It’s rare that an individual wins a victory against the IRS.
Rarer still is a landmark victory that could mean thousands in deductions for others.
But that’s exactly the double-feat nurse Lori Singleton-Clarke accomplished, winning a ruling that her nearly $15,000 in business school deductions were legitimate. This judgment makes it easier for other professionals to claim from an MBA tax deduction.
The 47 year old Maryland resident’s battle wasn’t an easy one. On her 2006 tax return, she listed a deduction for $14,787 in expenses related to getting her MBA from the online University of Phoenix. Her tax preparer told her this was legal under the IRS’s complicated and narrow definitions of deductible work-related educational expenses.
The Internal Revenue Service disagreed, and in late 2006, audited Singleton-Clarke, who conceded all of their rectifications – except the tuition deduction. On this point, she dug in her heels and fought the government agency, which barraged her with requests for forms and information; “At one point I had three requests for the same records, each with a different contact name. I had to spend hours calling to figure out who needed what,” she recounts.
The nurse eventually tried her case in Tax Court, a forum where individuals argue cases on their own behalf, unable to afford a lawyer. What she did have was an articulate, a steady resolve, and impeccable records – three qualities that go far when outnumbered in tax disputes.
The presiding judge, Stanley Goldberg, praised her: “…Ms. Singleton-Clarke was so articulate and well-prepared. Too many taxpayers are not.” And, more importantly for her and a generation of professional MBA seekers, he ruled in her favor. While decisions in small cases can’t be cited as precedent, her trial helped clarify the rules in a way that can only help those looking to lighten their tax burden as they pursue a degree.
