## Facts

- Nora Payne Hill was a Virginia public high-school teacher for about 27 years, serving as head of the English Department and teaching English and journalism.
- She held Virginia’s highest-grade teaching certificate, which state law required teachers to renew periodically.
- For renewal, Virginia permitted either completing approved college coursework or passing an examination on designated books.
- In 1945, Hill chose the coursework option and attended Columbia University summer school in New York City.
- She incurred about $239.50 in tuition, travel, and related costs and deducted them on her 1945 federal income tax return as business expenses.
- The Commissioner disallowed the deduction as a personal, living, or family expense; the Tax Court sustained the disallowance as “primarily personal” and not sufficiently connected to “carrying on” a trade or business.
- Hill sought appellate review in the Fourth Circuit.

## Issues

1. Whether an experienced teacher’s expenses for summer-school coursework taken to renew a required teaching certificate are “ordinary and necessary” expenses incurred “in carrying on” a trade or business under § 23(a)(1)(A) of the Internal Revenue Code of 1939.

## Decision

- The Fourth Circuit reversed the Tax Court.
- The court held Hill’s summer-school expenses were deductible under § 23(a)(1)(A) as ordinary and necessary expenses incurred in carrying on her teaching business.
- The case was remanded with directions to allow the claimed deduction.

## Legal Principles

- Education-related expenditures may be deductible when they are proximately related to continuing an existing trade or business rather than undertaken to enter a new trade or for primarily personal improvement.
- “Ordinary” business expenses are not limited to expenditures made by all members of a profession; they can include costs that are normal and expected incidents of maintaining employment under applicable legal or practical requirements.
- Expenses incurred to satisfy legal or regulatory requirements necessary to continue in one’s current occupation can qualify as “ordinary and necessary” expenses of carrying on that occupation.

## Conclusion

The court treated the teacher’s summer-school costs as job-retention and credential-maintenance expenses tied to her existing teaching business, not personal education; therefore, they were deductible business expenses under the 1939 Code.


Hill v. Commissioner, 181 F.2d 906 (4th Cir. 1950)