TAX COURT OPINION

Case: Michel Aupont & Donna Aupont
Docket Number: 10461-13
Judge: Goeke
Opinion Type: bench
Filed: 05/19/2014
Pages: 5

UNITED STATES TAX COURT WASHINGTON, DC 20217 MICHEL AUPONT & DONNA AUPONT, Petitioner(s), v. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ) ) Docket No. 10461-13. ) ) ) ) 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 petitioners and to respondent a copy of the pages of the transcript of the trial in the above case before Judge Joseph Robert Goeke at Miami, Florida, on May 1, 2014 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, a decision will be entered for respondent as to the deficiency and a decision will be enetered for petitioners as to the addition to tax pursuant to section 6662(a), I.R.C. (Signed) Joseph Robert Goeke Judge Dated: Washington, D.C. May 19, 2014 SERVED MAY 2 0 2014 Capital Reporting Company 3 1 2 Bench Opinion by Judge Joseph Robert Goeke May 1, 2014 3 Michel Aupont & Donna Aupont v. Commissioner 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Docket No. 10461-13 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. THE ORAL FINDINGS OF FACT AND OPINION SHALL NOT BE RELIED UPON AS PRECEDENT IN ANY OTHER CASE. This case is before the Court based upon our jurisdiction to review deficiency determinations made by respondent which formed the basis for the issuance of a notice of deficiency which is then timely petitioned to this Court by the taxpayer. In the present case, the petitioners received such a notice of deficiency which was issued to them jointly for their income tax liabilities in 2011. Respondent determined a deficiency in income tax in the amount of $7,976 and the addition to tax under section 6662(a). The deficiency determinations made by respondent all relate to claimed American Opportunity Tax Credits which the petitioners reflected on their 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 4 joint Federal income tax return for 2011. Prior to trial, petitioners conceded three of the distinct credits claimed, each in the amount of $4,000. But at trial, petitioner husband testified in support of his claimed credit of $4,000 based upon his assertion that he was a college student in the year in question. Based upon his testimony, and the evidence he produced, we believe he was in fact a college student. However, he admitted at trial that he did not incur any tuition expense himself and rather his tuition was paid by grants. At the time they filed their petition in this case, the petitioners were residents of Florida. The determinations made by the respondent in the notice of deficiency in this case are presumed correct and the burden is on the petitioner to establish that the determinations are incorrect. Rule 142(a), of the Tax Court Rules of Practice and Procedure. The American Opportunity Tax Credit, which is the basis for the dispute in the present case, provides for a tax credit for qualified tuition, fees and course materials paid to a qualified institution of higher learning, section 25A(i). The credit is 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 Capital Reporting Company 5 1 2 3 4 5 6 7 available for the first four years of post-secondary education. The qualified tuition and fees are amounts paid for enrollment and attendance at a qualified educational institution. Educational assistance grants would reduce the allowable tuition and fees subject to the credit. Based upon his testimony, it is clear that 8 Mr. Aupont did not incur any qualified tuition 9 expenses subject to the credit in 2011. And we 10 11 12 believe the petitioners correctly conceded that the other members of the family did not incur such qualified expenses. Obviously, the petitioner's 13 minor children did not and petitioner's wife did not 14 15 16 attend college either. We next turn to whether the addition to tax would be applicable. Generally, given the fact that 17 Petitioned claimed credits which they clearly were 18 19 20 21 22 23 24 25 not entitled to, with the exception of Mr. Aupont and that his claim to credit was based upon his confusion about the fact that he cannot claim credits for amounts that were subject to grants. We would uphold the additions to tax because of bhe generally they're I responsible nature of the claimed credits. However, petitioner husband testified, credibly, that the petitioners claimed these credits based upon the 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 6 representations of their return preparer. And petitioner husband testified that at the time the return was submitted, they were under significant pressures in their personal life and they simply relied in total upon the representations of the return preparer and did not research or independently try to determine the allowance of the amounts claimed on the return. We find this testimony to be credible, and we find their reliance upon the return preparer given their unsophisticated nature and their lack of technical tax knowledge to be reasonable under the specific circumstances of this case and therefore we do not sustain the addition to tax. THIS CONCLUDES THE COURT'S ORAL FINDINGS OF FACT AND OPINION IN THIS CASE. (Whereupon, at 1:05 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 25 866.488.DEPO www.CapitalReportingCompany.com