James K. Spartan (JK) was honorably discharged from the US Army (Rangers) on July 1, 1986....
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James K. Spartan (JK) was honorably discharged from the US Army (Rangers) on July 1, 1986. His service earned him a monthly (adjusted for inflation) pension of $5,000. He had served multiple tours of duty in Vietnam, Panama, Europe and other locations he chose (or was not permitted) to discuss. Along the way in his military career JK had earned a B.S. degree in Management from The Ohio State University and a MBA degree from the University of Maryland. His last duty station was MacDill AFB (Central Command) in Tampa where he had (in his spare time) also served as an adjunct instructor for UT's MacDill college credit programs where he taught intro to business classes. JK's high classroom student evaluations earned him an interview for a job on UT's main campus. His MBA degree qualified JK for the minimum educational qualifications at the time for UT's faculty - he was hired as an instructor of business. JK was hired to teach BUS 101 and an occasional section of Acc202 beginning in fall, 1986. JK enjoyed high student evaluations and was an active member of the UT community. JK's annual evaluation was based 100% on his teaching. In 1991 the newly formed College of Business (now the John H. Sykes College of Business) declared its intention to seek AACSB accreditation. AACSB accreditation standards typically require that 75-80% of all courses or hours offered be led by so- called terminally degreed faculty-those holding a doctorate. JK learned from the Dean of the College of Business that his future at UT would be short if he did not obtain a doctorate (Ph.D.) degree. JK surmised he would need to obtain a Ph.D. degree in order to stay at UT and advance from his instructor job to assistant then associate and (hopefully) ultimately Full Professor. In fall, 1993 JK left UT and enrolled in Georgia State University's Ph.D. program in Accounting and took three years away from UT on the way to successfully completing his Ph.D. degree. JK continued to teach, on a part time basis, for both Mercer University and Emory University while pursuing his Ph.D. JK deducted 100% of his tuition, fees and supplies at Georgia State on his 1993-6 tax returns claiming that the expenses were education expenses for business (not American Opportunity/Hope or Lifetime Learning). JK re-joined the UT faculty in 1996 this time in a role as Assistant Professor of Accounting. JK's teaching assignments included Intermediate Accounting and Graduate Advanced Accounting. JK's work was evaluated 50% on teaching, 35% on published scholarship and 15% on University service. A significant portion of JK's time was now dedicated to publishing high quality scholarship. In 1997 the IRS selected JK's 1996 return for examination and quickly expended the inquiry to include the 1993-1996 returns. JK signed a waiver of the statute of limitations offered by the IRS in exchange for a more detailed evaluation of his situation and to give him time to collect evidence in support of his contention that the Georgia State expenses were all deductible education expenses. What result? James K. Spartan (JK) was honorably discharged from the US Army (Rangers) on July 1, 1986. His service earned him a monthly (adjusted for inflation) pension of $5,000. He had served multiple tours of duty in Vietnam, Panama, Europe and other locations he chose (or was not permitted) to discuss. Along the way in his military career JK had earned a B.S. degree in Management from The Ohio State University and a MBA degree from the University of Maryland. His last duty station was MacDill AFB (Central Command) in Tampa where he had (in his spare time) also served as an adjunct instructor for UT's MacDill college credit programs where he taught intro to business classes. JK's high classroom student evaluations earned him an interview for a job on UT's main campus. His MBA degree qualified JK for the minimum educational qualifications at the time for UT's faculty - he was hired as an instructor of business. JK was hired to teach BUS 101 and an occasional section of Acc202 beginning in fall, 1986. JK enjoyed high student evaluations and was an active member of the UT community. JK's annual evaluation was based 100% on his teaching. In 1991 the newly formed College of Business (now the John H. Sykes College of Business) declared its intention to seek AACSB accreditation. AACSB accreditation standards typically require that 75-80% of all courses or hours offered be led by so- called terminally degreed faculty-those holding a doctorate. JK learned from the Dean of the College of Business that his future at UT would be short if he did not obtain a doctorate (Ph.D.) degree. JK surmised he would need to obtain a Ph.D. degree in order to stay at UT and advance from his instructor job to assistant then associate and (hopefully) ultimately Full Professor. In fall, 1993 JK left UT and enrolled in Georgia State University's Ph.D. program in Accounting and took three years away from UT on the way to successfully completing his Ph.D. degree. JK continued to teach, on a part time basis, for both Mercer University and Emory University while pursuing his Ph.D. JK deducted 100% of his tuition, fees and supplies at Georgia State on his 1993-6 tax returns claiming that the expenses were education expenses for business (not American Opportunity/Hope or Lifetime Learning). JK re-joined the UT faculty in 1996 this time in a role as Assistant Professor of Accounting. JK's teaching assignments included Intermediate Accounting and Graduate Advanced Accounting. JK's work was evaluated 50% on teaching, 35% on published scholarship and 15% on University service. A significant portion of JK's time was now dedicated to publishing high quality scholarship. In 1997 the IRS selected JK's 1996 return for examination and quickly expended the inquiry to include the 1993-1996 returns. JK signed a waiver of the statute of limitations offered by the IRS in exchange for a more detailed evaluation of his situation and to give him time to collect evidence in support of his contention that the Georgia State expenses were all deductible education expenses. What result?
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