In order to have deductible un-reimbursed business costs, you must be employed or self-employed. If you are absent for work for less than a year in order to get education to maintain your skills and then return to the same general line of work, the education received during this time qualifies as work-related. You must already meet the minimum educational requirements of your present job or profession. The minimum educational requirements may be set by law, by professional standards, or by an employer. The course you are taking must be of the kind that maintains or improves your job or professional skills or is required by your employer to stay in your present position AND it cannot lead to qualification for a new job or profession. If your employer requires the course you are taking but it qualifies you for a new profession, it is not a deductible work-related expense (but it may qualify the taxpayer for other educational tax relief).

Bar or CPA review courses are not deductible work-related courses because they are part of a program of study that prepares you for a new profession. In addition, travel as a form of education is not deductible even if it is directly related to your job or profession.

Deductible Expenses

If the courses taken qualify as work-related education, deductible expenses included tuition, textbooks, lab fees, equipment, and other required expenditures.

Deductible travel expenses include one-way or round-trip local transportation costs (bus, subway, train, car, etc.). If you are required to stay away overnight attending a qualified course, you may deduct the cost of travel, lodging, plus half of the cost of meals. You may not deduct any personal expenses incurred during the time away from home, including sightseeing, entertaining, and extensions of the trip.

An individual subject to the expatriation tax is taxed as if he or she had been a citizen or resident during the 10-year period following the loss of citizenship or residency, but only if that tax is greater than the tax imposed on nonresident aliens. The expatriation tax applies to the individual's gross income effectively connected with the conduct of a U.S. business or trade as well as U.S. source income that is not effectively connected with a U.S. business or trade. Income subject to the tax includes any gain realized on the disposition of property or any income from property contributed to specified foreign corporations during the 10-year period. The expatriate subject to taxation is entitled to deductions to the extent that they are allocable to gross income, but any unused capital losses may not be carried over to another tax year. In addition, the expatriate may be subject to the alternative minimum tax.

Relief from double taxation of income is provided by a credit for foreign taxes paid on income that is subject to U.S. taxation solely by reason of the expatriation tax.

If the taxpayer has filed an action for a refund in a district court or the U.S. Court of Federal Claims and receives a notice of deficiency from the IRS, he may still file a petition for review in the Tax Court. The taxpayer has the choice of which court shall have jurisdiction over the tax matter. By filing a petition in the Tax Court, the taxpayer causes that court to have sole jurisdiction, but by failing to file a Tax Court petition, the district court or the U.S. Court of Federal Claims would have sole jurisdiction. However, if the case in the district court or the U.S. Court of Federal Claims has already proceeded to a hearing, that court retains jurisdiction.

A taxpayer who loses in the Tax Court has the right to challenge that decision in the U.S. Court of Appeals by filing a timely notice. If the taxpayer wants to have the assessment postponed until after the appeal is heard and decided, he must file an appeal bond with the Tax Court guaranteeing payment of the deficiency as finally determined.

To qualify for innocent spouse relief under the Internal Revenue Code, the applicant must show all of the following: that he/she filed a joint return that contained an understatement of taxes resulting from a spouse's erroneous items; that the innocent spouse did not know and had no reason to know about the understatement; and that it would be unfair to hold the innocent spouse liable.

Considerations

In evaluating whether it would be unfair to hold one spouse liable for an understatement, the IRS considers all facts and circumstances, including whether the innocent spouse either directly or indirectly received a significant benefit from the understatement and whether the innocent spouse was later deserted or divorced by the other spouse.

In a fairly recent change to the rules, an innocent spouse may now apply for partial relief from an understatement of taxes. In some situations, one spouse may know or have reason to know that there is some understatement of tax due to erroneous items of the other spouse. If, however, there is an understatement above and beyond the known understatement, the spouse may be considered innocent and not liable for the additional portion.

After the IRS receives an application for innocent spouse relief, it is required to inform the other spouse of the request, and the other spouse is entitled to participate in the determination process.

Relief by Separation of Liabilities

Another form of relief available to one spouse after the filing of a joint income tax return is the allocation of an understatement of taxes, interest, and penalties between the spouses. As in the innocent spouse relief, the spouse seeking relief must prove that he or she neither knew nor had reason to know about the understatement. However, there is a domestic abuse exception to the lack of knowledge requirement. If the spouse seeking relief had actual knowledge of the understatement but was a victim of domestic abuse before signing the tax return, he or she might be able to prove that it was signed under duress, thereby negating its binding effect.

A spouse is only entitled to a separation of liabilities if, after filing a joint return, he or she is divorced, widowed, or legally separated from the other spouse or is estranged and living apart from that spouse. The IRS will refuse to grant relief if it determines that the spouse seeking relief had knowledge of the understatement, was part of a tax fraud scheme, or received property from the other property in order to avoid the payment of taxes.

Equitable Relief

If a spouse is ineligible for either of the other two forms of relief from a tax liability arising from an understatement of taxes by a spouse, he or she might be entitled to equitable relief. In determining whether to grant equitable relief, some of the factors considered by the IRS include: whether the parties are separated or divorced; whether the applicant spouse will suffer an economic hardship if there is no relief; whether there is a legal obligation to pay the taxes, such as through a divorce decree; whether the spouse received a significant benefit from the understatement beyond normal support; and whether there was knowledge of the understatement. Abuse of the applicant or poor mental and physical health weigh in favor of equitable relief.