Theodore W. Keller - Page 7

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                  Prior to 1987, section 1.162-5(d), Income Tax Regs.,                                    
            specifically provided that an individual traveling away from home                             
            primarily for educational purposes could properly deduct                                      
            expenditures for travel, including meals, and lodging under                                   
            section 162.  However, in the Tax Reform Act of 1986, Pub. L. 99-                             
            514, 100 Stat. 2118, section 142(b) of that act expressly                                     
            overruled section 1.162-5(d), Income Tax Regs.  In particular,                                
            section 142(b) of the Tax Reform Act of 1986 added section                                    
            274(m)(2) and provides that "No deduction shall be allowed under                              
            this chapter for expenses for travel as a form of education."                                 
            Section 274(m)(2) is effective for tax years after 1986.                                      
                  No regulations have been promulgated with respect to section                            
            274(m)(2).  However, the legislative history of this provision                                
            gives significant insight as to the intent of Congress in                                     
            enacting section 274(m)(2).  In H. Conf. Rept. 99-841, (Vol. 2)                               
            at II-30 (1986), 1986-3 C.B. (Vol. 4) 1, 30, the explanation for                              
            this legislation is as follows:                                                               

                        Educational travel.--No deduction is allowed for costs                            
                  of travel that would be deductible only on the ground that                              
                  the travel itself constitutes a form of education (e.g.,                                
                  where a teacher of French travels to France to maintain                                 
                  general familiarity with the French language and culture, or                            
                  where a social studies teacher travels to another State to                              
                  learn about or photograph its people, customs, geography,                               
                  etc.).  This provision overrules Treas. Reg. sec. 1.162-5(d)                            
                  to the extent that such regulation allows deductions for                                
                  travel as a form of education.                                                          







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