The taxpayer was employed as a nurse in a plastic surgery clinic operated by Kaiser Permanente.
Kaiser’s dress code required the taxpayer to be dressed in comfortable clothes and in a manner that reflected her profession as a nurse. Neither Kaiser nor her union had a policy that allowed reimbursement for the expenses she incurred to purchase clothing that satisfied her employer’s dress code.
While at work, the taxpayer wore clothing that resembled scrubs that she purchased at her own expense from local department stores. In the operating room she was required to wear scrubs provided by Kaiser. Routinely, depending upon the operation schedule for any given day, she changed back and forth between her scrub like clothing and the operating room scrubs her employer provided.
The taxpayer deducted these costs, along with the cost of cleaning, as unreimbursed employee business expenses. The IRS disallowed the deduction.
Note: The tax year at issue was prior to the temporary suspension of miscellaneous itemized deductions for tax years beginning after December 31, 2017 and before January 1, 2026. The rules at issue in this case, however, are still applicable for self-employed taxpayers.
The court stated the cost of a business wardrobe, even if required as a condition of employment, is considered a nondeductible personal expense under IRC section 262. Those costs are not deductible even when it has been shown that the particular clothes would not have been purchased but for the employment.
Clothing costs are deductible as ordinary and necessary business expenses under IRC section 162 only if:
- The clothing is of a type specifically required as a condition of employment,
- It is not adaptable to general use as ordinary clothing,
- It is not so worn.
The court stated the taxpayer was required to dress professionally and comfortably for her job as a nurse.
To do so, she purchased shirts and pants at department stores. Because the clothing resembled scrubs, the clothing was not adaptable to general use as ordinary clothing outside of her employment. Consequently, the cost of the clothing and the cost to clean the clothing are deductible.
Note: Of interest in this case is that the scrubs were purchased at a local department store and merely resembled work clothes. They did not need to be purchased through some official medical uniform supply company, nor did they need to have a company logo attached. The court focused on whether or not the clothing was adaptable to general use as ordinary clothing.
