TAX COURT OPINION

Case: Robert Lloyd Jackson
Docket Number: 546-17S
Judge: Thornton
Opinion Type: bench
Filed: 12/06/2017
Pages: 7

UNITED STATES TAX COURT WASHINGTON, DC 20217 SEC ROBERT LLOYD JACKSON, Petitioner, v. ) ) ) ) ) Docket No. 546-17S. 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 Judge Michael B. Thornton 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 pursuant to Rule 155. (Signed) Michael B. Thornton Judge Dated: Washington, D.C. December 6, 2017 SERVED Dec 07 2017 c 3 1 2 3 4 5 6 7 8 9 10 11 12 Bench Opinion by Judge Michael B. Thornton - October 24, 2017 Robert Lloyd Jackson v. Commissioner of Internal Revenue Docket No. 546-17S 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, except as otherwise provided by Rule 152(c) of the Tax Court Rules of Practice and Procedure. The oral findings of fact and opinion shall not be relied upon as precedent in any other case. This proceeding for the redetermination of a 13 deficiency is a Small Tax Case conducted pursuant to the 14 provisions of section 7463 of the Internal Revenue Code of 15 1986, as amended, and Rules 170 through 175 of the Tax 16 Court Rules of Practice and Procedure. Pursuant to 17 18 19 section 7463(b), the decision to be entered in this case is not reviewable by any other court. This bench opinion is made pursuant to the 20 authority granted by section 7459(b) and Rule 152. And 21 hereinafter in this bench opinion, section references are 22 23 to the Internal Revenue Code in effect for the taxable year at issue. All rule references are to the Tax Court 24 Rules of Practice and Procedure. All monetary amounts are 25 rounded to the nearest dollar. EM (973)4062250|operations@escribetsmet|wwwtescribers.net This case was tried on October 23rd, 2017 in Los 4 Angles, California. Petitioner appeared pro se. Justine S. Coleman appeared on behalf of respondent. By notice of deficiency, respondent determined a deficiency in petitioner's 2014 federal income tax of $2,439. In the notice of deficiency, respondent disallowed the education credit of $1,463 and the American Opportunity credit of $976. While living in California, petitioner timely 1 2 3 4 5 6 7 8 9 10 filed a petition contesting respondent's determination. 11 12 The issues for decision are whether petitioner is entitled to the claimed (1) education credit of $1,463 and (2) 13 American Opportunity credit of $976. 14 15 FINDINGS OF FACT Petitioner attended Los Angeles Harbor College 16 part time during the fall 2014 semester, majoring in 17 18 business administration. An unofficial transcript shows that he took two courses: Introductory Accounting I and 19 Golf Skills. The Introductory Accounting I course was 20 21 22 23 five units, whereas the Golf Skills course was one unit. Petitioner did not provide a receipt or other documentation to substantiate his payment of tuition. The enrollment fee for Los Angeles Harbor College, as of the 24 date of trial, was $46 per unit. The Court takes judicial 25 notice that the Los Angeles Harbor College Catalog 2012 cnbers (973)406-2250|operations@escribers.net|wwwkscribers.net 5 1 2 3 4 5 6 7 8 9 10 11 through 2014 also provides that during that period the enrollment fee was $46 per unit. The catalog further provides that Golf Skills was only applicable to an Associate in Arts degree in kinesiology. On his 2014 return, petitioner claimed an education credit of $1,463 and the American Opportunity credit of $976. OPINION The Commissioner's determinations in a notice of deficiency are generally presumed correct, and the taxpayer bears the burden of proving those determinations erroneous by a preponderance of the evidence; Rule 142(a); 12 Welch v. Helvering, 290 U.S. 111, 115 (1933). 13 14 Deductions and credits are a matter of legislative grace, and the taxpayer bears the burden of 15 proving entitlement to any claimed deduction or credit; 16 Rule 142(a); INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 17 18 19 20 21 22 84 (1992); New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934). Section 25A authorizes education tax credits, including the Lifetime Learning Credit (prescribed in subsection (c)) and the American Opportunity credit (prescribed in subsection (i)), a modified version of the 23 Hope Scholarship credit prescribed in subsection (b). The 24 25 tax credits are available to taxpayers who pay qualified tuition and related expenses for education for an eligible (973)406-2250|operations@escribers.net|www.escribers et 6 1 2 3 4 5 6 7 8 9 student; section 25A(c)(1), (i)(1) (A). To be eligible for the credit, a student must be enrolled in at least one academic period and must be taking at least one-half of a normal full-time workload for a student in that course of study; section 25A(b)(2) (B), (3) (B). The American Opportunity credit is equal to the sum of 100 percent of so much of the qualified tuition and related expenses as do not exceed $2,000, plus 25 percent of such expenses so paid as exceed $2,000 but do not exceed $4,000; section 10 25A(i)(1). Up to 40 percent of the credit may be 11 12 13 14 refundable; section 25A(i)(5); see Lara v. Commissioner, T.C. Memo. 2016-96. Generally, "qualified tuition and related expenses means tuition and fees required for enrollment or 15 attendance." Section 25A(f)(1) (A). The term "qualified 16 tuition and related expenses" "does not include expenses 17 with respect to any course or other education involving 18 19 sports, games, or hobbies, unless such course or other education is part of the individual's degree program." 20 Section 25A(f) (1) (B). 21 22 23 24 25 A taxpayer, ordinarily, must maintain adequate records to substantiate claimed deductions or credits; section 6001; Hradesky v. Commissioner, 65 T.C. 87, 89-90 (1975), aff'd per curiam, 540 F.2d 821 (5th Cir. 1976); section 1.6001-1(a), (e), Income Tax Regs. If a taxpayer (973)406-2250loperat nseescribersnet|www.escribers.net 7 establishes that a deductible expense has been paid or incurred but is unable to substantiate the precise amount, we generally may estimate the amount of the deductible expense, bearing heavily against the taxpayer responsible for the inexactitude. Cohan v. Commissioner, 39 F.2d 540, 543-544 (2d Cir. 1930). We cannot estimate deductible expenses, however, unless the taxpayer presents evidence providing a sufficient basis for making an estimate. Vanicek v. Commissioner, 85 T.C. 731, 742-743 (1985). 1 2 3 4 5 6 7 8 9 10 Without such basis, any allowance would amount to unguided 11 12 13 largesse. Williams v. United States, 245 F.2d 559, 560 (5th Cir. 1957). Respondent agrees that petitioner was enrolled 14 in Los Angeles Harbor College for the fall 2014 semester. 15 Respondent does not dispute that petitioner carried at 16 least one-half the normal full-time workload for a student 17 enrolled at Los Angeles Harbor College. See section 18 25A(b) (2) (B), (3) (B). Petitioner provided a transcript 19 evidencing his course work for the fall 2014 semester 20 totaling six semester units. However, petitioner has not 21 22 substantiated that "Golf Skills" was part of his degree program in business administration or that he was pursuing 23 an Associate in Arts degree in kinesiology. Thus 24 petitioner is not entitled to any credit with respect to 25 the Golf Skills course; see section 25A(f) (1) (B). We } M- cribers (973)406-2250|operations@escribersnet|www.escribers.net conclude that petitioner expended $230 for qualified tuition in 2014 ($46 per unit for a five-unit Accounting course). This tuition was clearly required by the school as a condition of enrollment, and this is a qualifying 8 expense for the education credit; see section 1.25A-2(d)(2)(i), Income Tax Regs. On the basis of the record we conclude the petitioner is entitled to an education credit with respect to $230 of tuition paid in 2014. To give effect to the foregoing, decision will be entered pursuant to Rule 155. This concludes the Court's findings of fact and 1 2 3 4 5 6 7 8 9 10 11 12 13 opinion in this case. 14 15 16 17 18 19 20 21 22 23 24 25 (Whereupon, at 12:50 p.m., the above-entitled matter was concluded.) (973)406-2250|operations@escribers,net|www.escribers.net