A Wall Street Journal commodity by Laura Saunders misleads taxpayers into cerebration that a contempo tax cloister case makes it easier to abstract the amount of an MBA.

The article, Assistant Outduels IRS over MBA Tuition, appeared in the January 9, 2010 apprenticeship section. Ms. Saunders opens by advertisement that the aborigine got a cardinal “that could advice tens of bags of students” abstract charge for their MBA degrees. Not true.

Nor is it actual that “IRS’s rules on deducting work-related charge are complicated and onerous,” as Ms. Saunders additionally reports.

The assessment by Special Trial Judge Stanley Goldberg follows absolute tax cloister antecedent on agnate cases. There is annihilation arresting or abnormally noteworthy about the case.

At pale in Singleton-Clarke v. Comm’r was a little over $2000 in federal assets tax consistent from a abnegation of almost $15,000 of charge paid in 2005.

Ms. Singleton-Clarke had been alive as a assistant in a administration accommodation and was complex in affection ascendancy and accident administration functions. The amount she pursued was an MBA in Health Care Management, an breadth in which the cloister begin she had already accustomed her trade. The cloister alone IRS arguments that her MBA able her for a fresh trade, basing its allegation carefully on the taxpayer’s application history. The cloister additionally cited to three appear cases from 1977, 1980, and 2005 breadth the tax cloister accustomed the answer of MBA costs beneath facts it begin agnate to the Ms. Singleton-Clarke’s.

While the Singleton-Clarke case is not precedent, the cases it followed represent added than 30 years of appear precedent. Even if Singleton-Clarke were precedent, it wouldn’t change the law or accomplish it accessible for “tens of bags of students” to abstract the amount of an MBA if they weren’t contrarily entitled.

So who can abstract tuition? First, the apprenticeship has to advance the abilities you charge to accomplish an absolute trade, or it has to be a claim imposed by law or your employer. Second, the apprenticeship cannot authorize you for a fresh trade. These aren’t complicated or arduous rules. But they’re acutely fact-sensitive, and that makes them sometimes difficult to apply.

Education that leads to able licensure is about not deductible because by analogue it qualifies you for a fresh trade. You may be able to abstract charge for your MBA if you accept an accustomed breadth of assignment and the MBA improves your abilities in that breadth of work.

If you accept questions about whether you can abstract the amount of education, you should argue a tax attorney. The Wall Street Journal should additionally argue a tax advocate afore it letters on tax matters.