John Melnik and Judith Melnik v. United States

OPINION

The appeal in this tax case is from the action of the district court in granting summary judgment to the United States on a claim by the taxpayers for the de-ductibility of educational expenses.

The district court applied Treasury Regulation § 1.162-5(b)(3) to Melnik, an Internal Revenue Agent doing field audits, and determined that his expenditures in acquiring a law degree were made to qualify him for a new trade of business and were, therefore, nondeductible. The taxpayers paid and sued for a refund. Melnik challenges the interpretation of the regulation by the court and also its…