United States v. Howard K. Michaelsen and Fayetta M. Michaelsen, Commissioner of Internal Revenue v. Elmer R. Johnson and Bernice E. Johnson

In these two cases the same question is presented: whether a teacher-taxpayer may deduct as ordinary and necessary expenses of business the cost of education secured in order to permit him to> continue in the teaching profession. While the cases present different aspects of the problem, the same sections of code and regulations are involved and for clarity of discussion it has been thought, best to consolidate the two cases in one opinion.

The deductions are sought under § 162 (a) of the Internal Revenue Code of 1954, which provides:

Section 1.162-5 of the Treasury Regulations deals with the deduction of expenses for education. Subsections (a) and (b) are set forth in the margin.

MICHAELSEN

This ease arises under Washington law and comes to us on appeal by the United States from a decision in favor of the taxpayer rendered by the District Court for the Eastern District of Washington.

The essential problem: where the line shall be drawn between the current business expenses of a teacher, and expenditures of a preparatory and qualificatory character incurred by a would-be teacher.

The Washington State Board of Education has provided through regulations for a teacher education…