                         T.C. Memo. 2002-150



                       UNITED STATES TAX COURT



            STEPHEN AND SARA GALLIGAN, Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 7094-00.                  Filed June 13, 2002.


     Stephen Galligan and Sara Galligan, pro sese.

     Blaine C. Holiday, for respondent.


                         MEMORANDUM OPINION

     PAJAK, Special Trial Judge:    Respondent determined

deficiencies in petitioners’ Federal income tax in the amounts of

$2,293 and $1,815 for the taxable years 1996 and 1997,

respectively.    Unless otherwise indicated, section references are

to the Internal Revenue Code in effect for the years in issue,

and all Rule references are to the Tax Court Rules of Practice

and Procedure.
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     In an amended answer, respondent claimed an increased

deficiency of $1,344, for a total deficiency of $3,159 for the

taxable year 1997.

     After a concession by respondent, the sole issue we must

decide is whether petitioners are entitled to deduct legal

educational expenses incurred by petitioner Sara Galligan in

obtaining her law degree.

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

Petitioners resided in Eagan, Minnesota, at the time they filed

their petition.

     Petitioner Sara Galligan (Mrs. Galligan) has been an

academic and court law librarian for 25 years.   Mrs. Galligan has

held a variety of law librarian positions as a State Court

employee for 15 years.   She is currently the Dakota County Law

Library Manager (Law Library Manager).   As the Law Library

Manager, Mrs. Galligan’s primary duties consist of legal

research, overall management and administration of the law

library, and support on an on-going basis to attorneys, judges,

and other individuals using the Dakota County Law Library.    She

was president of the Minnesota Association of Law Librarians from

1999 to 2000.

     Mrs. Galligan attended William Mitchell Law School from

August 1994 through December 1998 and received her law degree.

While she attended law school, Mrs. Galligan worked full-time for
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the Minnesota State law library.    She was admitted to the bar in

Minnesota on May 7, 1999.

     Although the courses taken to obtain her law degree improved

or maintained her skills in her position as a law librarian, Mrs.

Galligan’s employer did not require her to obtain a law degree or

attend law school.   The job posting for Mrs. Galligan’s position

as Law Library Manager only indicated that a “[law degree] or at

least two years of professional experience in a law library is

strongly preferred.”

     During 1996 and 1997, petitioners claimed deductions of

$13,313 and $14,998, respectively, for Mrs. Galligan’s legal

educational expenses.

     Petitioners argue that they are permitted to deduct the

expenses incurred by Mrs. Galligan while attending law school

because the legal educational expenses improved and maintained

her skills as a law librarian.    Respondent contends that

petitioners are not entitled to deduct Mrs. Galligan’s legal

educational expenses because the expenses led to her

qualification for a new trade or business.

     Because the burden of proof does not affect the result in

this case, we find that section 7491 has no bearing on the

determination of the legal issues before us.

     Section 162 allows a deduction for ordinary and necessary

expenses incurred in carrying on a trade or business.    Section
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1.162-5, Income Tax Regs., sets forth the guidelines for

determining those educational expenses incident to a taxpayer’s

trade or business which are deductible.   Educational expenses may

be considered ordinary and necessary business expenses if the

education maintains or improves skills required by the taxpayer

in his employment or meets the express requirements of an

employer imposed as a condition for the taxpayer’s continued

employment, status, or rate of compensation.   Sec. 1.162-5(a),

Income Tax Regs.

     Educational expenses, however, are not deductible if they

are made by an individual for education which is part of a

program of study being pursued by her which will lead to

qualifying her in a new trade or business.   Sec. 1.162-

5(b)(3)(i), Income Tax Regs.   Such educational expenses are not

deductible even though the education may maintain or improve

skills required by the individual in her employment.    Sec. 1.162-

5(b)(1), Income Tax Regs.   Examples (1) and (2) of section 1.162-

5(b)(3)(ii) , Income Tax Regs., illustrate this rule:

          Example (1). A, a self-employed individual
     practicing a profession other than law, for example,
     engineering, accounting, etc., attends law school at
     night and after completing his law school studies
     receives a bachelor of laws degree. The expenditures
     made by A in attending law school are nondeductible
     because this course of study qualifies him for a new
     trade or business.
          Example (2). Assume the same facts as in example
     (1) except that A has the status of an employee rather
     than a self-employed individual, and that his employer
     requires him to obtain a bachelor of laws degree. A
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     intends to continue practicing his nonlegal profession
     as an employee of such employer. Nevertheless, the
     expenditures made by A in attending law school are not
     deductible since this course of study qualifies him for
     a new trade or business.

     The regulations establish an objective standard for

determining whether an educational expense is deductible.    Bodley

v. Commissioner, 56 T.C. 1357, 1360 (1971); Weiler v.

Commissioner, 54 T.C. 398, 401 (1970).   In Arbaugh v.

Commissioner, T.C. Memo. 1992-565, the Court held that, pursuant

to the regulations, “law school expenses constitute nondeductible

personal expenses regardless of the taxpayer’s primary motive in

pursuing such studies and regardless of whether such education

improves or helps maintain the taxpayer’s skills in his business

or profession, because the course of study qualifies the taxpayer

for a new trade or business.”   The regulations “do not predicate

disallowance of the deduction on the actual practice of the new

trade or business.”   Weiszmann v. Commissioner, 52 T.C. 1106,

1111 (1969), affd. 443 F.2d 29 (9th Cir. 1971).   In Weiler this

Court held that law school expenses were not deductible by an

Internal Revenue agent even though he never intended to practice

in the legal profession.   The Court held that whether the

taxpayer’s present employment be considered that of an

accountant, internal revenue agent, or tax expert, because the

taxpayer was “qualifying himself as a lawyer, a trade or business

separate and distinct from that in which he is now engaged”, his
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educational expenses were nondeductible.      Weiler v. Commissioner,

supra at 402.

     Petitioners contend that Mrs. Galligan obtained her law

degree to maintain and improve her skills as a law librarian.

Mrs. Galligan testified that knowledge of the law is both

necessary and helpful in her duties as a law librarian.

Petitioners also argue that Mrs. Galligan did not practice as an

attorney and is, in fact, “not allowed to practice law according

to the tenets of [her] profession.”

     Petitioners rely on Beatty v. Commissioner, T.C. Memo. 1980-

196, which we find distinguishable.      In Beatty, the Court held

that a taxpayer was allowed to deduct the educational expenses

associated with the pursuit of a Masters of Science degree in

Administration.   In that case, the Court held that the studies

provided the taxpayer with a broad general background in

management and business administration, activities which were

already components of the taxpayer’s work activities.      Id.

Unlike the instant case, the Court noted that the taxpayer’s

education did not qualify him for a new trade or business.       Id.

     We do not dispute that Mrs. Galligan was an outstanding law

librarian and that the legal education was helpful in her

profession as a law librarian.    However, by attending law school

and obtaining her law degree, Mrs. Galligan became entitled to

seek admission to the bar, as she did, and to enter the general
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practice of law if she should choose.     Unlike the taxpayer in

Beatty, Mrs. Galligan’s pursuit of a law degree qualified her for

the practice of law.   Thus, Mrs. Galligan’s law school education

was part of a program which qualified her for a new trade or

business.   Accordingly, we sustain respondent’s determination

that Mrs. Galligan’s legal education expenses are not deductible.



                                            Decision will be entered

                                       under Rule 155.
