TAX COURT OPINION

Case: Tracy Lynne Adamczyk
Docket Number: 13923-08S
Judge: Colvin
Opinion Type: bench
Filed: 11/26/2008
Pages: 7

S ~ S. 6-11 UNITED STATES TAX COURT WASHINGTON , DC 2021 7 TRACY LYNNE ADAMCZYK, Petitione r v . ) Docket No . 13923-08 S COMMISSIONER OF INTERNAL REVENUE, Respondent O R D E R Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it i s 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 Judge Joseph H . Gale at Nashville, Tennessee, on October 30, 2008, containing his oral findings of fact and opinion rendered at the conclusion of trial . Decision will be entered for respondent in accordance with the oral findings of fact and opinion . (Signed ) Joseph H . Gale Judg e Dated : Washington, D .C . November 26, 2008 SERVED Nov 28 2008 2 1 Bench Opinion by Judge Joseph H . Gale Oct .30, 2008 2 Tracy Lynne Adamczyk Docket No . 13923-08 S 3 4 THE CLERK : 13923-08 S, Tracy Lynne Adamczyk . 5 THE COURT : The Court has decided to rende r 6 oral findings of fact and opinion in this case and the 7 following represents the Court's oral findings of fact 8 and opinion . The oral findings of fact and opinio n 9 shall not be relied upon as precedent in any other 10 case . 11 This proceeding was heard as a Small Tax 12 Case pursuant to the provisions of Section 7463 of the 13 Internal Revenue Code of 1986, as amended, and Rules 14 170 through 175 of the Tax Court Rules of Practice and 15 Procedure . 16 This bench opinion is made pursuant to the 17 authority granted by Section 7459(b) of the Internal 18 Revenue Code of 1986, as amended, and Rule 152 of the 19 Tax Court Rules of Practice and Procedure . 20 Hereinafter in this bench opinion al l 21 section references refer to the Internal Revenue Code 22 of 1986 in effect for the year in issue . 23 Tracy Lynne Adamczyk appeared on her own 24 behalf . Carolina Krivacka appeared on behalf of 25 respondent . Heritage Reporting Corporation (202) 628-4888 3 1 Respondent determined deficiency i n 2 petitioner ' s federal income tax for taxable year 2006 3 of $4 , 190, as a result of the disallowance of a n 4 earned income credit claimed by petitioner on her 2006 5 federal income tax return . 6 The issue for decision is whether petitioner 7 is ineligible for the credit because she failed t o 8 report interest income of $2,415 for 2006, whic when 9 added to the $800 of interest she reported, woul d 10 exceed the maximum amount of interest income that may 11 be received by a taxpayer claiming the earned income 12 credit . 13 Some of the facts hb stipulated and they are 14 so found . 15 Petitioner resided in Tennessee whe n 16 petition in this case was filed . Petitioner received 17 $329 of interest income from U .S . Bank in 2006 . 18 Petitioner also owned a certificate of deposit at 19 Citizens Bank . Petitioner had purchased th e 20 certificate of deposit using funds from her checking 21 account . The certificate of deposit was titled i n 22 petitioner ' s name, payable on death equally to her two 23 children . 24 In 2006 petitioner received $2,886 o f 25 interest incomedwith respect to the certificate of Heritage Reporting Corporatio n (202) 628-4888 4 1 deposit . On her 2006 return petitioner reported $800 2 of interest income . Petitioner also claimed an earned 3 income credit of $4,190 on the return . 4 Respondent issued a notice of deficiency to 5 petitioner for 2006 in which it was determined tha t 6 petitioner had under reported her interest income by 7 $2,415 in that year . The notice further determined 8 that the inclusion of the unreported interest income 9 rendered petitioner ineligible for the earned incom e 10 credit claimed on the 2006 return, resulting in a 11 deficiency of $4,190 . 12 Petitioner timely filed a petition for re- 13 determination of the deficiency . The deficienc y 14 determined by the Commissioner in the notice o f 15 deficiency is presumed correct and petitioner has the 16 burden of proving error in the notice of deficiency . 17 Welch v . Helvering , 2900 U .S . 111 (1933 ! Rule 142 . 18 Petitioner has not claimed or show n 19 eligibility for a shift in the burden of proof under 20 Section 7491(a) . She has not in any event introduced 21 credible evidence that, standing alone, would be tom, . 22 sufficient basis for a decision in her favor . Se e 23 Higbee v . Commissioner , 116 T .C . 438, 442, ( 2001) . 24 Consequently, the burden of proof does not shift to 25 respondent pursuant to Section 7491(a) . Heritage Reporting Corporation (202) 628-4888 5 1 The deficiency in this case results entirely 2 from the disallowance of the earned income credi t 3 claimed by petitioner . Respondent determined tha t 4 petitioner was ineligible for the credit because she 5 received $3,215 in interest income in 2006 bu t 6 reported only $800 of such income on her return , 7 resulting in unreported interest income of $2,415 . 8 Petitioner has stipulated that she received 9 interest income of $ 329 from U .S . Bank and $2,886 from 10 Citizens Bank in 2006 . Petitioner has furthe r 11 stipulated that the interest received from Citizen s 12 Bank was related to a certificate of deposit purchased 13 by petitioner in 2006 and titled to petitioneayable 14 on death equally to her two children . ((~~ 15 Citizens Bank's records show that a 16 certificate of deposit for $85,000 dated July 10th , 17 2006, was issued to petitioner , ' POD equally to DA and 18 TA,'(full names redacted} 19 Petitioner claims that she intended and 20 believed that the interes ,Sin the certificate o f 21 deposit had been transferred to her children in such a 22 manner that all or most of the interest incom e 23 generated by the certificate in 2006 was her 24 children ' s,~rather than hers . 25 Petitioner introduced a letter from an Heritage Reporting Corporatio n (202) 628-4888 6 1 officer of Citizens Bank indicating that petitioner 2 had divided the certificate of deposit titled to he r 3 in 2006 equally to her children on February lOt'', 2007 . 4 The bank's records reflect that the July 10th, 2006 , 5 certificate of deposit was split equally between 'D' 6 and "I' ', ull names redacte/ with no penalty o n 7 February 15th, 2007 . 8 Petitioner ' s intentions notwithstanding, we 9 find and conclude that she had $ 2,886 of interes t 10 income from Citizens Bank in 2006 and $329 of interes t 11 income from U .S . Bank in that year, for a total o f 12 $3,215 . This amount was includable gross incom e 13 for 2006 . See Section 61(a)(4) . We therefore find 14 that petitioner under reported her interest income on 15 her 2006 return by $2,415 . She was required to report 16 interest income of $3,215 Under Section 32( i /) and 17 (j 6 an individual is ineligible for the earned income 18 credit for 2006 if he or she had an aggregate amount 19 of disqualified income for the taxable year in excess 20 of $2,800 . See Revenue Procedure 2005-70, 2005- C8. 21 2(-)(h) 979 . Disqualified income for this purpos e 22 includes interest income to the extent includable in 23 gross income for the taxable year . Sectio n 24 32(i) (2) (a) . 25 Because petitioner received $3,215 of Heritage Reporting Corporation (202) 628-4888 7 1 interest income in 2006, all of which is includable in 2 gross income , she does not qualify for an earne d 3 income credit for 2006 . Respondent ' s disallowance of 4 the earned income credit claimed by petitione and the 5 resulting deficienc 6 aredtherefore?sustained . 6 On the basis of the foregoing , decision will 7 be entered for respondent . 8 This concludes the Court ' s oral findings of 9 fact and opinion in this case . 10 (Whereupon , at 5 :14 p .m ., the bench opinion 11 in the above - entitled matter was concluded . ) 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Heritage Reporting Corporation (202) 628-4888