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carrying on any trade or business. For an expense to be
“ordinary” the transaction that gives rise to the expense must be
of a common or frequent occurrence in the type of business
involved. Deputy v. du Pont, 308 U.S. 488, 495 (1940). To be
“necessary” an expense must be “appropriate and helpful” to the
taxpayer’s business. Welch v. Helvering, 290 U.S. at 113-114.
The performance of services as an employee constitutes a trade or
business. See sec. 1.162-17(a), Income Tax Regs. The employee
must show the relationship between the expenditures and the
employment. See Evans v. Commissioner, T.C. Memo. 1974-267. The
taxpayer bears the burden of substantiation. Hradesky v.
Commissioner, 65 T.C. 87, 90 (1975), affd. per curiam 540 F.2d
821 (5th Cir. 1976).
Expenditures made by a taxpayer for education are
deductible, with certain exceptions not relevant here,2 if the
education either: (1) Maintains or improves skills required in
an individual’s employment or other trade or business; or (2)
meets the express requirements of the individual’s employer, or
meets the requirements of applicable law or regulations, imposed
as a condition to the retention of employment, status, or rate of
compensation. See sec. 1.162-5(a), Income Tax Regs.
2The courses given by Worcester College do not meet the
minimum educational requirements of petitioner’s employment.
They do not qualify petitioner for a new trade or business.
Thus, deductions associated with the courses are not prohibited
under sec. 1.162-5(b), Income Tax Regs.
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