Coughlin v. Commissioner
203 F.2d 307 (2d Cir. 1953)
Couglin was a tax attorney.
In order to stay current on the subject, he attended a training seminar in
tax law at NYU.
He didn't need to attend the
seminar in order to keep his job or retain his bar license, but it did
make him a better tax attorney.
When he filed his taxes,
Couglin deducted the $305 for the training as a business expense. The IRS denied the deduction. Coughlin
The IRS claimed that the
expenses were non-business expenses because it was not necessary for
Couglin to attend the seminar.
The Tax Court denied the
deduction. Couglin appealed.
The Tax Court looked to the
applicable section of the tax code (now known as 26 U.S.C. §162(a)) and found that in order to be deductible
an expense must be related to a "trade or business." In this
case they denied the deduction "because of the educational and
personal nature of the object pursued by the petitioner."
The Appellate Court reversed
and allowed the deduction.
The Appellate Court looked
to IRS's tax regulations (T.R. 111 §29.23(a)-5) and noted that they explicitly allowed
deductions for dues to professional societies and subscriptions to professional
journals etc. The Court found that going to a seminar was similar to
these expressly characterized allowable deductions. Therefore it should
be deductible also.
That's the statutory
interpretation canon of ejusdem generis (aka "of the same kind").
One could argue that Coughlin
was involved in continuing education, and that sounds a lot like
'maintenance'. And maintenance is generally deductible as a business
As opposed to getting a
college degree in the first place, which is more like an 'improvement'
which is not typically deductible as a business expense.
See Midland Empire
Packing Co. v. Commissioner (14 T.C.
If that tax seminar was about
how to get a deduction for educational expenses, it was totally worth the