Court Opinion

ID: 9451245
Source: CourtListenerOpinion
Date Created: 2023-08-04 17:11:05.634988+00
Date Added: 2024-06-11T17:32:37.760030
License: Public Domain

DAVIS, Judge
(dissenting):
The court suggests, and I would hold, that Mrs. Canter’s primary purpose was to maintain or improve her skills as a Public Health Service nurse — within the scope of Section 162 of the 1954 Code and Treas.Reg. § 1.162-5. On this record we should have no trouble concluding that her nursing studies were not undertaken for the excluded objectives of obtaining a new position or a higher grade, or of fulfilling general educational aspirations. The only controversial issue is whether she was employed or engaged in a trade or business in 1960, or whether she was at that time unemployed and wholly inactive in her profession.
Rev.Rul. 60-97, 1960-1 Cum.Bull. 69, 70, declares that “a taxpayer will not be considered to have ceased to engage in his employment or other business during an off-duty season, when he is on vacation, or when he is on temporary leave of absence” (emphasis added). To me, the concept of a “temporary leave of absence” must be seen functionally and realistically, not technically or formally. If Mrs. Canter had been permitted by the Public Health Service to remain on unpaid leave from that agency during 1960, she would, on the court’s own theory, be entitled to the deduction she claims. Her status during that year was, to my mind, the same in substance, though not in form, as if she had been retained on the rolls without pay. She was, in effect, on “temporary leave of absence.”
The clue to one of the meanings of a “temporary leave of absence” in the context of the educational deduction is given by the revenue ruling itself. One sentence says: “Therefore, if a taxpayer who has ceased to engage in employment or other business subsequently undertakes education or training preparatory to resuming engagement in such employment or other business, the cost of such education is not deductible” (emphasis added). This implies that the cessation of employment or business came about through some independent cause, and *356was not directly for the purpose of studying, but that the individual then decided to use the free time for further training before re-entering the labor market. In that event the stopping of work is separate from and unrelated to the “subsequently undertaken” course of study and, conversely, the studying is related only to some future job or activity, not to the one which has already ceased. But a moderate interruption of active work for the specific purpose of taking courses connected with that work falls into a different class. Because the temporary ending of work is for the goal of returning to it with better qualifications, that job has not ceased; in substance, there is merely an intermission in activity for a special purpose (whatever may be the markings on the papers in the personnel office). If the person reasonably expects to resume his same employment (or work) and if he leaves it temporarily in order to undergo the training which will advance his ability to perform, he is, with respect to the educational deduction, “on temporary leave of absence” which suspends but does not cut off his employment. This understanding makes more sense, in my view, than an unquestioning reliance on the particular way the particular employer chooses to characterize his employees who leave temporarily for an interval of training.
There is no doubt that Mrs. Canter left her work at the Public Health Service solely in order to obtain a nursing degree. She resigned in 1958 only because agency policy forced her to do so. She testified that she planned to return to her Service job after she completed her schooling and there is no reason to doubt her word. The Service encouraged its nurses to take courses, and it is reasonable to infer from the record that the agency would re-hire her when an opening occurred even though it was not under any legal obligation. Mrs. Canter knew, moreover, that she would return to the same grade level and that her training would not entitle her to a higher position. After her academic work she took a job for a few months outside of the Service, apparently because there was no immediate vacancy for her in the Service; she returned there after a little while, at the same grade she held in 1958. For the year 1960, all this adds up to a “temporary leave of absence” — a temporary suspension of work — as I conceive the term. Cf. King v. Commissioner, 21 CCH Tax Ct.Mem. 495, P-H Mem. T.C. ^62,093 (1962).1
FINDINGS OF FACT
The court, having considered the evidence, the report of Trial Commissioner William E. Day, and the briefs and argument of counsel, makes findings of fact as follows:
1. The plaintiffs, Ashby H. and Florence G. Canter, are husband and wife. They filed a joint Federal income tax return for 1960, the year in issue.
2. Plaintiff, Florence G. Canter, is and has been a registered nurse since 1935. She received her nurses training at Bristol Hospital, Bristol, Connecticut. Plaintiff’s course in nurses training at that hospital did not then include academic work. After working as a nurse at various hospitals, she then worked as a private practice nurse. In 1937, the plaintiff became interested in public health, enrolling at the College of William and Mary for the full-time Public Health Nursing Course which that college offered. Upon completion of that course in 1938, the plaintiff received a certificate in Public Health Nursing.
3. The plaintiff entered upon Government employment with the U.S. Public Health Service in May 1949 at a grade of GS-7. She continued in that employ*357ment until she resigned on August 26, 1958, after having been on an educational leave without pay status from February 1 to August 26, 1958.
4. The plaintiff’s work as a Public Health Nurse during the employment described above was carried out in the nurses’ stations at various Government office buildings. While- so employed, the plaintiff took some evening courses at a branch of the University of Virginia. The testimony is not clear as to the extent of this activity, however.
5. It is clear from the record, however, that the plaintiff wanted to obtain a Bachelor of Science degree in Nursing. It is equally clear that the taking of further courses by nurses employed by the Public Health Service was encouraged by that office in its literature and by the supervisors of the nurses.
6. The plaintiff successfully passed an examination of the League of Nursing Education, which entitled her to 45 credits toward a degree in nursing. She needed an additional 28 credits to qualify for the degree.
7. On January 2, 1958, plaintiff requested a 9 months’ educational leave of absence, the maximum amount allowable, beginning February 1, 1958, through November 1, 1958. That request was granted on January 3, 1958. Plaintiff had the right to return to work at any time prior to November 1, 1958. In February 1958, plaintiff enrolled as a full-time student at the University of Maryland in order to obtain the degree of Bachelor of Science in Nursing.
8. The plaintiff continued as a full-time student at the University of Maryland until June 1960 when she was awarded the degree of Bachelor of Science in Nursing.
9. Since her leave of absence could not be extended to allow her to complete the course, the plaintiff resigned from her position with the Public Health Service in August 1958.
10. In September 1960 the plaintiff began, as a full-time student, her graduate studies at the University of Maryland, leading to a master’s degree in Psychiatric Nursing, which she completed in June 1962.
11. After receiving her master’s degree, plaintiff went to work for Montgomery County, Maryland. In February 1963, she requested reemployment at the U.S. Public Health Service and, in May 1963, began working there.
12. The plaintiff received no earnings from employment through the period February 1958 until June 1962.
13. Plaintiffs claimed educational expense deductions of $892.43 on their 1960 Federal income tax return, $113 for Mr. Canter’s expenses and $779.43 for Mrs. Canter’s expenses. Of the $779.43, $299.63 was expended while plaintiff was earning her bachelor’s degree, and $479.80 related to expenses incurred while studying for her master’s degree. Those expenditures were as follows:

Item: Spring Fall

Tuition ...................... $126.00 ■ $150.00
Books ........................ 32.84 25.40
Room, board, and transportation 131.68 304.40
Miscellaneous ................. 9.11 —
Totals ................... $299.63 $479.80

Semester Incurred

The expenses for room, board, and transportation during the spring semester were incurred for travel to Baltimore to attend class once a week on Wednesday evenings, meals, and overnight lodging while there, travel on *358Thursday mornings to College Park, and later travel back to her home in Palls Church, Virginia.
All of plaintiff’s classes during the fall of 1960 were held in Baltimore. The $304.40 which plaintiff spent for room, board, and transportation covered the fares to Baltimore on Monday mornings, the cost of meals and room in Baltimore from Monday through Thursday, and return fares to her home in Palls Church, Virginia. Plaintiff has retained, and continues to use, the textbooks which she acquired while a student.
14. Plaintiffs’ claimed deduction was disallowed by the Internal Revenue Service. They filed a formal claim on Form 843 for a refund of taxes paid on account of the disallowed educational expenses of Mrs. Canter. That claim was disallowed by letter, dated December 21, 1961, from the District Director, Internal Revenue Service, Richmond, Virginia, addressed to the plaintiffs.
CONCLUSION OP LAW
Upon the foregoing findings of fact, which are made a part of the judgment herein, the court concludes as a matter of law that plaintiffs are not entitled to recover. The petition is dismissed.

. There are work interruptions which are so protracted that they can no longer be designated “temporary”, but that is not true here, so far as 1960 is concerned. A span of three years is not too long for a degree-seeking interruption. Regular officers of the Army and the Navy used to be sent to law school as part of their military careers; they were only temporarily removed from their regular military pursuits.