TAX COURT OPINION

Case: Tanisha Laquel Saunders
Docket Number: 2805-18S
Judge: Carluzzo
Opinion Type: bench
Filed: 02/19/2019
Pages: 6

JRN UNITED STATES TAX COURT WASHINGTON, DC 20217 TANISHA LAQUEL SAUNDERS, Petitioner, v. ) ) ) ) Docket No. 2805-18S COMMISSIONER OF INTERNAL REVENUE, Respondent. ) ) ) ORDER Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it is ORDERED that the Clerk of the Court shall transmit herewith to petitioner and to respondent a copy of the pages of the transcript of the trial in the above case before Chief Special Trial Judge Lewis R. Carluzzo at Los Angeles, California, 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 entered for respondent. (Signed) Lewis R. Carluzzo Special Trial Judge Dated: Washington, D.C. February 19, 2019 SERVED Feb 21 2019 Bench Opinion by Special Trial Judge Lewis R. Carluzzo 3 January 16, 2019 Tanisha Laquel Saunders v. Commissioner of Internal Revenue Docket No. 2805-18S THE COURT: The Court has decided to render oral findings of fact and opinion in this case and the following represents the Court's oral findings of fact and opinion (bench opinion). Unless otherwise noted, section 1 2 3 4 5 6 7 8 9 10 references made in this bench opinion are to the Internal 11 Revenue Code of 1986, as amended, in effect for the 12 relevant period, and Rule references are to the Tax Court 13 Rules of Practice and Procedure. This bench opinion is 14 made pursuant to the authority granted by section 7459(b) 15 16 and Rule 152. This case for the redetermination of a 17 deficiency is a small tax case subject to the provisions 18 of section 7463 and Rules 170 through 174. Except as 19 provided in Rule 152(c), this bench opinion shall not be 20 cited as authority, and pursuant to section 7463(b) the 21 decision entered in this case shall not be treated as 22 23 precedent for any other case. Tanisha Laquel Saunders, appeared on her own 24 behalf. Ping Chang appeared on behalf of respondent. 25 In a notice of deficiency dated November 6, 4 2017, respondent determined a deficiency in petitioner's 2015 Federal income tax. The deficiency results entirely from respondent's disallowance of the refundable and non- refundable portions of a section 25A education credit claimed on petitioner's 2015 Federal income tax return. The issue for decision is whether petitioner is entitled to that credit. The relevant facts in this matter, many of which have been stipulated or are not in dispute, are easily summarized. In addition to being employed in various ways 1 2 3 4 5 6 7 8 9 10 11 12 during 2015 petitioner was also what would be considered a 13 "full-time" student at Los Angeles Pierce College, an 14 eligible educational institution within the meaning of 15 16 section 25A(f) (2). Her tuition for that year totaled $1,656. It cannot be determined with any degree of 17 Precision exactly how much petitioner incurred for books, 18 materials, supplies, fees and other expenses related to 19 her education during 2015, but the total amount of 20 petitioner's "qualified tuition and related expenses" 21 within the meaning of section 25A(f)(1) was less than the 22 23 24 $5,752.50 Pell Grant that petitioner received that year. She used much of the Pell Grant to pay her tuition and related educational expenses; she used what was left over 25 to pay personal and living expenses. As respondent's pretrial memorandum notes, 5 section 25A allows education credits for qualified tuition and related expenses. We note that those credits are subject to a variety of conditions and limitations, only one of which we need to concern ourselves with here. Unless a taxpayer elects otherwise, the proceeds of a Pell Grant used to pay qualified expenses and related educational expenses are excludable from the taxpayer's income. The excludable portion reduces the amount of 1 2 3 4 5 6 7 8 9 10 qualified tuition and educational expenses taken into 11 12 13 14 account in the computation of the educational credit. See sec. 25A(g)(2)(c); sec. 1.25A-5(c) Income Tax aegs. Nothing in the record suggests that pursuant to an election made by petitioner any portion of the Pell 15 Grant is included in the income reported on her 2015 16 Federal income tax return; nor are we concerned about the 17 lack of evidence on the point. In this case, the portion 18 of the Pell Grant used to pay petitioner's qualifying 19 tuition and related expenses, although not determinable 20 with mathematical prec1slon, has obviously been excluded 21 22 from her 2015 income. The amount excluded is sufficient to reduce to zero both the amounts of her qualifying 23 tuition and related expenses and any otherwise allowable 24 derivative section 25A credit. 25 At trial petitioner, more or less, acknowledged Ø73 4062250|opent s@eicrlbersneilivwwsscribers e : 6 1 2 3 4 5 6 7 8 9 the impact of the Pell Grant on her entitlement to a section 25A credit for 2015. She offers no technical argument in opposition to-respondent's disallowance of the credit. Instead, she points to her severe financial situation during the relevant time and requests that the hardships she was enduring might operate to allow a result other than what the direct application of the relevant statutory scheme demands. We sympathize with petitioner's financial plight but point out that the statute in some 10 ways does take into account the financial situation of a 11 12 13 taxpayer otherwise eligible for the credit by the income limitations it sets. See sec. 25A(d). But once a taxpayer's income falls with the specified range, as 14 petitioner's did during the year in issue, the statute 15 allows for no further provisions that allow a taxpayer's 16 financial situation to be taken into account, and the 17 Court is bound to apply the.law .as enacted by the 18 Congress. 19 We congratulate and commend petitioner on 20 pursuing her formal education, but her reward for doing so 21 will have to be other than a reduction in her 2015 Federal 22 23 24 25 income tax. It follows that respondent's disallowance of the section 25A education credit is sustained. To reflect the foregoing, decision will be (973 466.2250|operat cribers a®escribirrs.netJwww.escribers.net entered for respondent. OPinion in this case. 7 This concludes the Court's bench (Whereupon, at 1:47 p.m., the above-entitled matter was concluded.) 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 cribers