Is your MBA tax deductible?

A recent article (PDF) in the Georgetown Law Journal explores the ambiguity surrounding deductibility of expenses associated with a MBA program. Generally, educational expenses which qualify the taxpayer for a new occupation are not deductible, but normal and ordinary expenses in your line of business are deductible. There is some interesting examination of the regulations and court cases where this issue has been challenged, and the author concludes:

Although the line of Tax Court cases considering the deductibility of MBA related tuition expenses may at first appear to be a confusing and winding maze of inconsistency, more careful inspection reveals that—in most cases—the courts probably got it right. For the most part, MBA students at elite schools who attempted to take enormous tax deductions for career-transforming educational experiences were turned away, whereas those toiling away in an effort to improve their established business skills while continuing to work full-time were permitted to take their deductions. In short, at the end of the day it appears as if the courts generally muddled through the cluttered, outdated mess that is Treasury Regulation § 1.162-5 and came out with the right answers.