## Facts

- Mr. and Mrs. Takahashi were California public school science teachers whose students included significant ethnic minority populations.
- California law required public school teachers to take educational courses relating to multicultural societies as part of professional obligations.
- The Takahashis traveled from California to Hawaii to attend a seminar on Hawaiian multiculturalism.
- The seminar was not required by, nor sponsored by, their school district; the Takahashis attended on their own initiative.
- The trip was primarily educational: nine of ten days were spent in classroom instruction and multicultural-related field trips.
- On their federal income tax return, the Takahashis deducted the travel and seminar costs as education expenses, treating them as ordinary and necessary business expenses under I.R.C. § 162(a).
- The Commissioner disallowed the deduction, asserting the expenses were not shown to be ordinary and necessary in the Takahashis’ trade or business of teaching science.

## Issues

1. Whether the costs of traveling to and attending the Hawaii multicultural seminar were deductible under I.R.C. § 162(a) as ordinary and necessary expenses incurred in carrying on the taxpayers’ trade or business of teaching.
2. Whether a multicultural-studies seminar not required by the employer could qualify as job-related education that maintained or improved skills required in the taxpayers’ current teaching positions, rather than nondeductible personal or general education.

## Decision

- The Tax Court ruled for the Takahashis on the education-expense issue and allowed the deduction (at least in substantial part).
- The court held the Hawaii seminar expenses were deductible under I.R.C. § 162(a) as ordinary and necessary business expenses related to the taxpayers’ existing employment as teachers.
- The court rejected the Commissioner’s contention that the expenses were insufficiently connected to the business of teaching science.
- The court found the travel was primarily for bona fide educational activities, not personal recreation, given the time devoted to instruction and related field activities.

## Legal Principles

- Under I.R.C. § 162(a), expenses are deductible if they are ordinary and necessary and incurred in carrying on a trade or business.
- Under Treasury regulations governing educational expenses, job-related education is deductible when it maintains or improves skills required in the taxpayer’s current employment; education that qualifies the taxpayer for a new trade or business is nondeductible.
- A course or seminar need not be employer-mandated to be job-related if the taxpayer shows a direct connection between the education and the skills required in the existing job.
- Travel-related education expenses may be deductible when the trip is primarily educational in character rather than a disguised vacation.

## Conclusion

The Tax Court held that the Takahashis’ costs to attend a Hawaii multicultural seminar were deductible as job-related education expenses because the education was sufficiently connected to the skills required in their existing teaching positions and the trip was primarily devoted to structured instructional activities.


Takahashi v. Commissioner, 87 T.C. 126 (1986)