Greenberg v. Commissioner

Ramon Greenberg (plaintiff) decided to become a psychiatrist while in medical school. Following medical school, Greenberg studied neurology for one year and had a two-year psychiatric residency. Greenberg then began practicing as a psychiatrist at a Boston hospital. At the same time, Greenberg applied for a six-year psychoanalysis training program that included seminars and courses on psychoanalytical theory, supervised handling of patients, and psychoanalysis of Greenberg himself. Greenberg stated that he believed that the intensive training would make him a better psychiatrist and explained how each component of the training would enhance his skills. Psychoanalysis was considered within the profession of psychiatry to be a helpful part of psychiatric training. After completing the training program, Greenberg planned to continue working part-time at the hospital in Boston while also conducting his own private practice. Greenberg planned to apply psychoanalytical methods to his patients as needed, and he believed that his psychoanalytic training would generate referrals because he would be a better psychiatrist. On Greenberg’s federal income-tax returns, Greenberg deducted the cost of his own analysis during the psychoanalytic training program. However, the Commissioner of Internal Revenue (defendant) and the tax court denied the deduction after finding that Greenberg had undertaken the psychoanalytic training to acquire a new specialty or skill as a psychoanalyst, rather than to sharpen his existing skills as a psychiatrist. Specifically, the tax court found that (1) Greenberg never said that his primary reason for the training was improving his skills as a psychiatrist, (2) Greenberg never said that he did not intend to practice psychoanalysis when he graduated, (3) Greenberg had indicated his intention to use psychoanalysis in treating some patients, and (4) Greenberg likely hoped that he would receive referrals for psychoanalytic treatment. Greenberg appealed.