T.C. Memo. 1996-110

UNITED STATES TAX COURT

HERBERT F. AND LOIS A. HEWETT, Petitioners v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 7217-94. Filed March 7, 1996.

Herbert F. Hewett and Lois A. Hewett, pro se.

C. Glen McLoughlin, for respondent.

MEMORANDUM OPINION

PAJAK, Special Trial Judge: This case was heard pursuant to

section 7443A(b)(3) of the Code and Rules 180, 181, and 182. 

Unless otherwise indicated, all section numbers refer to the

Internal Revenue Code for the taxable year in issue, and all Rule

numbers refer to the Tax Court Rules of Practice and Procedure.

Respondent determined a deficiency in petitioners' 1989

Federal income tax in the amount of $1,129, as well as an
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accuracy-related penalty under section 6662(a) in the amount of

$226. After concessions by respondent, this Court must decide:

(1) Whether petitioner wife's educational expenses are deductible

under section 162; (2) whether petitioners are entitled to deduct

home office expenses under section 280A; and (3) whether

petitioners are liable for an accuracy-related penalty for

negligence under section 6662(a).

For clarity and convenience, the findings of fact and

opinion have been combined.

Some of the facts have been stipulated and are so found. 

Petitioners resided in Oklahoma City, Oklahoma, at the time they

filed their petition.

Petitioner Lois A. Hewett (petitioner) is a professionally

trained pianist. She received both a bachelor's and a master's

degree in music from the University of Michigan in 1953 and 1954,

respectively. She also completed all the course work, but not

the final series of exams and recitals, for a doctorate in music

arts from the University of Illinois.

Petitioner has taught piano both privately and at various

universities since the 1950's, including the University of

Oklahoma. During her 25 years of teaching at the University of

Oklahoma, petitioner principally taught piano, one-on-one, to

students. She also taught music theory, improvisation, sight

reading, accompanying, and ensemble.
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Petitioner has performed extensively as a professional

pianist. She performed her first solo piano recital when she was

in sixth grade, and has continued as a solo performer ever since,

usually playing a minimum of one solo recital a year. In

addition, she has been a concert performer with various

orchestras. As a professional accompanist, she has toured with

fellow university faculty members, and has been the local piano

accompanist for touring performers, such as Blanche Thebom of the

Metropolitan Opera.

During 1988, petitioner retired from the faculty of the

University of Oklahoma. In 1988 and 1989, petitioner continued

to teach piano privately to students in her home.

In 1989, petitioner began to take courses to become a music

therapist. Petitioner enrolled in Central State University,

Edmond, Oklahoma (now the University of Central Oklahoma), to

commence work on the prerequisites for a master's degree in music

therapy. Her 1989 course work at the University of Central

Oklahoma included Psychology of Exceptional Children, Applied

Guitar, Survey of Emotionally Disturbed Children, Abnormal

Psychology and Instrumental Techniques.

Later in 1989, petitioner enrolled in the master's degree

program in music therapy offered by the Department of Music of

Texas Women's University, Denton, Texas. In 1989, at Texas

Women's University, petitioner took a seminar in Music Therapy,

and courses in Biofeedback, and Music for the Exceptional Child.
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As described at trial by Dr. Donald E. Michel, Professor

Emeritus of the Texas Women's University's Music Therapy program

and petitioner's faculty adviser, the purpose of music therapy is

"to use music to help clients in various categories change for

the better, to improve their health." Petitioner further

described music therapy as the "prescribed use of music * * * to

produce a change for some therapeutic reason. Produce a change

in an individual." When asked who makes the decision that an

individual needs the help of a music therapist, petitioner

replied:

That would depend upon the situation. If it is a

psychiatrist, he would. If it is a school system, they

would. If it is in a nursing home, probably the social

workers, or whoever the psychologist is there.

They make the goals, they determine the goals, and

the music therapist works with these goals, makes their

own individual assessment in terms of how music can

specifically help those goals.

Dr. Michel testified that "nearly two-thirds of the music therapy

practitioners are serving in one of three categories: mentally

impaired, or emotionally disturbed; developmentally disabled; or

elderly."

As of the time of trial, petitioner had not obtained her

degree in music therapy. She had fulfilled all the requirements

for what was called the "equivalency". Petitioner had completed

all course work, as well as an internship. She opted to obtain a

master's degree, and was involved with finishing a thesis at that

point.
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After she had completed sufficient course work, petitioner

worked as a music therapist in a summer program at Hope Community

Center in Oklahoma City, Oklahoma. Hope Community Center is a

community mental health treatment center. Petitioner also has

worked as a music therapist with Alzheimer's patients in a

nursing home, as well as with school children suffering from

problems such as developmental delay, microcephaly, and cerebral

palsy.

As of the time of trial, petitioner had interviewed for

employment as a music therapist at St. Anthony's Hospital and

Deaconess Hospital. Both positions were with the

psychiatric/mental health departments of the respective

hospitals. Petitioner had also interviewed for a music therapist

position with the Red Rock Community Center.

Respondent disallowed the following expenses claimed by

petitioners on the Schedule C attached to their 1989 Federal

income tax return:

Education expenses $2,501

Home office expenses 255

Depreciation 472

Telephone expenses 35

Professional dues 158

Petitioners now claim additional Schedule C educational

expenses of $1,665 for 1989.

Section 162 allows a deduction for ordinary and necessary

business expenses. Educational expenses are deductible business

expenses when the education maintains or improves the skills
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required by an individual in his or her employment. Sec. 1.162-

5(a)(1), Income Tax Regs. They are not deductible, however, if

the education is undertaken either to meet the minimum

requirements for that trade or business or to qualify for a new

trade or business. Sec. 1.162-5(b)(2) and (3), Income Tax Regs.

Respondent does not dispute the amounts claimed as expenses

by petitioners. Rather, respondent asserts that petitioner's

educational expenses led to petitioner's qualification for a new

trade or business and thus are nondeductible. Petitioners

contend that petitioner's coursework did not qualify her for a

new trade or business. Petitioners' argument, briefly stated, is

that petitioner's trade or business is the field of music, and

that music therapy is a specialization within that field. 

Consequently, petitioner's educational expenses are for

additional specialization or improvement of those skills, and are

thus deductible under section 162.

It is well established that we must employ objective

standards in applying section 1.162-5(b)(3), Income Tax Regs. 

Bodley v. Commissioner, 56 T.C. 1357, 1360 (1971). In evaluating

whether the "new trade or business" exception applies, this Court

uses a common sense approach. We compare the types of tasks and

activities the taxpayer was qualified to perform before she

acquired the education at issue and those she is qualified to

perform afterwards. If substantial differences exist in the

tasks and activities of the various occupations or employments,
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then each such occupation or employment constitutes a separate

trade or business. Davis v. Commissioner, 65 T.C. 1014, 1019

(1976). In applying the test, we have found different trades or

businesses within the same general field. See, e.g., Reisinger

v. Commissioner, 71 T.C. 568, 577 (1979) (physician's assistant

different from licensed practical nurse); Glenn v. Commissioner,

62 T.C. 270, 275 (1974) (certified public accountant different

from licensed public accountant).

Petitioners bear the burden to prove that they are entitled

to the deductions in question. Rule 142(a); Welch v. Helvering,

290 U.S. 111, 115 (1933). Petitioners must prove that the

education expenses neither qualify petitioner for a new trade or

business nor are necessary to meet the minimum requirements for

qualification as a music therapist.

Petitioner's trade or business prior to her studies at the

University of Central Oklahoma and Texas Women's University was

that of a professional pianist and piano teacher. After

retirement from the faculty of the University of Oklahoma in

1988, her teaching activities for 1988 and 1989 consisted of

private piano lessons given in her own home.

After her studies at the two universities, petitioner was

qualified to work as a music therapist. In their trial

memorandum, petitioners explain the tasks and activities of a

music therapist as follows:
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Music therapy is the use of music to restore, maintain

and improve the mental, emotional and physical health

of people. Music therapists plan programs to meet

those needs, either acting alone or with other

therapists. They use instrument playing, singing,

improvisation, rhythmic experiences and other aspects

of music to accomplish this goal. In effect, they use

music to achieve non-musical progress in their clients.

After due consideration of the record before us, we find

that petitioner's occupation as a professional pianist and piano

teacher is different from the services she performs and will

perform as a music therapist. While performance and teaching

skills are no doubt skills utilized by a music therapist, we

believe that the specific therapeutic goals of music therapy

exert an influence over a music therapist's tasks and activities

such that the tasks and activities differ from those of a

professional pianist and teacher. Rather than teaching music

skills to a student, a music therapist uses music skills to

effect a therapeutic change in an individual. Significant in

this regard are the following statements by Dr. Michel:

 [A] music therapist has to be able to adapt the

music skills in another way to meet the needs of the

client.

 And that is quite different than performing on the

stage or teaching in the studio. There are some

similarities with the teaching area, but not so much in

the performance, so music therapists have to learn to

adapt those skills to make use of them to follow the

goals that are set for therapy.

* * * * * * *

 And music therapists are teaching sometimes, but

if you are a teacher of music, your primary reason for

teaching is to teach music skills. If you are a music

therapist, it is to use music or help clients learn
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other skills that they need to learn. Or to change

behaviors that need to change.

Though Dr. Michel did not testify as an expert witness, we

found him to be extremely credible and knowledgeable about the

field of music therapy. Thus, based on the record we find that

petitioner's expenditures were for education that led to her

qualification in a new trade or business. Sec. 1.162-5(b)(3)(i),

Income Tax Regs. Therefore, these expenses are nondeductible

personal expenses under section 262.

Alternatively, even if the education did not lead to

qualification in a new trade or business as a music therapist,

the educational expenditures are nondeductible because they were

incurred to enable petitioner to meet the minimum educational

requirements for qualification as a music therapist. Dr. Michel

stated that without the music therapy course of study, someone

with performance skills alone could not be a music therapist. 

Petitioner likewise admitted that prior to her music therapy

course work, she would not have been considered for the therapist

position she held at Hope Community Center, or the other

facilities at which she interviewed, because she would not have

been qualified.

We have no choice but to conclude that the educational

expenses were incurred to enable petitioner to meet the minimum

educational requirements for qualification as a music therapist. 

Sec. 1.162-5(b)(2)(i), Income Tax Regs. Accordingly,
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petitioner's educational expenditures are nondeductible personal

expenses under section 262.

On Schedule C of their 1989 tax return, petitioners claimed

a deduction in the amount of $255 for what they termed "home

expenses of teaching and practicing". The expenses were based on

a percentage of the square footage of petitioners' residence

where a Steinway concert grand piano, measuring more than 10 feet

in length, was located. The piano sits in an alcove in the

living room, and extends out into the living room. There is no

partition to separate the alcove from the rest of the room.

Section 280A generally disallows a deduction with respect to

the business use of a taxpayer's personal residence. Section

280A(c)(1)(A), however, provides that section 280A(a) shall not

apply if a portion of the taxpayer's personal residence is

exclusively used on a regular basis as the principal place of

business for any trade or business of the taxpayer. The

exclusive use test does not require that the portion of a room

used for business must be separated physically from the rest of

the room by a wall, partition, or other demarcation, but only

that the absence of such a physical separation is a factor for

the Court to weigh. Williams v. Commissioner, T.C. Memo. 1991-

567.

Petitioner testified that she used the piano strictly for

teaching and practicing. We are satisfied that the area where

the piano was located was used exclusively by petitioner for her
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professional teaching and practicing activities during 1989. 

Accordingly, petitioners are allowed to deduct their home office

expenses for the year in issue.

On this entire record, we are satisfied that the section

6662(a) accuracy-related penalty for negligence should not be

imposed.

Decision will be entered

under Rule 155.