Nurse Outduels IRS Over M.B.A. Tuition deduction

[Deadboy]

http://finance.yahoo.com/taxes/article/108550/nurse-outduels-irs-over-mba-tuition?mod=taxes-advice_strategy

[Dave McReynolds]

Under the Internal Revenue Code, you can deduct education expenses if (1) you are currently engaged in a trade or business (2) the education enhances your skills in that trade or business, and (3) the education does not qualify you for a new trade or business.

 

If she had studied carpet cleaning, it would have qualified her for a new trade or business, so would not have been deductible. Apparently the opinion of the court was that an MBA doesn't qualify you for anything, and since nobody takes an MBA for the pure joy of it, people must take it to enhance their skills at whatever it is that they're doing, whether that be carpet cleaning or nursing.

 

Before everyone rushes out and deducts their MBA expenses, we must wait to see if the IRS acquieses or not to the tax court decision. Unlike Circuit Court or Supreme Court decisions, the IRS can choose to agree or disagree with a tax court decision. If the IRS does not acquiese, it means they will continue to oppose the deduction of MBA expenses by nurses and carpet cleaners, and only allow such expenses for those who wear beanies with propellers on the top, hoping for a more favorable opinion on another day.

[Deadboy]

Interesting....I didn't realize the IRS could ignore the courts decision.....