Nurse Wins Favorable Ruling on Deducting MBA Educational Expenses

Roy Whitehead, JD, LLM, and Pam Spikes, PhD, CPA

Lori Singleton-Clarke, a nursing coordinator in Maryland, has achieved the status of folk hero among tax practitioners and tax professors by appealing an IRS ruling that denied her a $14,787 education expense deduction for completing an online MBA course in healthcare management to the U.S. Tax Court—and winning (Singleton-Clarke v. Comm'r [T.C. 2009-182 (December 2, 2009)]). It's noteworthy that she appealed pro se (without a lawyer). Because the Tax Court presumes that the commissioner's determination of deficiency set forth in the notice of deficiency is correct, only 14% of those who appeal to the Tax Court prevail. To prevail without the assistance of a lawyer is extremely rare and worthy of study. Her win has generated a great deal of favorable publicity for her at the expense of the IRS. The case is most important, however, because it demonstrates how to navigate the choppy seas of IRS regulations that pertain to the possible deduction of educational expenses.