Roland E. Lewis, Jr. - Page 9

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          undergraduate engineering education which petitioner obtained in            
          this case clearly qualified him for a new trade or business.                
          See, e.g., Cristea v. Commissioner, T.C. Memo. 1985-533; Josephs            
          v. Commissioner, T.C. Memo. 1979-371; Warfsman v. Commissioner,             
          T.C. Memo. 1972-137.                                                        
               Because the education expenses do not meet the requirements            
          of section 1.162-5, Income Tax Regs., the expenses would not be             
          deductible under section 162.  Consequently, any amounts                    
          petitioner received as reimbursement therefor would not be                  
          excludable under section 132, and such amounts could not be part            
          of an accountable plan and would not be excludable under section            
          1.62-2(c)(4), Income Tax Regs.  Sec. 132(d); Biehl v.                       
          Commissioner, supra.                                                        
               We conclude that the $8,000 petitioner received in 1999 from           
          NSBE is compensation for services and is includable in his income           
          under section 61(a)(1).2                                                    
               Reviewed and adopted as the report of the Small Tax Case               
          Division.                                                                   
               To reflect the foregoing,                                              
                                             Decision will be entered                 
                                        for respondent.                               

          2Respondent determined that petitioner was liable for self-                 
          employment tax with respect to the $8,000 payment.  Petitioner              
          has not specifically disputed this determination, and nothing in            
          the record indicates that this amount was other than “self-                 
          employment income” within the meaning of sec. 1401.                         





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