James Kinsey Case Summary
Overview of the facts of the case:
James Kinsey began employment as a sales associate in March 2001 at Karnes Company after graduating high school in 1998. James was promoted to a position of senior sales associate. James supervisor encouraged him to get a degree in marketing from the local university. The company looked favorably on employees pursuing more education and that might help James to be considered for more promotions; although the degree was not required for his present position at that time.
James Kinsey enrolled at Kelly University majoring in business with a concentration in marketing in January 2002. James was promoted to sales manager in May 2002 after one semester at Kelly University. Duties under this position were expanded
to include supervision of sales staff and analysis of marketing data.
The Maretta Company bought out Karnes Company in July 2002. Maretta Company informed all sales managers that they were required to have a college degree due to increased responsibilities for sales manager positions. Maretta Company agreed that as long as James was enrolled in school and making progress toward his degree that they would retain him in the position as sales manager after discovering from their review of his personnel files that he did not have a college degree.
The following education expenses were incurred by James in 2002 consisting of tuition $3850, fees $378, books $1024, and computer $822 for a total amount of $6074.
James deducted the expenses above on Schedule A as education expenses on his 2002 tax return. The return was audited by the IRS and the education deductions were disallowed. James appealed and went to Tax Court for the deductions to be reinstated for allowance of the education deductions.
James Kinsey began employment as a sales associate in March 2001 at Karnes Company after graduating high school in 1998. James was promoted to a position of senior sales associate. James supervisor encouraged him to get a degree in marketing from the local university. The company looked favorably on employees pursuing more education and that might help James to be considered for more promotions; although the degree was not required for his present position at that time.
James Kinsey enrolled at Kelly University majoring in business with a concentration in marketing in January 2002. James was promoted to sales manager in May 2002 after one semester at Kelly University. Duties under this position were expanded
to include supervision of sales staff and analysis of marketing data.
The Maretta Company bought out Karnes Company in July 2002. Maretta Company informed all sales managers that they were required to have a college degree due to increased responsibilities for sales manager positions. Maretta Company agreed that as long as James was enrolled in school and making progress toward his degree that they would retain him in the position as sales manager after discovering from their review of his personnel files that he did not have a college degree.
The following education expenses were incurred by James in 2002 consisting of tuition $3850, fees $378, books $1024, and computer $822 for a total amount of $6074.
James deducted the expenses above on Schedule A as education expenses on his 2002 tax return. The return was audited by the IRS and the education deductions were disallowed. James appealed and went to Tax Court for the deductions to be reinstated for allowance of the education deductions.