TAX COURT OPINION

Case: Connie Norris
Docket Number: 19584-14
Judge: Goeke
Opinion Type: bench
Filed: 04/23/2015
Pages: 5

UNITED STATES TAX COURT WASHINGTON, DC 20217 CONNIE NORRIS, ) Petitioner(s), v. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) Docket No. 19584-14. ) ) ) ) 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 Judge Joseph Robert Goeke at Memphis, Tennessee, on April 14, 2015, containing his oral findings of fact and opinion rendered at the trial session at which this case was heard. In accordance with the oral findings of fact and opinion, a decision will be entered under Rule 155, Tax Court Rules of Practice and Procedure. (Signed) Joseph Robert Goeke Judge Dated: Washington, D.C. April 23, 2015 SERVED APR 2 4 2015 Capital Reporting Company 3 1 Bench Opinion by Judge Joseph Robert Goeke 2 April 14, 2015 3 4 5 6 7 8 Connie Norris Docket No. 19584-14 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. The Oral Findings of Fact and 9 Opinion shall not be relied upon as precedent in any 10 11 12 13 14 15 16 17 18 19 20 21 22 23 other case. This opinion is rendered pursuant to Tax Court Rule 152 and rule references hereinafter are to the Tax Court Rules of Practice and Procedure. Section references hereinafter are to the Internal Revenue Code in effect for the year 2012. This case is before the Court based upon our jurisdiction to review deficiencies determined by Respondent, which are timely petitioned to this Court after Respondent has issued a notice of deficiency. That is precisely the circumstance of the present case, and at the time the petition was filed in this case the Petitioner was a resident of Tennessee. The notice of deficiency determined that 24 Petitioner had received other income in the amount of 25 $4,000 in 2012 and that adjustment has been conceded 866.488.DEPO www.Capita1ReportingCompany.com Capital Reporting Company 4 1 2 by the Respondent at trial. The notice of deficiency also corrected wages reported by the Petitioner. The 3 Petitioner reported wages on her return for 2012 in 4 5 the amount of $34,050. Respondent determined that based upon the W-2 form, which was issued to the 6 Petitioner by her employer in 2012, she received 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 $37,223. There are two other adjustments in the notice of deficiency. One was the disallowance of interest on student loans in the amount of $1500, and the disallowance of a mortgage insurance deduction in the amount of $1207. The parties have settled the other remaining issue in the notice of deficiency involving income from Harrah's Casino based upon the allowance of a gambling loss to the Petitioner in the same amount as the income item received. These settled issues and the determinations of the Court as outlined hereinafter will require a Rule 155 computation. The principal issue in the case involves the difference between the amount reported on the W-2 issued by Petitioner's employer, and the amount she claims. This difference is the result of a garnishment on her wages, which was honored by her 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 5 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 employer. Petitioner submitted information into the record at trial and testified credibly about the circumstances of this garnishment. Her employer received a garnishment from USA Funds, which was an order requiring the withholding of wages in the amount of $2703.59. Petitioner disputes unconditionally that she owed this amount and has sought explanation from USA Funds, and as of the time of trial she testified credibly she was unable to receive any satisfaction. She did submit information showing that she had a zero balance on her principal obligation on her student loans, and that would support her position that she did not owe any additional amount to USA Funds. The disallowed student loan interest is related to this garnishment. Petitioner said after she was unable to receive any satisfaction about the garnishment, she determined that at least a portion of the amount garnished should be treated as interest. We note that while some of the paperwork shows a garnishment of $2703, the actual amount taken from Petitioner's wages is $3,173. Based upon Petitioner's testimony and the evidence in the record showing the zero balance on 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 6 her student loans, the Court determined that the factual record supported an interest deduction in the full amount of the garnishment, because there was no principal payment to which the garnishment could have applied to. Thus, the Court allowed Petitioner to amend her pleadings and seek an additional deduction for student loan interest in the total amount of the garnishment. The Court also determined based upon the record of trial that the mortgage insurance deduction of $1207 was not in accord with any statutory provision and is not an allowable deduction. Based upon these determinations and the parties' stipulated resolution of the other issues in the case, a Rule 155 computation will be necessary, as stated previously. THIS CONCLUDES THE COURT'S ORAL FINDINGS OF FACT AND OPINION IN THIS CASE. (Whereupon, at 10:06 a.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 25 866.488.DEPO www.CapitalReportingCompany.com