14
Wednesday, December 10, 1975
University Daily Kansan
Tax bill a bane for professors
By RON HARTUNG
Staff Writer
The tax bill that the U.S. House of Representatives passed: Tuesday may be "a victory for both the taxpayer and the U.S. treasury," as one of its authors professors who have been taking deductions for home offices.
The bill (H.R. 10612), which calls for the extension of 1975 tax cuts, also contains a lesser-known revision of the business deduction taken for an office in one's home.
Professors are among those who have, in themselves, taken advantage of such a deduction.
The staff report of the House Ways and Means Committee singled out university professors in its illustration of how the home office deduction could be abused.
FOR EXAMPLE, THE REPORT stated, a professor who used his den for grading papers or preparing notes or exams might claim a deduction for use of that room, even if he hadn't incurred many more expenses that he would have in normal use of the house.
The bill would limit the deduction primarily to self-employed people whose homes were used regularly as the principal place of business, or to those people who weren't supplied an office by their employers.
The deduction would be limited to the amount of income earned by business owners.
The mixed reaction of University of Kansas professors to the revision was probably due in part to the still uncertain future of the total tax bill.
BUT SOME KU PROFESSORS are concerned.
"Those who continue to take (the deduction) may run an increasing risk of having it disallowed," John Tollefon, chairman of the School of Business, said last week.
Tolfson said that the maintenance of a home office and taking the deduction had become a fairly common practice among professors.
Sherwon Newton, associate professor of business, agreed that the measure would, in his opinion, make the professor's home office deduction more difficult to obtain
He said that he thought consultation might qualify as legitimate outside work but that he couldn't be sure until the wording of the bill was definite.
LARRY CHANCE, TAX analyst with Professional Tax Services in Lawrence, said that a professor who conducted outside business from his home office probably could justify the deduction under the new bill.
Even if a professor used his home office for schoolwork part of the time, he could still dedict that percentage devoted to his outside work. Chance said.
The apparent purpose of the bill, *Chance said*, is a crackdown on absences of the home staff.
tually need a home office. He said the Internal Revenue Service considered it an "annoyance kind of deduction" because it was hard to document.
CHANCE, AS WELL AS some KU professors, said the deduction usually wasn't very substantial. For a $3,000 home, be said, the deduction might be $100.
"Pretty clearly it's a threat to the income of some . . . professors," he said.
Jack Orch, associate professor of English, agreed that the deduction was small, but said that its elimination would affect the academic community.
Orchus said that it was necessary for many professors to do much of their classwork at home, for a number of reasons, including their university offices.
"I wouldn't want to spend 40 hours a week in a windowless office." Grüch said.
PERAPHIS THE AMERICAN Association of University Professors (AAUP) should have been actively lobbying against that part of the tax bill, according to Oruch, who is also chairman of the Academic Freedom Committee of the local chapter of the AAUP.
Peter Turk, acting assistant professor of journalism, is among those, however, who think the proposed revision would have little effect on a professor's deduction.
The problem, according to Turk, is to distinguish between university work, which should be conducted in the university office and outside work, which shouldn't.
For example, Turk said, a professor might have a contract with a publisher to write a book—a legitimate outside activity. Then, he said, a professor could make a case for needing a home office for work that wasn't strict university business.
AS IT'S NOW WRITTEN, the bill states that the home office must be the principal place of business, which doesn't seem to be the case for the professor.
But Turk said, a home office would be the principal place of an outside business, like book writing or consulting. Then, he concluded, it would be a fair deduction.
Many of the professors contacted said that they usually bought a house with an extra room to be turned into an office. If they didn't need an office, they said, they would buy a smaller house and, consequently, spend less.
All the debate, however, may be
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mby president U.S. pres. Peter deBrombise and Russell Long, LORG.
Finance Committee begins hearing on the bill Tuesday, said Thursday that the Senate might act just on the extension of the 1975 tax cuts and deal with the bill's other provisions next year.
academic for the moment, because the bill
generated the Senate's support from
The problem is a looming confrontation with President Ferdinand, who has promised to lift the siege.
Kansas Sen. Robert Dole is a member of the committee.
But the home office deduction, which one professor termed "small potatoes," may be tightened or eliminated for professors and others not self-employed. Tax reform adjusts income brackets so that no one is even so similar in no single crackdown, for example, on real-estate tax shelters for the wealthy.
equal to the tax cut amount. If the 1975 cuts are not extended by Jan. 1, they will expire.
Still, Long could state, "We have regained a part of the country's confidence by eliminating some of the worst injustices in the tax code."
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