Semaria Consulting

Certified Fraud Examiner, Forensic Accountant & Former IRS Agent

Call: 718-531-1105
DrFraud.com   |   IRSAudit.com
  • Home
  • About Us
    • About Ron Semaria
    • Awards & Citations
    • Volunteer Work
    • Contact Information
  • Services
  • Affiliations
  • Press Releases
  • News Articles
    • News Articles
    • Tax Q&A
    • News Article Index
  • Call: 718-531-1105
  • LinkedIn

Psychoanalysis Deductible As A Business Expense – Not As A Medical Expense

Psychoanalysis Deductible As A Business Expense – Not As A Medical Expense

Clinical Analysis

The IRS acquiesced to a Tax Court decision (Jose P. Iglesias (1981) 76 TC 1060,acq. 1981-47 IRB-5) that allowed a physician who underwent psychoanalysis while a resident in psychiatry to deduct the cost as a business expense; based on the fact that it was an educational expense.

Deductible business expenses include the cost of education aimed at maintaining or improving the taxpayer’s skills in the job he already has rather than preparing him for a new trade or profession. The cost of psychoanalysis was deductible under this rule despite the fact that it was undertaken by the taxpayer in the course of a program that led to his becoming a board certified psychiatrist.

Jose Iglesias, a licensed physician, was a second-year resident in the psychiatric department of a hospital, where his duties included treating psychiatric patients. Upon completing his residence, he would be entitled to take exams to become a board certified psychiatrist. Although doctors in his program weren’t required to undergo psychoanalysis and deducted it as a business expense.

The Tax Court rejected the contention of IRS that his psychoanalysis was undertaken as part of a program of study aimed at qualifying him for a new trade, namely a psychiatric specialty. He wasn’t yet a board certified psychiatrist when psychoanalyzed but he was engaged in treating psychiatric patients and the psychoanalysis enhanced his ability to do so. Psychoanalysis wasn’t a prerequisite to board certification. As a result the court held that the cost of the psychoanalysis was incurred for education to maintain or improve his skills in the job he already held, and thus was a deductible business expense.


In another case, (Voigt, TC), a clinical social worker was entitled to a business expense deduction for the costs she incurred in undergoing psychoanalysis. The treatment did not qualify her for a new trade or business but, by relieving her own anxiety and depression and teaching her to separate her conflicts from those of her patients, enabled her to perform her job with greater skill.

The Tax Court disagreed. Education needn’t be restricted to formal instruction, and programs at psychoanalytic institutes include a student’s personal analysis. Since the analysis qualified as education, maintained and improved skills required in her profession, & didn’t qualify her for a new one, it was deductible as a business education expense.

If you have any questions or require further info please call 718-531-1105 or send an email.
This web site and these articles are not tax or legal advice and are not intended as tax or legal advice. They are intended to provide only general, non-specific legal information and are not intended to cover all the issues related to the topic discussed. The specific facts that apply to your matter may make the outcome different than would be anticipated by you. This web site and these articles are based on United States law. You should consult with an accountant or lawyer familiar with the issues. This web site and the articles contained on this web site are not solicitations.

 

Filed Under: News Articles Tagged With: analysis, business expense, deductible, education, medical expense, psychoanalysis

You may also be interested in

  • De Minimus Benefits

    De Minimus Benefits

  • Fringe Benefits – Rules for Transportation Tax Breaks

    Fringe Benefits – Rules for Transportation Tax Breaks

  • Write Off Your Swimming Pool

    Write Off Your Swimming Pool

  • Computer Software Deduction

    Computer Software Deduction

Search

Recent News Articles

  • 9/11 is a special day
  • IRS Accidentally Exposed Tens of Thousands of Social Security Numbers
  • IRS Tax Audits – When It Pays To Ignore An IRS Audit Notice
  • The Disappearing Check 21 Law – Check Clearing For The 21st Century
  • IRS Tax Audits – Know Your Rights Before An Audit Begins
Index Of All News Articles

More Information

Privacy Policy
Links
RSS Feed
Sitemap
Disclaimer

Contact Info:

Ronald Semaria
Semaria Consulting
1408 East 66th St
Brooklyn, NY 11234
Email: info@semaria.com
LinkedIn

Phone Numbers:

Phone: 718-531-1105
Toll-Free: 866-531-1105
Toll-Free: 888-IRSAUDIT
Toll-Free: 888-RONTAXES
Fax: 718-444-7152

Websites:

www.Semaria.com
www.DrFraud.com
www.IRSAudit.com
Copyright © Semaria Consulting 1970-2021