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because those types of education expenses “are personal
expenditures or constitute an inseparable aggregate of personal
and capital expenditures and, therefore, are not deductible”.
Sec. 1.162-5(b)(1), Income Tax Regs. These nondeductible
educational expenses are those incurred to meet the minimum
educational requirement for qualification in a taxpayer’s trade
or business and those which qualify a taxpayer for a new trade or
business. Sec. 1.162-5(b)(2) and (3), Income Tax Regs.
A. Minimum Education Requirement
In seeking the H-1B specialty worker visa for petitioner,
Refreshment Brands described her responsibilities in marketing
terms. The company also stated that the general education
requirement was a bachelor’s degree in a related field and that
the specific education requirement was a bachelor’s degree in
business administration or the equivalent. Before receiving her
M.B.A., petitioner had an engineering degree but no business
degree. The engineering credential satisfied the general
education requirement but not the job-specific requirement of a
degree in business administration. Only her M.B.A. qualified her
for the job. Accordingly, we find that her M.B.A. education was
necessary to satisfy the minimum education requirements for her
new trade or business of marketing.
Petitioner’s counsel argued that respondent gives too much
emphasis to petitioner’s title at Refreshment Brands and that her
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Last modified: March 27, 2008