In Uncategorized on 11/04/2016 at 16:52

Usually the Rule 155 bean count is just arithmetic, and of interest only to the parties to the case. Today, however, CSTJ Panuthos (in an unwonted burst of modesty signing himself simply as “STJ”) has a different take, as IRS, in a moment of candor, gives an assist to Djamal Mameri, Docket No. 16403-15S, filed 11/4/16.

Djam had his deduction bounced for “…the computer for his English 5 class at Berkeley City College. Since a computer is not tuition or a fee charged by an educational institution, it would have to qualify under ‘books, supplies, and equipment’. See sec. 1.25A-2(d)(2)(ii), Income Regs. There is no evidence that petitioner was required to purchase the computer directly from Berkeley City College. Instead petitioner was able to and in fact did purchase the computer from a third party. Thus the cost of the computer is not an expense that qualifies for the education credit. See id. subpara. (6), Example (2).” Order, at p. 1.

As the parties went into the beancount, IRS came up with a save for Djam.

IRS tipped off Djam and CSTJ Panuthos that IRS had “…proposed regulation section 1.25A-1(d)(3) issued August 2, 2016. The proposed regulation interprets the meaning of ‘required for enrollment or attendance’ as set forth in section 25A(f)(1)(A) and (i)(3) to mean that ‘the course materials are needed for meaningful attendance or enrollment in course of study, regardless of whether the course materials are purchased from the institution’. Respondent proposes to concede that petitioner is entitled to an education credit for the purchase of the laptop computer since petitioner satisfies the requirements of the proposed regulation.” Order, at p. 1.

IRS did the right thing.

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