[net.taxes] Tax question for academicians

warren@ihnss.UUCP (Warren Montgomery) (02/20/84)

I have several friends who have at times claimed that certain kinds
of payments to university professors (or pos-doc's) are non-taxable
or partially taxable.  None of them really know, but none have been
audited to find out.  I would be curious on any experience in this
area from others.  The two instances I can recall off hand are:

Claiming that grant-supported salary payments for summer
(non-teaching) periods are fellowships, and tax exempt up to some
limit.

Claiming that sabatical pay is under some circumstances tax exempt
for similar reasons.

The reasoning is similar to that behind tax free graduate
fellowships, but I have no idea of the legal reasoning behind the
arguments.  Any comments?

-- 

	Warren Montgomery
	ihnss!warren
	IH x2494

mcmillan@eosp1.UUCP (John McMillan) (02/22/84)

When I was a graduate student and research assistant, I declared my tuition
money as a deduction by neat piece of reasoning.  I carefully explained it in an
attachment on my income tax, but the amount involved was very small, so I
cannot draw any inferences from the IRS's failure to audit me.  The law may
have changed, but in 1964 it went like this:

There were a very few well-accepted cases where tuition was tax deductable.
One of the cases was: where it is necessary to go to school in order to keep
your job.  I carefully explained to the IRS that Princeton Graduate School
would only give Research Assistanceships to full time graduate students;
if I stopped going to school I would lose my job.  Therefore the tuition was
deductable.  Now there is obviously a logical error in that bit of reasoning
someplace (confusing cause and effect?), but it seemed to work very well.

I also brought this argument to the attention of the Graduate School
Administration, hoping to save thousands of dollars for the students as a
group, but the deans were not interested in my argument.
					- Toby Robison
					allegra!eosp1!robison
					decvax!ittvax!eosp1!robison
					princeton!eosp1!robison
					(NOTE! NOT McMillan; Robison.)