Smith v. Commissioner

                       UNITED STATES TAX COURT

PIERCE, Judge: Respondent determined a statutory deficiency of $269.93 in the income tax of the petitioner for her taxable calendar year 1964 - of which, after allowance of credit for withholdings, the unpaid balance was $127.73. Petitioner contends that, after credit for said withholdings, there is an overpayment of tax in the amount of $142.20, as claimed on the return.

The sole issue for decision is whether the petitioner, who was and had been for many years a high school teacher of Latin and French, is entitled to deduct as an expense of maintaining and improving her skills in her employment, the amount of $1,251.06 which she expended during the taxable year in traveling to various places in the Mediterranean area that had a relationship to the courses she taught.

Findings of Fact

Some of the facts have been stipulated. The stipulation of facts and all exhibits identified therein are incorporated herein by reference.

The petitioner, Gladys M. Smith, is an unmarried individual who at the time of filing the petition herein was a resident of Panora, Guthrie County, Iowa. She filed an individual income tax return for the year involved with the district director of internal revenue at Des Moines.

During the taxable year and for many years prior thereto, petitioner was employed as a full-time teacher of Latin and French in the Harlan Community High School at Harlan, Iowa. She held a B.A. degree; and in addition, through extra periods of study and travel, she had acquired up to the time of the trial herein, approximately 60 hours of college credits. She also held a permanent professional teacher's certificate issued by the State of Iowa.

During the period from December 16, 1964, through January 4, 1965, petitioner participated in a Mediterranean tour arranged by Swiss Air Transport Co., Ltd. Because said period began approximately a week prior to the Harlan School's midyear vacation, and ended after the close of such vacation, the school board made advantageous arrangements for her to take the trip; and it also paid her salary in full during the absence.

To join the scheduled tour, petitioner first traveled by air from Chicago to Zurich, Switzerland; and from there she went by way of Milan to Genoa where she embarked for a two-week trip on a French steamship. The captain and the crew of this ship were French; the prevailing language used by the passengers and in all ship announcements and menus, was French; and French customs were observed throughout. Petitioner devoted most of each day of the trip to speaking French, attending French lectures, or taking shore excursions to places that had an important part in the history, art or architecture of either France or the Ancient Roman Empire. We deem it unnecessary to review here, either the details of petitioner's itinerary or the many things and places she observed - all of which were reviewed and described extensively in petitioner's testimony. Suffice it to say, that the principal areas she visited included: Switzerland, Italy, Sicily, Greece, Crete, the Isle of Patmos and Israel.

During the tour, petitioner procured various books, pictures, and maps which she intended to use, and thereafter did use, in conducting her school classes and in stimulating interest in her French and Latin Clubs.

The amount which petitioner expended in the taxable year for said trip was $1,251.06 - consisting of the following:

 Cost of Swissair tour                                       $1,070.00

* * * Expenses Required to Maintain Status and Skill in Teaching:

* * *

Mediterranean Cruise, Dec. 16, 1964 to Jan. 4, 1965, Inc., by Plane and French boat to visit Italy, Sicily, Crete, and other Mediterranean Portions of the Ancient Roman Empire to study Roman Roads, Roman Ruins and Roman Relics for the primary purpose of maintaining skills in hearing, speaking & teaching French and Latin -

Airline tickets, Lodging and Travel expenses paid in 1964 - $1,251.06.

The Commissioner, in his notice of deficiency, disallowed said claimed deduction.

Opinion

Section 162(a) of the Internal Revenue Code of 1954 provides in pertinent part:

(a) IN GENERAL. - There 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, including -

(1) * * *

(2) traveling expenses (including amounts expended for meals and lodging other than amounts which are lavish or extravagant under the circumstances) while away from home in the pursuit of a trade or business.

Also, section 1.162-5 of the Income Tax Regulations which deals particularly with expenses for education, provided in material part during the taxable period here involved /1/:

Section 1.162-5. EXPENSES FOR EDUCATION. - (a) Expenditures made by a taxpayer for his education are deductible if they are for education (including research activities) undertaken primarily for the purpose of:

(1) Maintaining or improving skills required by the taxpayer in his employment or other trade or business * * *

Other statutory provisions which bear upon the instant problem are contained in section 274(c) and (d) of the Code.

It is our opinion - after considering all the pertinent statutes and regulations, after seeing and hearing the petitioner testify at considerable length, and also after considering and weighing all the evidence - that the disputed deduction should be allowed. We are convinced that the expenditures made by the petitioner for her trip to the Mediterranean area were incurred "primarily" for educational purposes and for maintaining and improving her skills in her employment as a teacher of Latin and French. See, Regulations Section 1.162-5(1), supra. Also, we are impressed from the evidence that petitioner was highly experienced in her field of employment, and very dedicated thereto; that her "major consideration" in arranging and financing the trip, was not to take a vacation; but rather was: (1) to place herself temporarily in a Frenchspeaking environment; (2) to visit sites and architectural ruins of the Ancient Roman Empire; and then (3) to bring back to her students and to the members of her Latin and French Clubs, the benefits of her experiences. See, Regulations Section 1.274-4(f)(5) (i) and (ii). To attain these ends, she employed public transportation that had a fixed cost and that she did not substantially control, but which best served her aforesaid objectives. The arrangements which the officers of her school made to facilitate the trip, tend to support (though not conclusively) the school-related purpose.

We decide the issue for the petitioner. Since a statutory deficiency was determined, and certain credits are allowable,

Decision will be entered under Rule 50.