Court Opinion

ID: 4478706
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:13:14.892788+00
Date Added: 2024-06-11T14:52:38.069108
License: Public Domain

Black, J., dissenting: I find myself in disagreement with the majority opinion. Therefore, I respectfully dissent. As stated in the majority opinion, both parties seem to agree in their briefs that the main issue relating to the deduction of fees paid by petitioners for their own personal psychoanalysis will be determined by the new Treasury regulations which define deductibility of educational expenses as trade or business expense. It is petitioners’ contention that the expenses incurred and paid for their own psychoanalysis under circumstances as described in the Findings of Fact are deductible as trade or business expenses under the new Treasury regulations. The Commissioner contends to the contrary and argues that the expenditures were capital expenditures incurred in preparation for a new specialty. The parties seem to agree that the applicable regulation is section 1.162-5, Income Tax Begs., printed in the margin of the majority opinion. It is petitioners’ contention that their expenditures for their own psychonalysis come within the ambit of paragraph (a) (1) of the applicable regulation. Eespondent contends that the expenditures in question fall within the classification enumerated in (b) of the regulation. Before I state why I think the majority opinion is in error,in holding that the expenses incurred and paid by petitioners Namrow and Maxwell for their own personal psychoanalysis should be disallowed, I think I should state that the following facts are, in my opinion, amply' established by the record, including the expert testimony, in these proceedings: Psychotherapy is the most common form of treatment technique employed by psychiatrists. Other types of treatment employed by psychiatrists are chemotherapy, occupational therapy, drug therapy, milieu therapy, hypnosis, industrial therapy, insulin coma therapy, and shock treatment. Psychotherapy is carried out by encouraging the patient to talk freely to the doctor as a method of discovering the history and meaning of the patient’s symptoms and is sometimes referred to as the “talking cure.” The patient’s statements are sometimes referred to as “verbal productions.” Psychotherapy can be of a greater or lesser duration and can be directed to the narrow area of the patient’s immediate symptoms or to a much broader area of the patient’s emotional insecurities and personality difficulties; Psychoanalysis is a name often given intensive psychotherapy, where the doctor sees the patient four or more times a week and makes a thoroughgoing investigation of the patient’s present condition, history, and background, in the attempt to get at the ultimate causes for the illness. Intensive psychotherapy, or psychoanalysis, is a recognized medical procedure; A psychiatrist himself is not required to be psychoanalyzed before he employs psychotherapy with his patients; There is no specialty of psychoanalysis l’ecognized by the American Medical Association, the American Psychiatric Association, or the Advisory Board for Medical Specialties. There is no American Board of Psychoanalysis; Although psychiatrists do not generally refer to themselves by the term “psychoanalyst,” when they do so refer to themselves, for the purpose of listing in a professional directory or otherwise, they intend to signify by such reference that in the major part of their practice they employ intensive psychotherapy. Doctors describe themselves as “psychoanalysts,” who are not affiliated with an institute, or a psychoanalytic society, and who are not members of the American Psychoanalytic Association. In the “Directory of Psychiatrists and Clinical Psychiatric Facilities in the Washington Area” issued by the Washington Psychiatric Society, some doctors list themselves as “psychoanalysts” although they are not members of the American Psychoanalytic Association or of its member societies; For the success of psychotherapy, it is important that the psychiatrist recognize and remain objective about his own emotional problems, i.e., “blind spots,” which can interfere with proper treatment of the patient. The objectivity or emotional maturity required by the psychiatrist differs from that required by doctors specializing in other branches of medicine since the psychiatrist is primarily concerned with emotional or mental illness; In order to increase their professional competence by achieving and maintaining this objectivity, psychiatrists, regardless of whether they are affiliated in any way with the American Psychoanalytic Association, frequently arrange to be psychoanalyzed. In being psychoanalyzed, the psychiatrist’s attention is frequently directed to possible blind spots in his personality by the supervising analyst where problems arise in connection with cases the psychiatrist is currently treating. The elimination of these blind spots, through his professional analysis, benefits the psychiatrist in his current practice and permits him to give his patient better treatment; The professional analysis, such as petitioners were taking, lasts about 3 to 4 years. After the analysis is completed, psychiatrists sometimes return for additional analysis as they may find their work requires it. Psychiatrists who undergo this professional analysis pay the treating psychiatrist the customary fees for psychiatric treatment; Petitioners Namrow and Maxwell incurred and paid the expenses of training in psychotherapy and of psychoanalysis to maintain or improve their skills required by their practice of psychiatry. They did not incur the expenses to obtain new or advanced position, or to enter into any new specialty. I think petitioners’ contention that their expenditures for personal psychoanalysis are allowable deductions should be sustained on authority of John S. Watson, 31 T.C. 1014. Incidentally it may be remarked that the Watson case was decided by this Court subsequent to the filing by the parties of their briefs in the instant case and is, therefore, not discussed in their briefs. In the Watson case, the taxpayer was a physician engaged in the practice of internal medicine. In 1954 the taxpayer, after engaging in practice for 3 or 4 years, decided to obtain training in psychoanalysis and the techniques of psychiatry. He was advised that such training could be obtained in either Cincinnati, Ohio, or Detroit, Michigan. He decided to take it in Detroit and in doing so incurred expenses of $5,184.56 in 1954 and $3,732 in 1955. What he expended in the year 1956, prior to the completion of his psychoanalysis in that year, was not before us in that case. The amounts which were claimed by the taxpayer in the Watson case as deductions for business expenses on his returns for 1954 and 1955 were disallowed by the Commissioner. We allowed the deductions as coming fully within the provisions of section 1.162-5 (a) (1), Income Tax Regs. This is the provision in the Treasury regulations upon which petitioners rely in the instant case. In the Watson case, in holding that the taxpayer was entitled to the deductions which he claimed, we said: The record clearly shows that petitioner undertook the course for educational purposes and that his aim was to maintain and improve his skill as an internist. The techniques with which he sought to become familiar were useful in his general field of practice. Though the course was specialized, petitioner was not pursuing it for the purpose of fitting himself to engage in the specialty. He continued to practice as an internist but with skills presumably sharpened by his additional training in analysis and psychiatric techniques. Although the facts in the instant case are somewhat different from the facts in the Watson case, I do not think that the difference in the facts of the two cases is sufficient to distinguish them in principle. I do not agree with the majority opinion that the two cases are distinguishable. In the Watson case, the taxpayer was a medical doctor practicing internal medicine and went to Detroit to be psychoanalyzed and thus observe the methods used by his analyst and become familiar with the technique of analysis. In the instant case, Namrow and Maxwell were medical doctors and also psychiatrists who were already practicing their specialty of psychiatry. Before they were entitled to practice their specialty of psychiatry they were required to graduate from an accredited medical school, to have 1 year of general internship, and 1 year of specialized residency in an approved institution treating mental disorders. All this Namrow and Maxwell had done and none of the expenses incurred therein are involved here. Petitioners were psychoanalyzed for essentially the same purpose as Watson was in the Watson case, viz, to maintain and .improve their skills in their profession. See sec. 1.162-5 (a) (1), Income Tax Eegs. They were not taking the course, as respondent contends and the majority opinion seems to hold, for the purpose of engaging in a new specialty. All the expert testimony, as I interpret it, is to the effect that psychoanalysis is but one of the several techniques used by psychiatrists in their practice and is not a specialty within itself; that it is nowhere recognized as a specialty. It is clear from the record, I think, that undergoing professional analysis improves the skill of a psychiatrist in administering the psychiatric treatment of psychotherapy. On the strength of the testimony of eminent and well-qualified experts on psychiatry and other facts in the record, I would hold that the expenditures involved in the psychoanalysis of petitioners were incurred by them in maintaining or improving their skills in their chosen profession as psychiatrists within the meaning of section 1.162-5 (a) (1), Income Tax Eegs., and are deductible as ordinary and necessary business expenses. If Watson, in the Watson case, was entitled to deduct under the regulations above cited the $5,184.56 which he expended in 1954 and the $8,732 in 1955 for being psychoanalyzed, I fail to see why petitioner Namrow is not entitled to deduct the $2,250 which he paid to Dr. Mabel Cohen in 1954 for psychoanalysis. Also, I fail to see why petitioner Maxwell is not entitled to deduct the $280 which he paid to Dr. Kamm, of Chicago, in 1954 for his psychoanalysis which apparently was completed in a prior year; But even if I should agree, which I do not, that these deductions above described should be disallowed, I would still dissent from the majority opinion. In 1954, petitioner Namrow paid to Dr. Douglas Noble $375 for psychiatric consultation with respect to a patient whom he was treating in that year. Namrow saw the patient, in respect to whose case he had the supervision of Dr. Noble, at least four times a week and Dr. Noble saw the patient once a week. In 1954, petitioner Maxwell paid $630 to Dr. Edna G. Dyar and $75 to Dr. Lucile Dooley; in 1955, he paid $525 to Dr. Dyar, $360 to Dr. Dooley, and $300 to Dr. Andrew B. Evans for supervision of the treatment of several of his patients in the same manner as described above in the case of petitioner Namrow. It seems to me that these payments are deductible as ordinary and necessary business expenses under the provisions of section 162(a), 1954 Code, without regard to any of the provisions of section 1.162-5 (a) (1), Income Tax Begs., which have special relation to expenses for education. The payments which petitioners made to these supervising psychiatrists for their help in treating certain patients were no different in principle, as I see it, from what payments a surgeon might make to some other surgeon whom he called in for consultation in a difficult case or to what a lawyer might pay to another lawyer whom he might call in for consultation and advice in a difficult case. It is true, I suppose, that in most cases such payments for consultation are made direct by the patient or client to the surgeon or lawyer who is called in for consultation. Under such circumstances the payments would not be deductible by the surgeon or lawyer who called in the consulting surgeon or lawyer. The obvious reason why such payments would not be deductible by the doctor or lawyer who calls in the consultant would be that they were paid by the patient or client himself. But if the payments were made by the surgeon or by the lawyer, who called in another surgeon or lawyer for consultation, out of his own funds, I certainly think they would be deductible as ordinary and necessary business expenses. In discussing this issue of the deductibility by petitioners of the fees which they paid to supervising psychiatrists in the treatment of some of their patients, the majority opinion emphasizes the academic nature of the Washington and Chicago Psychoanalytic Institutes. Neither the statutory provisions here involved, the regulations promulgated supplementary thereto, nor any judicial precedent of which I am cognizant requires that the education or training be acquired other than by attendance at a recognized school. Indeed, the intent of the regulation clearly appears to allow the deduction of scholastic training which would otherwise be deemed personal and nondeductible. In tbe instant case, the facts show that petitioners paid the consulting psychiatrists out of their own funds and, as I have already said, I see no reason why these payments are not deductible under the provisions of section 162(a) (1), 1954 Code. This issue was not present in the Watson case. For the foregoing reasons I respectfully dissent from the majority opinion. I do wish to state, however, that I agree with the majority opinion that if the fees paid by petitioners for their own psychoanalysis are not deductible as ordinary and necessary business expenses under section 1.162-5, Income Tax Kegs., they are not deductible as medical expenses under section 213, 1954 Code, relating to the deduction of medical, dental, etc. expenses. There is no evidence in the record, as I see it, which would justify the deduction of these payments as medical expenses. HaRRON, Tietjens, Withey, and Forrester, JJ., agree with this dissent.