United States Tax Court

T.C. Summary Opinion 2023-1

JOHN M. VASSILIADES AND ELIZA ORTIZLUIS VASSILIADES,

Petitioners

v.

COMMISSIONER OF INTERNAL REVENUE,

Respondent

—————

Docket No. 12283-20S. Filed January 9, 2023.

—————

John M. Vassiliades and Eliza Ortizluis Vassiliades, pro sese.

Jeffrey A. Rodgers and James D. Lyon, for respondent.

SUMMARY OPINION

PANUTHOS, Special Trial Judge: This case was heard pursuant 

to the provisions of section 7463 of the Internal Revenue Code in effect 

when the petition was filed.1 Pursuant to section 7463(b), the decision 

to be entered is not reviewable by any other court, and this opinion shall 

not be treated as precedent for any other case.

In a notice of deficiency dated September 21, 2020, respondent 

determined a deficiency in petitioners’ federal income tax of $2,500 for

taxable year 2018 (year in issue). The deficiency is attributable entirely

to the disallowance of the American Opportunity Credit (AOC) that

petitioners claimed on their 2018 federal income tax return. The sole 

1 Unless otherwise indicated, all statutory references are to the Internal 

Revenue Code (Code), Title 26 U.S.C., in effect at all relevant times, all regulation 

references are to the Code of Federal Regulations, Title 26 (Treas. Reg.), in effect at all 

relevant times, and all Rule references are to the Tax Court Rules of Practice and 

Procedure.

Served 01/09/23
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issue for decision is whether petitioners are entitled to an AOC for the 

year in issue.

Background

Some of the facts have been stipulated and are so found. We 

incorporate the Stipulation of Facts and the attached Exhibits by this 

reference. The record consists of the Stipulation of Facts with attached 

Exhibits and the testimony of John M. Vassiliades (petitioner).

Petitioners resided in California when the Petition was timely 

filed.

I. Education Expenses

Petitioner has a daughter, AM, from a prior relationship, who was 

enrolled in postsecondary education at University College London (UCL)

during the year in issue.2 UCL is a university in London, United 

Kingdom (UK). AM was enrolled full time at UCL as a student in the 

division of medicine, pursuing a bachelor’s degree from September 2017 

to July 2020.

AM had a bank account at Westminister Bank in the UK while 

she was enrolled in UCL. Petitioner would wire funds to AM’s account,

and AM would pay for school tuition, fees, and other expenses. The UCL 

Student Fees Department notes an online payment on AM’s account of 

£3,083 on September 12, 2017. Payment was made by “Online Payment 

by credit or debit card from Mrs Anna Theorides.” Anna Theorides is 

AM’s mother and not a party to this matter.

On December 11, 2017, petitioner wired £2,000 to AM converted 

from $2,762.40 as an international wire transfer from petitioner’s 

account at Bank of America (BOA). On March 8, 2018, petitioner 

ordered 2,000€, converted from $2,610.60 via BOA Foreign Currency 

Services to be picked up at a local BOA branch in La Palma, California.

On December 15, 2018, petitioner wired £2,313.57 to AM, converted 

from $3,000.

2 It is the policy of this Court not to identify minor children by name. 

Petitioner’s daughter’s age is unclear from the record. Therefore, we refer to 

petitioner’s daughter by her initials. See Rule 27(a)(3).
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Petitioners’ home was burglarized on November 4, 2018, resulting 

in the theft of valuables and various important documents. A police 

report was filed describing the burglary and listing missing property.

II. Petitioners’ Tax Return and Examination

Petitioners timely filed their 2018 Form 1040, U.S. Individual

Income Tax Return, on March 22, 2019. A paid return preparer assisted 

petitioners. Petitioners claimed AM as a dependent for the year in issue.

On their Form 8863, Education Credits (American Opportunity

and Lifetime Learning Credits), petitioners claimed the AOC, consisting 

of a nonrefundable education credit of $1,500 and a refundable

education credit of $1,000 due to qualified education expenses paid 

during AM’s enrollment at UCL for the year in issue. Petitioners did 

not receive a Form 1098–T, Tuition Statement, from UCL for the year 

in issue.

Upon examination of the return, petitioners failed to establish to 

respondent’s satisfaction that they paid qualified education expenses 

during the taxable year. On September 21, 2020, respondent issued a 

notice deficiency to petitioners for the year in issue disallowing $2,500

of claimed AOC.

Discussion

I. Burden of Proof

In general, the Commissioner’s determination set forth in a notice 

of deficiency is presumed correct, and the taxpayers bear the burden of 

proving that the determination is in error. Rule 142(a); Welch v. 

Helvering, 290 U.S. 111, 115 (1933). Like deductions, tax credits are a 

matter of legislative grace, and the taxpayer bears the burden of proving 

that he or she is entitled to any credit claimed. See Rule 142(a); Deputy 

v. du Pont, 308 U.S. 488, 493 (1940); New Colonial Ice Co. v. Helvering, 

292 U.S. 435, 440 (1934). Taxpayers must also maintain adequate 

records to substantiate the amounts of any credits. See § 6001; Treas. 

Reg. § 1.6001-1(a).

In certain circumstances the burden of proof shifts to the 

Commissioner if the taxpayers introduce credible evidence with respect 

to any factual issues relevant to ascertaining the taxpayers’ tax liability. 

See § 7491(a)(1). Because petitioners have not alleged or shown that 

section 7491(a) applies, the burden of proof remains on them.
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II. Education Credits

The Code allows for a variety of education credits, including the 

AOC. The AOC provides for a credit against tax equal to 100% of 

qualified tuition and related expenses paid by a taxpayer during the 

taxable year up to $2,000, plus 25% of such expenses paid that exceed 

$2,000 but do not exceed $4,000, allowing for a maximum credit of 

$2,500. § 25A(b)(1). “Qualified tuition and related expenses” include 

tuition and fees at an eligible educational institution that the taxpayer, 

the taxpayer’s spouse, or the taxpayer’s dependent attends, as well as 

course materials. § 25A(f)(1)(A), (D). Up to 40% of the credit may be 

refundable. § 25A(i). The credit is allowed for the first four years of 

postsecondary education for qualified tuition and expenses including 

required course materials. § 25A(b)(2)(C), (f)(1)(D). The credit is 

available only if (among other things) the student is enrolled at least 

half time for at least one academic period that begins during the taxable 

year. See § 25A(b)(2)(B).

AM was claimed as a dependent by petitioners and was enrolled 

full time at UCL, an eligible, accredited institution during the year in 

issue. To substantiate AM’s education expenses, petitioners provided 

receipts of various wire transfers to AM, conversions of currency, and a 

receipt for an online payment made to UCL in 2017. While AM received 

money from petitioner during the year in issue, the submitted UCL 

receipt is for a different year and notes that the payment was not made 

by petitioner nor AM. Rather the payment for that year was made by 

AM’s mother, who is not a party to this matter. Petitioner testified that 

he was unable to produce a tuition receipt for the year in issue because 

of the home burglary in November 2018. Further, he testified he was 

unable to travel to the UK to retrieve relevant documents and that AM 

was unavailable to access receipts from UCL.3

While we are sympathetic to petitioners’ loss and difficulty in 

procuring documents, from the record before us we are unable to 

conclude that petitioners paid qualified tuition and related expenses to 

UCL. While it is likely that payments were made to UCL in 2018 for 

3 At trial the Court expressed concern about petitioners’ failure to provide 

evidence to substantiate payments to UCL in 2018. Among other options, the Court 

suggested that AM might be approached to provide some evidence of payments to UCL. 

The Court left the record open to permit petitioner to consider additional filings. In a 

subsequent Joint Status Report the parties reported they were unable to confer with 

AM, and petitioner indicated that he had no further information or documents to 

provide to the Court.
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AM’s continuing education, the record does not support petitioner’s 

claim that he made any such payments. For these reasons, petitioners

have failed to demonstrate their entitlement to the AOC for the year in 

issue.

We have considered all of the parties’ arguments, and, to the 

extent not addressed herein, we conclude that they are moot, irrelevant, 

or without merit.

To reflect the foregoing,

Decision will be entered for respondent.