A court denies an education expense deduction. The Court of Federal Claims ruled that the costs of participating in a PhD program couldn’t qualify for the education expense deduction because the studies would lead the student to qualify for a new career. It also held that the taxpayer had failed to show that his studies maintained and improved required skills or were required by law. … Continue reading 2017 – 10/24

Some tax rules offer flexibility for taxpayers if they can prove they qualify. For example, individuals who take distributions from their retirement plans before reaching age 59½ are generally subject to a 10% “early withdrawal” penalty. However, several exceptions exist, including: to help fund a first-time home purchase, to pay qualified higher education expenses, to cover certain medical expenses, to pay an IRS levy and … Continue reading 2017 – 10/26

Indirect loans to a church disqualified its retirement income account plan. In Chief Counsel Advice (CCA), the IRS concluded that two indirect loans made by employee accounts in a church retirement income account plan to the church caused the disqualification of the plan. According to regulations, in order to be a retirement income account, “assets held in the account cannot be used for, or diverted … Continue reading 2017 – 10/25