*153 license in October 1968, her ACSW certification in January 1974, and her Maryland certified social worker license in September 1977.Psychiatrists, psychoanalysts, and clinical social workers are all qualified to practice psychotherapy. Psychiatrists and psychoanalysts, however, are physicians and are thereby qualified to prescribe medication. Psychoanalysts alone may practice psychoanalysis. Psychoanalysis is a form of psychotherapy which is characterized by its greater use of couch, dream analysis, and free association and involves more frequent sessions.
Personal analysis for clinical social workers is widely accepted and commonplace. *85 and other mental health professionals. Undergoing a personal psychoanalysis, however, is not a requirement for certification as a clinical social worker and does not qualify a clinical social worker to obtain any additional licenses.
At some time around March 1973, Marilyn consulted with Strathmann about undergoing psychotherapy to improve her skills as a social worker. He encouraged her in this undertaking and, in May 1973, she began psychotherapy with Lichtenberg, and in September 1974, in an attempt to uncover unconscious conflicts in her personality, she began psychoanalysis with him. *155 Lichtenberg would not have accepted her as his patient unless he believed she had a recognized medical symptom. During the course of her psychoanalysis, Marilyn received reimbursements, through her husband's group medical insurance, for a part of her expenses. Lichtenberg, however, did not testify at the trial, and from the evidence presented, we find that the severity of her symptoms at the start of her treatment was not clearly shown.
Petitioners argue that Marilyn's psychoanalysis was undertaken to maintain or improve her skills as a clinical social worker, that undergoing psychoanalysis is not a minimum qualification to be a clinical social worker, and that undergoing psychoanalysis did not qualify her for a new trade or business. Alternatively, petitioners contend they are entitled to a medical deduction for the costs of Marilyn's psychoanalysis because the treatments alleviated her symptoms of anxiety and depression.
Respondent asserts that Marilyn's expenses for psychoanalysis are not deductible business expenses because they are not expenditures for "education" within the meaning of section 1.162-5(b)(3)(i), Income Tax Regs., are not directly and proximately related to maintaining or improving skills required in her trade or profession, and were undertaken to qualify her for a new trade or business or to meet the minimum requirements of her employer. Respondent further argues that Marilyn's costs for psychoanalysis are not deductible medical expenses because they were not incurred primarily for the prevention or the alleviation of a physical or mental defect or illness.
We agree with petitioners that the costs of Marilyn's psychoanalysis are deductible business expenses. *157 OPINION
Section 162 allows a deduction for ordinary and necessary business expenses. Educational expenses are deductible business expenses when the education maintains or improves the skills required by an individual in his or her employment. Sec. 1.162-5(a)(1), Income Tax Regs. They are not deductible, however, if the education is undertaken either to meet the minimum requirements for that trade or business or to qualify for a new trade or business. Sec. 1.162-5(b)(2) and (3), Income Tax Regs.
An example in the regulations provides:
C, while engaged in the private practice of psychiatry, undertakes a program of study and training at an accredited psychoanalytic institute which will lead to qualifying him to practice psychoanalysis. C's expenditures for such study and training are deductible because the study and training maintains or improves skills required by him in his trade or business and does not qualify him for a new trade or business. [Example (4), sec. 1.162-5(b)(3)(ii), Income Tax Regs.] *87 Respondent argues that Marilyn's psychoanalysis was not "education" within the meaning of this example in the regulations. He emphasizes that Marilyn did not undertake a program of study and training at an accredited psychoanalytic institute.
We read this example in the regulations as implicitly acknowledging the educational nature of psychoanalysis for a psychiatrist (or other professional who practices psychotherapy); moreover, we disagree with the limitations respondent infers from the regulation. First, as respondent concedes, education need not be restricted to formal instruction. See, for example, deductions allowed for educational travel. Sec. 1.162-5(d), Income Tax Regs. Second, programs at psychoanalytic institutes include a student's personal analysis. See Gilmore v. Commissioner, 38 T.C. 765">38 T.C. 765 (1962). *160 In Watson v. Commissioner, 31 T.C. 1014">31 T.C. 1014 (1959), we held that an internist who underwent psychoanalysis could deduct his costs as educational expenses because he used psychiatric methods in the diagnosis and treatment of his patients' psychosomatic illnesses. Respondent attempts to distinguish Watson by emphasizing that while Watson gained techniques which he could use on his patients, Marilyn merely attempted, through psychoanalysis, to eliminate her own personality problems. A deeper self-understanding, however, contributes directly to an improvement in a therapist's diagnostic skills; a clinical social worker must be able to separate her personality problems from those of her patients so that she can properly diagnose and treat her patients' problems.
Respondent argues that any person suffering from a mental disorder can improve his or her job performance by undergoing psychoanalysis. This contention, however, overlooks the requirement of a direct and proximate relationship between the educational expenses a taxpayer wishes to deduct and his or her employment. Carroll v. Commissioner, 51 T.C. 213">51 T.C. 213 (1968), affd. 418 F.2d 91">418 F.2d 91 (7th Cir. 1969). Accord, Glasgow v. Commissioner, 486 F.2d 1045">486 F.2d 1045 (10th Cir. 1973), affg. per curiam a Memorandum Opinion of this Court. Where a professional like Marilyn practices psychotherapy and, to increase her skills, undergoes psychoanalysis, there is an integral relationship between the education involved and her employment. By contrast, where another taxpayer not primarily engaged in diagnosing and treating patients' personality problems attempts to deduct psychoanalytic expenses, the required nexus between the education and employment would be lacking, and the deduction would be disallowed.
Respondent contends that should we find that Marilyn's psychoanalysis is an educational expense, we should disallow petitioners' deduction because her psychoanalysis qualified her for a new profession or was a de facto job requirement. Essentially, respondent's argument is that Strathmann and Evans would not have hired Marilyn without her having undergone psychoanalysis and that since she did not have 2 years' experience within the last 10 years, she could not have qualified as a registered clinical social worker without that employment.
It is clear from the record, however, that psychoanalysis, while common among clinical social workers, is not a requirement, de facto or otherwise, to practicing psychotherapy. A clinical social worker is anyone with an M.S.W. degree from an accredited school of social work. See Burnstein v. Commissioner, 66 T.C. 492 (1976). As Marilyn earned an M.S.W. degree at Smith College in 1956, she was qualified in 1975 to practice psychotherapy. Additionally, Marilyn received her ACSW certification in 1974 *163 The registry of the NASW, furthermore, was created to aid social workers whose patients attempt to gain insurance reimbursement for their therapy sessions. There is nothing in the record to indicate that the registry was intended to supplant the existent criteria for qualification for clinical social workers (i.e., and M.S.W. degree). Moreover, despite not having had 2 years' experience within the past 10 years (one of the stated requirements for listing in the registry), Marilyn was nevertheless accepted by the NASW for such listing in 1976, the first year in which the registry existed.
Finally, we reject respondent's contentions that Marilyn's anxiety and depression, her medical insurance reimbursement, her increased number of sessions when changing from psychotherapy to psychoanalysis, and her expenses in relation to her earnings, all indicate the nonbusiness nature of her psychoanalysis. Whatever anxiety and depression she may have experienced we find not to be her primary motivation for seeking psychoanalysis. The insurance company's decision to reimburse petitioners for Marilyn's expenses is distinct from our determination of whether her expenses are deductible business expenses. Her increased sessions are common when changing from psychotherapy to psychoanalysis, since psychoanalysis is characterized by, among other things, its use of more frequent sessions. Lastly, the extent of her expenses in relation to her income does not indicate the nonbusiness nature of these costs since (1) it is clear that Marilyn was in the business of being a clinical social worker, and (2) the costs do not seem unusually high for psychoanalysis and appear to be reasonable in amount.
Decision will be entered under Rule 155.
Document Info
Docket Number： Docket No. 11950-78
Citation Numbers： 74 T.C. 82, 1980 U.S. Tax Ct. LEXIS 148
Judges： Tietjens
Filed Date： 4/21/1980
Precedential Status： Precedential
Modified Date： 11/14/2024
