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MICHAELSON v. UNITED STATES

October 23, 1961

Howard K. MICHAELSON and Fayetta M. Michaelson, husband and wife, Plaintiffs,
v.
UNITED STATES of America, Defendant



The opinion of the court was delivered by: POWELL

This action is to recover a claimed overpayment of income tax for the taxable year of 1957. Howard K. Michaelson will be referred to as though he were the only plaintiff. The amount sought is $ 123.00.

In January of 1954 plaintiff was employed by the Spokane School Board as a teacher and he has since been in that employ. Plaintiff was hired on a provisional general basis or with a provisional general certificate. Such provisional certificate is renewable for only five years. To continue teaching beyond that time a standard general teaching certificate must bo obtained. The last named certificate is obtainable only after the teacher has attended and secured credits in college courses acceptable to the State Board of Education. Without the additional credits the plaintiff would lose his employment.

 Plaintiff enrolled at Gonzaga University in September of 1954. The credits which he received in the college year of 1957 were accepted by the State Board of Education for the standard general teaching certificate which was issued to him April 15, 1958. He has continued teaching at the same position and salary.

 Plaintiff enrolled in September 1954 in a four year course which on completion entitled him to a Bachelor of Laws degree in 1958. A portion of the credits earned toward that degree, those for the college year of 1957, are the ones in question here. It is agreed that the 1957 cost of tuition, books and supplies was $ 618.00 and if this claimed deduction is allowed the disputed tax must be returned to plaintiff. If it is not allowable plaintiff takes nothing.

 Plaintiff and his wife were calendar year, cash basis taxpayers. They timely filed their Federal Income Tax returns for the years 1957 and 1958 with the Collector of Internal Revenue at Tacoma, Washington. They paid the amount of tax shown to be due by the returns as filed.

 About July 7, 1958 plaintiff filed a claim for refund. It was based on the claimed deduction for the year of 1957 of the expenses set forth above.

 The question for determination is whether the amount of $ 618.00 claimed is an allowable deduction.

 Internal Revenue Code of 1954:

 SEC. 162. TRADE OR BUSINESS EXPENSES.

 '(a) In general. -- The shall be allowed as a deduction all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business. * * *' (26 U.S.C. 1958 ed., § 162.)

 SEC. 262. PERSONAL, LIVING, AND FAMILY EXPENSES.

 'Except as otherwise expressly provided in this chapter, no deduction shall be allowed for personal, living, or family ...


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