Larson v. Commissioner ( 1950 )

Knut F. Larson, Petitioner, v. Commissioner of Internal Revenue, Respondent

Larson v. Commissioner

Docket No. 23311

United States Tax Court

15 T.C. 956; 1950 U.S. Tax Ct. LEXIS 7;

December 28, 1950, Promulgated

---

Decision will be entered for the respondent.

Expenses incurred for evening engineering courses, held not deductible by petitioner, who was employed during the tax year in an engineering capacity. Hill v. Commissioner (CA-4), 181 Fed. (2d) 906, distinguished.

Knut F. Larson, pro se.

Joseph F. Rogers, Esq., for the respondent.

Opper, Judge.

---

OPPER

Petitioner seeks redetermination of a deficiency in income tax of $ 134 for 1945. The sole issue is whether respondent correctly disallowed deductions for educational expenses. Some of the facts have been stipulated.

FINDINGS OF FACT.

The stipulated facts are hereby found.

Petitioner, a resident of Scarsdale, New York, filed his returns with the collector of internal revenue for the fourteenth district of New York.

In November 1942 petitioner became employed as a mechanic by the Ward Leonard Electric Co., Mount Vernon, New York. The company suffered a wartime shortage of skilled personnel. In September 1943 petitioner registered in the New York University Evening Division, School of Engineering, where he thereafter took evening courses. He continued to work for the same company and in 1945 was employed as an industrial engineer. In November 1945 he left the company's employ.

Petitioner spent $ 479.83 for tuition fees, $ 21.49 for books, $ 2 for paper, and $ 133.17 for transportation to and from school by subway, bus and street car, the total amounting to $ 636.49. These amounts were paid by petitioner during the taxable year 1945 while he was enrolled in the College of Engineering of New York University, studying for his Bachelor's Degree in Administrative Engineering. In 1948 petitioner received the degree of Bachelor of Administrative Engineering.

Petitioner's tax return for 1945 reported total wages of $ 2,553.01, and claimed the sum of $ 636.49 as "engineering expenses."

OPINION.

Petitioner's claim to be entitled to a deduction as "engineering expenses" of sums paid for tuition and other outlays in connection with attendance at a university must be disallowed as being expenditures "for educational purposes and of a personal character." Appeal of T. F. Driscoll, 4 B. T. A. 1008; see also O. D. 892, 4 C. B. 209 (1921); O. D. 984, 5 C. B. 171 (1921)."Reputation and learning are akin to capital assets, like the good will of an old partnership * * * For many, they are the only tools with which to hew a pathway to success. The money spent in acquiring them is well and wisely spent. It is not an ordinary expense of the operation of a business." Welch v. Helvering, 290 U.S. 111">290 U.S. 111.

Even applying the distinction relied upon in Hill v. Commissioner (CA-4), 181 Fed. (2d) 906, reversing 13 T. C. 291, the present claim would require disallowance. In that case the opinion, referring to O. D. 892, supra, distinguishes it as not controlling "when, as in the instant [Hill] case, the attendance at summer school was undertaken essentially to enable a teacher to continue her * * * career in her * * * existing position," the Court having already remarked that "Clearly, the very logic of the situation here shows that she went to Columbia to maintain her present position, not to attain a new position; to preserve, not to expand or increase; to carry on, not to commence."

Here it is stipulated that the amounts in question "were paid by the petitioner * * * while he was enrolled in the College of Engineering of New York University, studying for his Bachelor's Degree in Administrative Engineering"; and it is petitioner's own claim that these studies and the subsequent academic award accounted for increases in his earning capacity. Thus, whether the expenses were undertaken as purely personal matters to improve petitioner's education and cultural attainments or in order to achieve improvement in his professional status, a choice we are not now required to make, the result would be identical. For the reason stated,

Decision will be entered for the respondent.