or business in this country, and the expenses thereof, being of a personal nature, cannot properly be deducted from his taxable income for any of the years in question. Sec. 262; sec. 1.162-5(b) (as unamended prior to May 1, 1967), Income Tax Regs.; N. Kent Baker, 51 T.C. 243 (1968); Nathaniel A. Denman, 48 T.C. 439, 445-446 (1967). (See also Arthur E. Ryman, Jr., 51 T.C. 799 (1969), holding that bar admission fees are capital expenditures.)

The main case cited by petitioner as authority for his position, Hill v. Commissioner, 181 F.2d 906 (C.A. 4, 1950), reversing 13 T.C. 291 (1949), is clearly distinguishable on its facts from the instant case. Involving an already established Virginia schoolteacher who complied with the law of that State requiring attendance at summer school as a prerequisite for the renewal of her teaching certificate, the Hill case only serves to present an excellent example of a factual situation which fits within the regulation upon which petitioner relies; it is obvious that the facts of Hill are clearly inapposite to the facts of the case before us.

Decision will be entered for the respondent.

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