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maintains or improves skills required by the taxpayer in his
employment, or (2) meets the express requirements of the
taxpayer’s employer, or of applicable law or regulations, imposed
as a condition to the retention by the taxpayer of an established
employment relationship, status, or rate or compensation. Sec.
1.162-5(a), Income Tax Regs. However, expenses which fall into
either of these categories are nevertheless not deductible if the
education (1) is required in order to meet the minimum
educational requirements for qualification in the taxpayer’s
employment, or (2) qualifies the taxpayer for a new trade or
business. Sec. 1.162-5(b), Income Tax Regs.
The first category of deductible expenses is for education
which maintains or improves skills required by the taxpayer in
his employment. Sec. 1.162-5(a)(1), Income Tax Regs. The
regulations state that this category of expenses “includes
refresher courses or courses dealing with current developments as
well as academic or vocational courses”. Sec. 1.162-5(c)(1),
Income Tax Regs. We find that the M.B.A. program did not serve
to maintain or improve skills required in petitioner’s employment
within the meaning of the regulations. The courses which
petitioner completed as part of the M.B.A. program were varied
and encompassed a large number of business fields: The courses
covered areas including economics, management, finance,
accounting, technology and computer networks, marketing,
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Last modified: May 25, 2011