TAX COURT OPINION

Case: Caleb Bradley
Docket Number: 2056-19
Judge: Nega
Opinion Type: bench
Filed: 10/24/2019
Pages: 12

SEC UNITED STATES TAX COURT WASHINGTON, DC 20217 CALEB BRADLEY, Petitioner, v. ) ) ) ) Docket No. 2056-19. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ORDER Pursuant to Rule 152(b) of the Tax Court Rules of Practice and Procedure, it is ORDERED that the Clerk of the Court shall transmit to petitioner and to respondent a copy of the pages of the transcript of the proceedings in the above case before Judge Joseph W. Nega at Albuquerque, New Mexico, on September 24, 2019, containing his oral findings of fact and opinion rendered at the trial session at which the case was heard. In accordance with the oral findings of fact and opinion, decision will be for respondent. (Signed) Joseph W. Nega Judge Dated: Washington, D.C. October 24, 2019 SERVED Oct 25 2019 RECEIVED 10/09/19 . IN THE UNITED STATES TAX COURT SEC In the Matter of: CALEB BRADLEY, v. Petitioner, ) ) ) ) Docket No. 2056-19 ) ) ) ) COMMISSIONER. OF INTERNAL REVENUE, Respondent. ) ) Pages: 1 through 9 Place: Albuquerque, New Mexico Date: September 24, 2019 cribers 1973) 406-2250l operationseescribetsnet i v,ww.escdbërsmet . IN THE UNITED STATES TAX COURT 1 In the Matter of: ) CALEB BRADLEY, ) Docket No. 2056-19 Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. ) ) ) ) ) Bernalillo County Metropolitan Court 401 Lomas Boulevard, N.W. Albuquerque, New Mexico 87102 September 24, 2019 The above-entitled matter came on for bench opinion, pursuant to notice at 2:03 p.m. BEFORE: HONORABLE JOSEPH W. NEGA Judge APPEARANCES: For the Petitioner: No Appearance For the Respondent: No Appearance 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 aiben 73H06-2250joperationseescribertnet www.escnbersaet P R O C E E D I N G S 2 (2:03 p.m.) THE CLERK: Recalling from the calendar docket number 2056-19, Caleb Bradley. (Whereupon, a bench opinion was rendered.) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 ribers .1973}406:2250 operationspercribersaet www.escibersmet Bench Opinion by Judge Joseph w. Nega September 24, 2019 Caleb Bradley v. Commissioner Docket No. 2056-19 3 THE COURT: The Court has decided to render oral Findings of Fact and Opinion in this case. The following represents the Court's oral Findings of Fact and Opinion. This bench opinion is made pursuant to section 7459(b) and Rule 152, and shall not be relied on as precedent in any 1 2 3 4 5 6 7 8 9 10 other case. Unless otherwise indicated, all section 11 references are to the Internal Revenue Code (Code) in 12 effect for the year at issue, and all Rule references are 13 to the Tax Court Rules of Practice and Procedure. All 14 monetary amounts are rounded to the nearest dollar. 15 16 By a notice of deficiency dated October 15, 2018, respondent determined a deficiency in petitioner's 17 Federal income taxes for tax year 2016. The sole issue 18 for decision is whether petitioner is entitled to claim 19 education credits under section 25A in the amount of 20 21 $2,500 for 2016. This case was tried on September 23, 2019, in 22 Albuquerque, New Mexico. Caleb Bradley appeared pro se. 23 Lindsey J. Nicolette appeared on behalf of respondent. 24 25 FINDINGS OF FACT Some of the facts have been stipulated, and the cribers (973)4®2250loperatiom©esoteruet}wwwmabersaet stipulated facts are incorporated in our findings by this 4 reference. At the time the petition was filed, petitioner resided in New Mexico. Petitioner timely filed a Form 1040, U.S. Individual Income Tax Return, for 2016. On that return, he reported wages totaling $28,152 from his employment with Thomas & Betts Corporation. Petitioner attached to the return a Form 8863, Education Credits (American 1 2 3 4 5 6 7 8 9 Opportunity and Lifetime Learning Credits), and claimed an 10 American opportunity Tax Credit in the amount of $2,500, 11 of which he treated $1,000 as a refundable credit and 12 13 14 15 16 17 18 $1,500 as a nonrefundable credit. According to the form, the credit is attributable to petitioner's education expenses at University of Phoenix. Following an examination of petitioner's tax return for 2016, respondent disallowed petitioner's claimed education credit due to a lack of substantiation. On January 28, 2019, petitioner timely filed a 19 petition with this Court. After filing the petition, 20 petitioner provided to respondent a copy of Form 1098-T, 21 Tuition Statement, issued to him by University of Phoenix 22 23 24 25 for tax year 2013. This form had an entry of $5,280 in box 1, captioned "Payments received for qualified tuition and related expenses." It showed no entry in box 2, captioned "Amounts billed for qualified tuition and cribers $73)406-2250|operationsgescribersnet)www.escribersmet 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 related expenses." It showed an entry of $1,485 in box 4, captioned "Adjustments made for a prior year." It showed no entry in box 5, captioned "Scholarships or grants." At trial, petitioner testified that he was not enrolled in school during 2016. Petitioner testified that he was enrolled in school during years 2011, 2012, and 2013, but did not claim education credits in those years because he did not timely receive Forms 1098-T or otherwise know that he could have claimed such credits. The education credit claimed on petitioner's return for 2016 was based on expenses incurred while petitioner was in school during years 2011, 2012, and 2013. OPINION I. Burden of Proof Ce ssì en The recpondes ermination in a notice of 16 deficiency are generally presumed correct, and the 17 18 taxpayer bears the burden of proving them erroneous. Rule 142(a)(1); Welch v. Helvering, 290 U.S. 111, 115 (1933). 19 Like deductions, tax credits are a matter of legislative 20 21 22 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 23 Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934). 24 Pursuant to section 7491(a), the burden of proof as to 25 factual matters shifts to the Commissioner under certain J cribes (973)406-2250loperationsees:rlbermet|wwwascribermet circumstances. Petitioner did not allege or otherwise 6 show that section 7491(a) applies. See sec. 7491(a) (2) (A) and CB). Therefore, petitioner bears the burden of proof. See Rule 142(a). II. Education Credits The Code allows for a variety of education credits, including the American Opportunity Credit, a 1 2 3 4 5 6 7 8 modified version of the Hope Scholarship Credit that was 9 in effect for tax year 2015. See sec. 25A(i). The 10 American Opportunity Credit provides for a credit against 11 12 13 14 15 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. Sec. 25A(i)(1). Up to 40% of the credit may be 16 refundable. Sec. 25A(i) (5). The term "qualified tuition 17 and related expenses" includes tuition and fees at an 18 eligible institution that the taxpayer, the taxpayer's 19 spouse, or the taxpayer's dependent attends during the 20 21 22 taxable year. Sec. 25A(f)(1), (i)(3). To be eligible for the credit a student must be enrolled in at least one academic period that begins during the taxable year and 23 must be taking at least one-half of a normal full-time 24 workload for a student in that course of study. Sec. 25 25A(b) (2) (B), (3) CB). ||kciibers 1973)406-2250|operationseescribertnetlwwwesaibesmet 1 2 3 4 5 6 7 8 A taxpayer ordinarily must maintain adequate 7 records to substantiate the amounts of his or her income and entitlement to any deductions or credits claimed. Sec. 6001; sec. 1.6001-1(a), Income Tax Regs. When a taxpayer establishes that he or she paid or incurred a deductible expense but does not establish the amount of the expense, we may estimate the amount allowable in some s93-s circumstances. Cohan v. Commissioner, 39 F.2d 540 (2d A 9 Cir. 1930). There must be sufficient evidence in the 10 11 12 13 14 15 16 record, however, to permit us to conclude that the taxpayer paid or incurred a deductible expense in at least the amount allowed. See Williams v. United States, 245 F.2d 559, 560 (5th Cir. 1957); Vanicek v. Commissioner, 85 T.C. 731, 743 (1985). In estimating the amount allowable, we bear heavily upon the taxpayer who failed to maintain required records and to substantiate deductions as the 17 Code requires. See Cohan v. Commissioner, 39 F.2d at 544; 18 Keenan v. Commissioner, T.C. Memo. 2006-45, aff'd, 233 F. 19 App'x 719 (9th Cir. 2007). 20 21 Petitioner has not provided supporting documentation showing that he was enrolled in school 22 during 2016 or that he paid any qualifying education 23 24 expenses during 2016. Petitioner provided documentation showing that he was enrolled in school and paid tuition 25 during 2013, but this has no bearing on the availability cribers 1973)406.2250|operations@exrtbenat}wwwe ribersaet of the education credit claimed for the 2016 tax year. Petitioner has not met his burden of proving entitlement to education credits for 2016. Accordingly, we sustain respondent's disallowance of the education credit claimed 8 by petitioner. III. Conclusion Accordingly, a decision will be entered for respondent. This concludes the Court's oral findings of fact and opinion in this case. In reaching our holding 1 2 3 4 5 6 7 8 9 10 herein, we have considered all arguments made, and, to the 11 extent not mentioned above, we conclude they are moot, 12 irrelevant, or without merit. 13 14 15 16 17 18 19 20 21 22 23 25 That concludes the bench opinion. (Whereupon, at 2:12 p.m., the above-entitled matter was concluded.) Cribers 73)406-22501operatÉmseescribersnetIwwwascribers et CERTIFICATE OF TRANSCRIBER AND PROOFREADER 9 CASE NAME: Caleb Bradley v. Commissioner DOCKET NO.: 2056-19 We, the undersigned, do hereby certify that the foregoing pages, numbers 1 through 9 inclusive, are the true, accurate and complete transcript prepared from the verbal recording made by electronic recording by Jaqueline Denlinger on September 24, 2019 before the United States Tax Court at its session in Albuquerque, NM, in accordance 1 2 3 4 5 6 7 8 9 10 with the applicable provisions of the current verbatim 11 12 reporting contract of the Court and have verified the accuracy of the transcript by comparing the typewritten 13 transcript against the verbal recording. 14 15 16 17 18 19 20 22 23 24 25 Meribeth Ashley, CET-507 Transcriber . Traci Fine, CDLT-169 Proofreader cribers 10/1/19 Date -- 10/7/19 Date RECEIVED 10/09/19 IN THE UNITED STATES TAX COURT SD In the Matter of: ADRIANA B. MARTINEZ-GUZMAN, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, ) ) ) ) Docket No. 19254-18S ) ) ) ) ) ) Respondent. ) Pages: 1 through 11 Place: Albuquerque, New Mexico Date: September 24, 2019 (973}406-2250|operatiompescribersnet|www saibersAet