Martin J. Welsh and Elsie N. Welsh v. United States

PER CURIAM. This case, like Condit et al. v. Commissioner of Internal Revenue, 329 F.2d 153 (C.A.6), involved the question as to the deductibility of expenditures incurred by taxpayer for tuition and books in attending night law school. Taxpayer had been employed by the Internal Revenue Service in the Intelligence Division. He graduated from the law school and was admitted to the bar in Ohio. Shortly thereafter he terminated his employment with the Internal Revenue Service to engage in the general practice of law. The action in the District Court was to recover a refund of income taxes paid by the taxpayer on the ground that they were illegally assessed and collected. Trial by jury was waived and the District Judge heard the evidence. The District Judge, in a memorandum opinion, analyzed the evidence and drew inferences therefrom. He found that taxpayer’s enrollment in law school was primarily to maintain or improve the skills required of him in his employment with the Internal Revenue Service and that the expenses he incurred were properly deductible as an ordinary or necessary business expense under Section 162 of the Internal Revenue Code of 1954. (26 U.S.C. § 162) Treasury Regulations on Income (1954 Code) Section 1.162-5. The issue in this case was solely one of fact. In our opinion, there was substantial evidence to support the findings of fact of the District Judge. While he reached a different conclusion than the Tax Court in the Condit case, we cannot say that his findings of fact based on the evidence in the present case are clearly erroneous. The judgment of the District Court is affirmed.