T.C. M em o . 2 0 1 7 -1 9

UNITED STATES TAX COURT

CHRISTIAN CHUKW UEM EKA IBEAGWA, Pet i t i o n er v . COM M ISSIONER OF INTERNAL REVENUE, Res po n d en t

Do ck etNo . 1 9 9 14 -1 4
. Fi l edJ an uary2 6 , 2 0 1 7
.

Ch ri st i an Ch u kwu em ek a Ib eag wa, p ro s e. J u l i e A. Sch wo eb el , fo r res p o n d en t
.

M EM ORANDUM FINDINGS OF FACT AND OPINION PARIS, J u d g e: Res p on d en td et erm i n ed a d efi ci en cy o f $ 4 , 6 6 4 i n p et i t i o n er’ s Fed eral i n co m e t ax fo r h i s t ax ab l e y ear 2 0 1 1 . Th e i s s u e fo r d eci s i o n i s wh et h er p et i ti o n er i s en ti t l edt o a refu n dab l e fu el t ax cred i tu n der s ect i o n 3 4 (a)(3 ) 1

1 Un l es s o t h erwi s e i nd i cat ed , al l s ect i o n referen ces are t o th e In t ern al (co n ti n u ed ...)- 2
-

[* 2 ] wi t h res p ectt o cert ai n p ro p an e p u rch as es t h ath e cl ai m edh e m ad e. Th e Co u rt h o l d s th ath e i s n o t
. FINDINGS OF FACT So m e o f t h e fact s h av e b een s ti p u lat ed an dare s o fo u n d. Pet it i o n er res i d ed i n W i sco ns i n wh en h e t im el y fi l edth e p et i t i o n . Th ro u g h o u tth e p eri o d2 0 0 4 th ro ug h 2 0 10 , p et i t i o n er v o l u n t eered as a g ran t wri t er, adu l tedu cat o r, an d Su n d ay s ch oo l t each er fo r t h e Un i t y Ch u rch o f Go di n Ch ri s t(Un i t y

Ch u rch ) i n Ch i cag o , Il l i n o i s . Th ro u g h ou tth atp eri o d an d2 0 1 1 , Un i ty Ch u rch was an o rg an i zat i o n d es cri b edi n s ect i o n 5 0 1 (c)(3 ) an dex em p tfro m t ax u n der s ect i o n 5 0 1 (a). In 2 0 1 1 p et i t io n er m o v edt o W i s co n s i n an dn o l o n g er act i vel y v o l u n teered atUn i t y Ch u rch
. On Decem

b er 1 4, 2 00 9 , J an u ary

4 , 2 0 10 , an dFeb ru ary

1 , 2 01 0 , p et i t i o n er p u rch as edcert ai n u n i d en t i fi edg o o d s an d/ o r cert ai n u n i d en t i fi eds erv i ces fro m Tu l s a Po w er Serv ice. Tu l s a Po wer Serv i ce s ol dfu el an d p ro p an e, an d s erv i ced t ru ck s . Pet i t i o ner d i dn o tp u rch as e an y p ro p an e i n 2 0 1 1
. Pet i t i o ner fi l eda Fo rm 1 0 4 0 , U.S. In d i v i du al In co m e Tax Retu rn , fo r each
o f h i s t ax ab l e y ears 2 0 0 5 , 2 0 0 6, 2 0 0 7 , 2 0 08 , 2 0 0 9 , 2 01 0 , an d2 0 1 1 . Pet i t i o n er d i d

1 (...co n t in u ed ) Rev en u e Co de i n effect fo r t h e y ear at i s s u e, an d al l Ru le referen ces are t o th e Tax Co u rtRu l es o f Pract i ce an dPro cedu re.- 3
-

[* 3 ] n o ti n cl u d e a Fo rm 4 1 3 6 , Cred i tfo r Fed eral Tax Pai d o n Fu el s , wi t h h i s 2 0 0 5 ret u rn , 2 0 0 6 retu rn , 2 0 0 7 return , 2 00 8 retu rn , o r 2 0 0 9 ret u rn . No r d i dp et i ti o n er cl ai m a refu n d ab l e fu el t ax cred i tu n d er s ect i o n 3 4 (a)(3 ) i n an y o f t h o s e ret u rn s . In ad d it i o n , p et i t i o n er d i dn ot fi le Fo rm 1 0 4 0 X , Am en d edU.S. In d i v i du al In co m e Tax Ret u rn , fo r an y

o f h i s t ax ab l e y ears 2 0 0 5 , 2 0 0 6 , 2 0 0 7, 2 0 0 8 , an d2 0 0 9. Pet i t i o ner i n cl ud edwi th h i s 2 0 1 1 ret u rn Fo rm 4 13 6 , i n wh i ch h e cl ai m eda refu nd ab l e fu el tax cred ito f $ 4 ,9 1 6. OnM arch 1 6 , 2 0 1 2 , p et i t i o n er fi l edan
am en d edretu rn fo r h i s t ax ab l e y ear 2 0 1 1 (2 01 1 am en d edretu rn ). In h is 2 0 1 1
am en d edretu rn , p et i t i o n er cl ai m edas “ Refu n d ab l e Cred i t s fro m Fo rm s 4 13 6 ” $ 4 ,6 6 4 , wh i ch was $ 2 52 l es s t h an th e am o u n to f t h e refu nd ab l e fu el t ax cred i tth at h e h adcl ai m edi n h i s 2 0 1 1 ret u rn . Pet i t i o ner i n cl ud edwi th h i s 2 0 1 1 am en d edreturn fi v e Fo rm s 4 1 3 6 , o n e wi t h
res p ectt o each o f h i s t ax ab le y ears 2 0 0 5 , 2 0 0 6 , 2 0 0 7, 2 0 0 8 , an d2 0 0 9. In th o s e Fo rm s 4 1 3 6 , p et it i o n er cl ai m edth e p rev i o u s y ears ’ refu n d ab l e fu el t ax cred i t s as fo l l o w s :- 4
-

[* 4 ]

Fo rm 4 1 3 6 Am o u n t o f cl ai m edcred it 2 0 0 5 $7 3 2 2 0 0 6 9 8 5 2 0 0 7 9 8 2 2 0 0 8 9 8 2 2 0 0 9 9 8 3 To t al 4 ,6 6 4 On J u ly 2 4 , 2 0 13 , th e In t ern al Rev en u e Serv i ce fro ze t h e refu n d o f $ 4 ,6 6 4 , t h e am o un to f t h e refu n d ab le fu el t ax cred i tth atp et i t i o n er h adcl ai m edi n h i s 2 0 1 1
am en d edretu rn . Res p o n d en ti s su eda n o t i ce o f d efi ci en cy t o p et i t i o n er fo r h i s t ax ab l e y ear 2 0 1 1 d i s al l o wi n g the $ 4 ,6 6 4 2 refu n d ab l e fu el t ax cred i th e h adcl ai m edi n h i s 2 0 1 1
am en d edretu rn . OPINION Res p o n d en td et erm i n edi n th e n o ti ce o f d efi ci en cy thatp et i t i o n er i s n o t
en t i t l edt o th e refu n d ab l e fu el t ax cred i t h e cl ai m edfo r h is t ax ab l e y ear 2 0 11 . Th e

2 On b ri ef, p et i ti o n er co n ced ed$ 3 ,8 6 1 o f th e $ 4,6 6 4 o f “ Refu nd ab le Cred i t s fro m Fo rm s 4 1 3 6 ” t h ath e cl ai m edi n h i s 2 0 1 1 am en d edretu rn an d t h atwere s h o wn i n h i s 2 00 5 Fo rm

4 1 3 6 , 2 0 0 6 Fo rm

4 1 3 6 , 2 0 0 7 Fo rm

4 1 36 , an d 2 0 0 8 Fo rm 4 1 3 6 , wh i ch h e i n cl u d edwi t h th e 2 01 1 am en d edretu rn .- 5
-

[* 5 ] Co u rtm

u s td eci d e wh eth er p et i t i o n er i s en t i t l edt o th e refu n d ab l e fu el t ax cred i t . Pet i t io n er b ears th e b urd en o f es t ab li s hi n g t h atth e d et erm i nat i o n i n th e
n o t i ce o f d efi ci en cy

i s erro n eo us . See Ru le 1 4 2 (a); W el ch v . Hel v eri ng , 2 9 0 U.S. 1 1 1 , 1 1 5 (1 9 3 3). Sect io n 3 4 (a)(3 ) p ro v i d es a cred i t eq u al t o th e am o u n t p ay ab l e t o a t ax p ay er
u n d er s ect i o n 6 4 2 7 (d et erm i n edwi t h o u t reg ardt o s ect io n 6 42 7 (k )). Sect i on 6 4 2 7 (a) p ro v i d es i n p ert i n en tp artth atth e am o u n t p ay ab l e t o a t ax p ay er i s equ al t o
an y t ax i m p o s edu n d er s ect io n 4 0 4 1 (a)(2 ) o n , i n ter al i a, t h e s al e o f p ro pan e t o a t ax p ay er i f t h e t ax p ay er u s edth atp ro p an e fo r a n on t ax ab l e p u rp os e du ri n g th e t ax ab l e y ear fo r wh i ch t h at t ax p ay er i s cl ai m i n g t h e cred i t
. See s ec. 6 4 2 7 (a), (k )(3 ); s ecs . 4 8 .6 4 2 7 -1 (a) t h ro u g h (c), 4 8 .6 4 2 7 -3 (a), 4 8.6 4 2 7 -5 (a) an d(b ), M an u fact u rers & Ret ai l ers Ex ci s e Tax Reg s . As p ert i n en th ere, s ect i o n 4 0 4 1 (a)(2 ) i m p o s es a t ax o n th e s al e o f p ro p an e i n cert ai n ci rcu m s t an ces s p eci fi edi n th ats ect i o n . Sect i o n 4 0 4 1 (g ) p ro v i d es cert ai n
ex em p t i o n s t o t h e t ax i m

p o s edb y s ect i o n 4 04 1 (a)(2 ). Sect io n 4 04 1 (g )(4 ) p ro v i d es i n p ert in en tp artthatn o t ax i s t o b e i m p o s edo n th e s al e o f p ro p an e i f (1 ) t h e- 6
-

[* 6 ] p ro p an e i s s o l dt o a n o npro fi tedu cat i o n al o rg an izat i o n 3 o r (2 ) a n o np ro fi t edu cat i o n al o rg an izat i o n u s es th e p ro p an e as a fu el
. Al t h ou g h n otal to g et h er cl ear, i t ap p ears thatp et i t i o n er i s at t em p t i n g t o u s e h i s 2 0 1 1 am en d edretu rn t o cl ai m a t ax y ear 2 0 0 9 refu n d ab l e fu el t ax cred i to f $ 9 8 3 . Th atwas th e am o u n t o f th e refu n d ab l e fu el t ax cred i tth ath e cl ai m edi n h i s 2 0 0 9 Fo rm

4 1 36 an dth ath e i n cl u dedwi t h o th er am o u n t s o f refu n d ab l e fu el t ax cred i t s wh i ch h e cl ai m edi n h i s 2 0 11 am en dedretu rn . Th e Co u rth as n o ju ri s d i ct i o n o v er p et i t i o n er’ s t ax ab l e y ear 2 0 0 9 . Th e n o t i ce t h atres p o n d en ti s s u ed t o p et i ti o n er up o n wh i ch th i s cas e i s b as edrel at es s o l el y t o p et i t i o n er’ s t ax ab l e y ear 2 0 1 1
. In th e ev en tth atth e Co u rth as m i s co n s tru edp et i t i o n er’ s p o s i t i o n an dh e i s
n o tcl ai m i n g a refu nd ab l e fu el t ax cred i tfo r h is t ax ab l e y ear 2 0 0 9 , b u ti n s t eadh e

3 SEC. 4 0 41 (g ). Oth er Ex em p t i o ns .-- * * *

* * * * * * * Fo r p u rp o s es o f p arag rap h (4 ), t h e t erm “ n o np ro fi teducat i o n al o rg an i zat i o n ” m ean s an edu cat i o n al o rg an i zat i on d es cri b edi n s ec. 1 7 0 (b )(1 )(A)(i i ) wh i ch i s ex em p tfro m i n co m e t ax u nd er s ec. 5 0 1 (a). Th e t erm al s o i n cl u des a s ch o o l o p erat edas an act i v i t y o f an o rg an i zat i on d es cri b edi n s ec. 5 0 1 (c)(3 ) wh i ch i s ex em p tfro m i n co m e t ax u n d er s ec. 5 0 1 (a), i f s u ch s ch o o l n o rm al l y m ai nt ai ns a reg u l ar facu l ty an dcu rri cu l um

an dn o rm al l y

h as a reg u larl y

en ro l l edb o d y

o f p up i l s o r s tu den t s i n at t en d an ce at the p l ace wh ere i t s educat i on al act i v i t i es are reg u l arl y

carri edo n .- 7
-

[* 7 ] i s cl ai m i n g a refu n d ab le fu el t ax cred i tfo r h i s t ax ab le y ear 2 0 1 1 , th e y ear at i s su e, t h e Co u rtco n s i d ers wh et h er h e i s en t i t l edt o s uch a cred i tfo r h i s t ax ab l e y ear 2 0 1 1 . Ins up p o rto f h i s en t i t l em en tt o a refu n d ab l e t ax cred i t , p et i t i o n er rel i es
o n two b an ks t at em en t s fro m h i s p ers o n al b an kacco u n tth at s ho w th ato n Decem b er 1 4 , 2 0 09 , J an u ary

4 , 2 0 10 , an d Feb ru ary

1 , 2 0 1 0 , h e p u rch as edcert ai n
u n i d en t i fi edg o o d s an d/ o r cert ai n u n i d en t i fi eds erv i ces fro m Tu l s a Po wer Serv i ce. Th e Co u rti s s at i s fi edfro m th e rev i ew o f p et i t i o n er’ s b an ks t at em en ts , an d t h e Co u rth as fo u n d , th atp et it i o n er p u rch as ed cert ai n u n i d en ti fi edg oo d s an d/ o r cert ai n u n i d en t i fi eds erv i ces fro m Tu l s a Po wer Serv i ce fo r t h e am o u n t s an do n th e d at es s h o wn o n th o s e b an ks t at em en t s . Ho wev er, t he Co u rti s n o ts at i s fi edfro m t h o s e b an ks t at em en ts o r fro m an y o t h er rel i ab l e ev i d en ce i n the reco rdth at p et i t i o n er m ad e p urch as es o f p ro p an e o n Decem ber 1 4, 2 0 09 , J an u ary

4 , 2 0 1 0 , an d Feb ru ary 1 , 2 0 1 0 , fro m

th atco m p an y . No r i s th e Co u rts at i s fi edfro m p et i ti o n er’ s b an k s tat em en t s o r fro m

an y o t h er rel iab l e ev i d en ce i n th e reco rdth atp et i t i o n er
m ad e an y o t h er p u rch as es o f p ro p an e t h atwo u l d en t i t l e h i m t o th e refu n d ab l e fu el t ax cred i to f $ 9 83 t h at h e i s cl ai m i n g. M o reo v er, as s u m i n g arg u en d o thatth e Co u rth adb een s at i s fi edo n t h e
reco rdb efo re u s th at p et i t io n er m ad e p u rch as es o f p ro p an e o n Decem ber 1 4 , 2 0 09 , J an u ary 4 , 2 0 1 0 , an d Feb ru ary

1 , 2 0 1 0 , o n th atreco rd , th e Co u rtwo ul dfi n dth at- 8
-

[* 8 ] p et i t i o n er h as fai l edt o carryh i s b u rd en o f es t ab l i s h in g th atUn i ty Ch u rch
u s ed an y s u ch p ro p an e i n i t s edu cat i o nal p ro g ram ’ s s p ace h eat ers o r fo r an y o t h er p u rp os e du ri n g p et i t i o n er’ s t ax ab l e y ear 2 0 1 1 , th e y ear at i s su e. On th e reco rdb efo re u s , th e Co u rtfi n d s th at p et i t io n er h as fai l edt o carryh i s b u rd eno f es t ab l is h in g thath e i s en t i t l edt o a refu n d ab l e fu el t ax cred i tfo r h i s t ax ab l e y ear 2 01 1
. Th e Co u rth as co n s i d ered al l o f t h e co n t en t io n s an d arg u m en t s o f t h e p art i es t h atare n o t d i s cu ss edh erei n an dfi n d s th em t o b e wi t h o utm eri t , i rrel ev an t , an d/ o r
m o ot
. To refl ectthe fo reg o i n g , Deci s i o n wi ll b e en t ered fo r res p o n den t
.