TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Monday, October 31, 2005

Can Witches Deduct Cost of Schooling?

Following up on this morning's two Halloween tax posts (here and here): the TaxProf Discussion Group was abuzz today about a follow up on a story we blogged earlier:  Tax Breaks for Witches.  From today's Associated Press:

Dutch witches were guaranteed a financial treat when the Leeuwarden District Court reaffirmed their legal right to write off the costs of schooling -- including in witchcraft -- against their tax bills. Those costs run to thousands of euros....

When he asked about it in parliament, Junior Finance Minister Joop Wijn wrote, "Under the circumstances, the cost of a course to become a witch qualifies as school fees."

We previously have blogged at some length the tax rules for deducting education expenses in the United States, albeit in the more pedestrian area of M.B.A. expenses (here, here, here, here, and here).  Under Reg. § 1.162-5, to be deductible the education cannot (1) meet the minimum educational requirements of the taxpayer's current trade or business, or (2) qualify the taxpayer for a new trade or business.  As several Tax Profs pointed out, the Dutch witches mentioned in the story would not be able to deduct their education expenses in this country because they are not currently in the witching biz, but those already practicing as witches presumably would be able to deduct courses in advanced witchcraft (if they had a profit motive and thus did not run afoul of the § 183 hobby loss rules.  Jim Maule has much more here.

Updates:  John Colombo (Illinois) & John Swain (Arizon) both called my attention to GCM 36993 (Feb. 3, 1977), which approved nonprofit church status for a group whose members "considered themselves to be pagans engaged in the practice of witchcraft" and who worshipped "the horned god," though it was specifically alleged that the horned god was not the devil.

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