                    T.C. Summary Opinion 2009-40



                        UNITED STATES TAX COURT



              PENELOPE FELICIA KENT, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 21883-07S.               Filed March 25, 2009.



     Penelope Felicia Kent, pro se.

     Kristen I. Nygren, for respondent.



     RUWE, Judge:     This case was heard pursuant to the provisions

of section 74631 of the Internal Revenue Code in effect when the

petition was filed.    Pursuant to section 7463(b), the decision to




     1
       Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the year at issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
                               - 2 -

be entered is not reviewable by any other court, and this opinion

shall not be treated as precedent for any other case.

     Respondent determined a deficiency of $4,415 in petitioner’s

2004 Federal income tax.   The issue for decision is whether

petitioner is entitled to deduct certain expenses claimed on her

2004 Schedule A, Itemized Deductions, incurred in the pursuit of

a doctorate degree from the College of Education at Argosy

University.

                            Background

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

The stipulation of facts and the attached exhibits are

incorporated herein by this reference.   When the petition was

filed, petitioner resided in Georgia.

     Petitioner earned a bachelor’s degree in health care

management from Clayton State University in 1997.   Petitioner

continued her education and earned a master’s degree in

counseling and psychology from Clark Atlanta University in 1999.

     Petitioner has worked for a number of companies in the

profession of human resources (HR) for at least the last 12

years.   In late 2001 petitioner was offered and began employment

with Weyerhaeuser Co. (Weyerhaeuser) as an HR generalist.    During

2004 petitioner continued her employment with Weyerhaeuser as an

HR generalist.
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     While employed at Weyerhaeuser during 2004, petitioner

attended Argosy University and enrolled in the university’s

doctorate of education program.    Weyerhaeuser did not require

petitioner to obtain any further education as a condition of

employment.    Rather, petitioner testified it was her personal

decision to pursue the degree because she saw it as an

opportunity to move up in the corporate world and the economy.

     During 2004 petitioner paid Argosy University $10,400 for

tuition.    Although petitioner lived in Atlanta, Georgia, she

enrolled at the Argosy University campus located in Sarasota,

Florida, because the campus in Atlanta did not offer the degree

she wanted.    Petitioner took half of her courses online and half

of her courses at the Argosy University campus located in

Sarasota.

     On her timely filed 2004 Federal income tax return

petitioner claimed miscellaneous itemized deductions for vehicle,

business, education, and tax preparation expenses that she
                                - 4 -

claimed related to her 2004 educational pursuit.2   The parties

have stipulated these expenses as follows:

                    Expense                Amount

                 Vehicle                 $7,149
                 Business                 3,560
                 Educational             10,400
                 Tax preparation            100
                   Total                $21,209

After application of the 2-percent floor in section 67(a),

petitioner’s claimed miscellaneous itemized deduction related to

her 2004 educational pursuit was $19,968.

     In the notice of deficiency, respondent disallowed

petitioner’s claimed miscellaneous itemized deduction.

Respondent’s determination was made on the basis of petitioner’s

alleged failure to establish that the $21,209 in unreimbursed

employee expenses were ordinary and necessary to petitioner’s

business.   Petitioner timely filed a petition with this Court.

                              Discussion

     In general, the Commissioner’s determination set forth in a

notice of deficiency is presumed correct, and the taxpayer bears



     2
       The record is unclear as to how petitioner’s claimed tax
preparation expense of $100 relates to her 2004 educational
pursuit. Nevertheless, the claimed deduction was disallowed by
respondent and grouped collectively with petitioner’s other
disallowed educational expenses; i.e., her vehicle, business, and
educational expenses. Because petitioner has not separately
asserted entitlement to a deduction for a tax preparation
expense, for convenience, we will continue to aggregate the
claimed tax preparation expense with the other asserted
educational expenses rather than deem the issue conceded by her
under Rule 34(b).
                                - 5 -

the burden of proving that the determination is in error.       Rule

142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933).    Deductions

are strictly a matter of legislative grace, and petitioner bears

the burden of proving entitlement to any deduction claimed.

INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992); New

Colonial Ice Co. v. Commissioner, 292 U.S. 435, 440 (1934).3

      Section 162(a) generally allows as a deduction “all the

ordinary and necessary expenses paid or incurred during the

taxable year in carrying on any trade or business”.    Expenditures

made by an individual for education are deductible as ordinary

and necessary business expenses if the education maintains or

improves skills required by the individual in her employment or

other trade or business.    Sec. 1.162-5(a), Income Tax Regs.    The

general rule under section 1.162-5(a), Income Tax Regs., however,

does not apply if the expenditures fall within either of two

specified categories; i.e., they are nondeductible expenditures

if:   (1) They are incurred to meet the minimum educational

requirements for qualification in a taxpayer’s trade or business;

or (2) they qualify the taxpayer for a new trade or business.

See Robinson v. Commissioner, 78 T.C. 550, 552 (1982); sec.

1.162-5(b), Income Tax Regs.



      3
       Pursuant   to sec. 7491(a), the burden of proof as to
factual matters   shifts to the Commissioner under certain
circumstances.    Petitioner, however, has neither alleged that
sec. 7491(a) is   applicable nor established compliance with the
requirements of   sec. 7491(a)(2)(A) and (B).
                               - 6 -

     Petitioner’s claimed unreimbursed employee expense deduction

is for expenditures related to her pursuit of a doctorate of

education from Argosy University.    Petitioner has been employed

in the HR profession for at least the last 12 years.    Petitioner

claims that during 2004, while employed as an HR generalist by

Weyerhaeuser, her professional duties were to train, develop, and

educate other company employees.    Petitioner asserts that a

doctorate of education degree would improve her skills in these

areas and position her for future opportunities within the HR

profession.   Petitioner also testified, however, that it was her

intention to become a consultant after finishing her doctorate

degree and further admitted having received offers for teaching

positions at two universities once she had received her degree.

     Respondent does not dispute whether petitioner’s pursuit of

a doctorate in education improves her skills in the HR

profession.   Respondent’s contention, which petitioner has not

refuted, is that the doctorate of education degree program

qualifies petitioner to enter into the new trades or businesses

of consulting and teaching and that the duties and

responsibilities of consulting and teaching are different in

nature than those associated with the HR profession.

     An individual who, through education, improves her skills in

an existing trade or business may also become qualified for a new

trade or business.   Thompson v. Commissioner, T.C. Memo. 2007-
                                   - 7 -

174.    If the education in question qualifies the taxpayer to

perform significantly different tasks and activities than she

could perform before the education, then such education is deemed

to qualify the taxpayer for a new trade or business.          Robinson v.

Commissioner, supra at 552 (citing Browne v. Commissioner, 73

T.C. 723, 726 (1980), Diaz v. Commissioner, 70 T.C. 1067, 1074

(1978), affd. without published opinion 607 F.2d 995 (2d Cir.

1979), Glenn v. Commissioner, 62 T.C. 270, 275 (1974), and

Weiszmann v. Commissioner, 52 T.C. 1106, 1110 (1969), affd. 443

F.2d 29 (9th Cir. 1971)).    The mere capacity to engage in a new

trade or business is sufficient to disqualify the expenses for

the deduction.    Weiszmann v. Commissioner, supra at 1111.

Petitioner, by her own admission, indicated that the skills and

knowledge she has acquired and continues to acquire in pursuit of

her doctorate degree in education will qualify her to enter into

a new trade or business, e.g., consulting and/or teaching.

       Accordingly, we find that petitioner’s unreimbursed employee

expenses claimed in 2004 were not ordinary and necessary expenses

to petitioner’s trade or business in the HR profession.         It

follows that petitioner has failed to carry her burden of proof

and respondent’s determination is sustained.

       To reflect the foregoing,


                                                Decision will be entered

                                           for respondent.
