T.C. Summary Opinion 2005-30

UNITED STATES TAX COURT

KEISHA SAMPSON, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 2462-04S. Filed March 23, 2005.

Keisha Sampson, pro se.

Kathryn F. Patterson, for respondent.

DEAN, Special Trial Judge: This case was heard pursuant to

the provisions of section 7463 of the Internal Revenue Code as in 

effect at the time the petition was filed. Unless otherwise 

indicated, subsequent section references are to the Internal 

Revenue Code in effect for the year at issue and all Rule 

references are to the Tax Court Rules of Practice and Procedure. 

The decision to be entered is not reviewable by any other court, 

and this opinion should not be cited as authority.
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Respondent determined a deficiency in petitioner’s 2002

Federal income tax of $2,116. The issues for decision are

whether petitioner: (a) Received income from self-employment;

(b) is entitled to the earned income credit; (c) is entitled to

head of household filing status; and (d) is entitled to claim two

dependency exemptions.

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

The stipulation of facts and exhibits received in evidence are 

incorporated herein by reference. At the time the petition was 

filed, petitioner resided in Luling, Texas.

Background

Petitioner timely filed her Federal income tax return for

2002 showing her address as P.O. Box 1176, Luling, Texas. 

Petitioner claimed Derrick McKenzie (Derrick) and Destiny Sampson

(Destiny) as dependents on the return. Petitioner’s only income

was reported on Schedule C, Profit or Loss From Business. 

The Schedule C reported a principal business or profession

of “SECRETARIAL/OFFICE ADMINISTRATIVE SERVICES” at 1604 Old Lake

Road, Smithville, Texas. Petitioner reported gross income on

Schedule C of $15,935, as well as office expense of $410, and

phone expenses of $1,200, resulting in a net profit from business

of $14,325. 
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1The Court takes judicial notice of the approximate

distances between the various towns discussed in the opinion. 

See Fed. R. Evid. 201(b). 

Petitioner also attached to her return a Schedule EIC,

Earned Income Credit, claiming Derrick and Destiny as qualifying

children.

Petitioner signed a public housing dwelling lease for a unit

located at 1717 E. Avenue I in Temple, Texas. The lease required

her to pay $50 per month as rent and was to run from May 28,

2002, to May 27, 2003. In the lease it is agreed that the unit

will be occupied only by petitioner, Glenisha McDonald, Freddick

Andeson, Destiny Sampson, and Derrick McKenzie.

During the 2001-2002 school year, Destiny Sampson attended

Brown Primary School (Brown) in Smithville, Texas. Smithville is

about 110 miles from Temple, Texas.1 Destiny’s report card for

2001-2002 has lines for “Parent's Signature”. All of the

signatures are those of “Glenda Lewis”. Destiny continued to

attend Brown during the 2002-2003 school year. Glenda Lewis’s

signature is the only one on the report card for the 2002-2003

school year. 

A “STUDENT WITHDRAWAL/RECORD TRANSFER FORM” for Derrick

McKenzie indicates that he entered Brown on August 19, 2002, and

withdrew on October 1, 2002. On October 1, 2002, Derrick was

enrolled in the Meridith-Dunbar Magnet School in Temple, Texas. 

At some point during the first semester of the 2002-2003 school
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year, Derrick was enrolled in Hermes Elementary School (Hermes)

in La Grange, Texas, where he remained for the rest of the school

year. His address was listed by Hermes as 128 E. Cedar Street,

La Grange, Texas. La Grange is about 128 miles from Temple.

Discussion

Because petitioner failed to meet the requirements of

section 7491(a)(2), the burden of proof does not shift to

respondent in this case.

Schedule C Income

Respondent determined that petitioner had not earned the

income reported on her Schedule C. Petitioner testified that she

had a babysitting business and was “self-employed for about a

year cutting yards, doing odds and ends, cleaning house, doing

several different things to earn a living.” She added that she

poured concrete and worked for OBM Enterprises for the last 5

years. 

Petitioner provided the Court with two documents titled

“Original Affidavit In Any Fact”. In these documents, Mr. O.B.

Marshall states that petitioner was engaged in the “good 

faith performance of Principal Business or profession of

Secretarial/Office Administration Services during the course 

of operations of O.B. Marshall D/BA OBM Enterprises, Inc. and 

the related party transactions of other Business(es) and

Individual(s)” as an employee and as a self-employed individual
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for 2003. Petitioner, however, failed to provide any documentary

evidence of any of her alleged employment activities and did not

provide a satisfactory explanation for her lack of evidence. 

Mr. Marshall, who appeared as a witness, failed to produce any

tax forms, pay stubs, or invoices to document petitioner’s

employment by him in any capacity. Respondent’s determination

that petitioner did not have self-employment income is sustained.

Earned Income Credit

Petitioner claimed the earned income credit for two

“qualifying” children, Destiny and Derrick. Respondent

determined that petitioner is not entitled to the earned income

credit.

Section 32(a)(1) allows an eligible individual an earned

income credit against the individual’s income tax liability. The

credit is a refundable credit that is treated as a payment of

tax. Secs. 6401(b), 32. The credit is based on “earned income”

which includes wages, salaries, tips, and earnings from selfemployment. Sec. 32(a), (c)(2). The amount of the credit is

determined by multiplying an individual’s earned income by a

percentage. Sec. 32(a)(1). Section 32(a)(2) limits the credit

allowed, and section 32(b) prescribes different percentages and

amounts used to calculate the credit based on whether the

eligible individual has no qualifying children, one qualifying

child, or two or more qualifying children.
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Because petitioner has not shown that she had earned income

for the year, she is not entitled to an earned income credit. 

Because petitioner has not shown that she had any income for the

year, she was not required to file a Federal income tax return

and the Court need not reach the issues of her filing status and

her entitlement to dependency exemptions. See sec.

6012(a)(1)(A).

Respondent’s deficiency determination is in all respects

sustained.

Reviewed and adopted as the report of the Small Tax Case

Division.

To reflect the foregoing,

Decision will be entered

 for respondent.