Myrup v. State Dept. of Revenue, 2013 MT 136 (May 21, 2013) (5-0) (Cotter, J.)

Issue: Whether the district court properly affirmed STAB’s denial of tax deductions Myrup claimed for education expenses.

Short Answer: Yes.

Affirmed

Facts: Paula Ehrmantraut-Kiosse and Randy Myrup sought tax deductions for educational expenses incurred in Paula’s pursuit of a doctoral degree in psychology. DOR disallowed the deductions for failure to meet 26 CFR § 1.162-5. Paula and Randy appealed to the ODR, which affirmed, and then appealed ODR’s decision to STAB, which held a hearing and upheld the disallowance.

Procedural Posture & Holding: Paula and Randy sought judicial review of STAB’s decision in the district court, which denied their petition. Paula and Randy appeal, and the Supreme Court affirms.

Reasoning: An educational expense is deductible only if the primary purpose is to improve one’s skills at one’s present job. STAB found that Paula pursued her education to become a clinical psychologist, not just improve her skills as a counselor and the Court holds those findings are supported by substantial evidence in the record.