The opinion
T.C. Summary Opinion 2005-30
UNITED STATES TAX COURT
KEISHA SAMPSON, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 2462-04S. Filed March 23, 2005.
Keisha Sampson, pro se.
Kathryn F. Patterson, for respondent.
DEAN, Special Trial Judge: This case was heard pursuant to
the provisions of section 7463 of the Internal Revenue Code as in
effect at the time the petition was filed. Unless otherwise
indicated, subsequent section references are to the Internal
Revenue Code in effect for the year at issue and all Rule
references are to the Tax Court Rules of Practice and Procedure.
The decision to be entered is not reviewable by any other court,
and this opinion should not be cited as authority.
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Respondent determined a deficiency in petitioner’s 2002
Federal income tax of $2,116. The issues for decision are
whether petitioner: (a) Received income from self-employment;
(b) is entitled to the earned income credit; (c) is entitled to
head of household filing status; and (d) is entitled to claim two
dependency exemptions.
Some of the facts have been stipulated and are so found.
The stipulation of facts and exhibits received in evidence are
incorporated herein by reference. At the time the petition was
filed, petitioner resided in Luling, Texas.
Background
Petitioner timely filed her Federal income tax return for
2002 showing her address as P.O. Box 1176, Luling, Texas.
Petitioner claimed Derrick McKenzie (Derrick) and Destiny Sampson
(Destiny) as dependents on the return. Petitioner’s only income
was reported on Schedule C, Profit or Loss From Business.
The Schedule C reported a principal business or profession
of “SECRETARIAL/OFFICE ADMINISTRATIVE SERVICES” at 1604 Old Lake
Road, Smithville, Texas. Petitioner reported gross income on
Schedule C of $15,935, as well as office expense of $410, and
phone expenses of $1,200, resulting in a net profit from business
of $14,325.
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Petitioner also attached to her return a Schedule EIC,
Earned Income Credit, claiming Derrick and Destiny as qualifying
children.
Petitioner signed a public housing dwelling lease for a unit
located at 1717 E. Avenue I in Temple, Texas. The lease required
her to pay $50 per month as rent and was to run from May 28,
2002, to May 27, 2003. In the lease it is agreed that the unit
will be occupied only by petitioner, Glenisha McDonald, Freddick
Andeson, Destiny Sampson, and Derrick McKenzie.
During the 2001-2002 school year, Destiny Sampson attended
Brown Primary School (Brown) in Smithville, Texas. Smithville is
about 110 miles from Temple, Texas.1 Destiny’s report card for
2001-2002 has lines for “Parent's Signature”. All of the
signatures are those of “Glenda Lewis”. Destiny continued to
attend Brown during the 2002-2003 school year. Glenda Lewis’s
signature is the only one on the report card for the 2002-2003
school year.
A “STUDENT WITHDRAWAL/RECORD TRANSFER FORM” for Derrick
McKenzie indicates that he entered Brown on August 19, 2002, and
withdrew on October 1, 2002. On October 1, 2002, Derrick was
enrolled in the Meridith-Dunbar Magnet School in Temple, Texas.
At some point during the first semester of the 2002-2003 school
1
The Court takes judicial notice of the approximate
distances between the various towns discussed in the opinion.
See Fed. R. Evid. 201(b).
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year, Derrick was enrolled in Hermes Elementary School (Hermes)
in La Grange, Texas, where he remained for the rest of the school
year. His address was listed by Hermes as 128 E. Cedar Street,
La Grange, Texas. La Grange is about 128 miles from Temple.
Discussion
Because petitioner failed to meet the requirements of
section 7491(a)(2), the burden of proof does not shift to
respondent in this case.
Schedule C Income
Respondent determined that petitioner had not earned the
income reported on her Schedule C. Petitioner testified that she
had a babysitting business and was “self-employed for about a
year cutting yards, doing odds and ends, cleaning house, doing
several different things to earn a living.” She added that she
poured concrete and worked for OBM Enterprises for the last 5
years.
Petitioner provided the Court with two documents titled
“Original Affidavit In Any Fact”. In these documents, Mr. O.B.
Marshall states that petitioner was engaged in the “good
faith performance of Principal Business or profession of
Secretarial/Office Administration Services during the course
of operations of O.B. Marshall D/BA OBM Enterprises, Inc. and
the related party transactions of other Business(es) and
Individual(s)” as an employee and as a self-employed individual
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for 2003. Petitioner, however, failed to provide any documentary
evidence of any of her alleged employment activities and did not
provide a satisfactory explanation for her lack of evidence.
Mr. Marshall, who appeared as a witness, failed to produce any
tax forms, pay stubs, or invoices to document petitioner’s
employment by him in any capacity. Respondent’s determination
that petitioner did not have self-employment income is sustained.
Earned Income Credit
Petitioner claimed the earned income credit for two
“qualifying” children, Destiny and Derrick. Respondent
determined that petitioner is not entitled to the earned income
credit.
Section 32(a)(1) allows an eligible individual an earned
income credit against the individual’s income tax liability. The
credit is a refundable credit that is treated as a payment of
tax. Secs. 6401(b), 32. The credit is based on “earned income”
which includes wages, salaries, tips, and earnings from self-
employment. Sec. 32(a), (c)(2). The amount of the credit is
determined by multiplying an individual’s earned income by a
percentage. Sec. 32(a)(1). Section 32(a)(2) limits the credit
allowed, and section 32(b) prescribes different percentages and
amounts used to calculate the credit based on whether the
eligible individual has no qualifying children, one qualifying
child, or two or more qualifying children.
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Because petitioner has not shown that she had earned income
for the year, she is not entitled to an earned income credit.
Because petitioner has not shown that she had any income for the
year, she was not required to file a Federal income tax return
and the Court need not reach the issues of her filing status and
her entitlement to dependency exemptions. See sec.
6012(a)(1)(A).
Respondent’s deficiency determination is in all respects
sustained.
Reviewed and adopted as the report of the Small Tax Case
Division.
To reflect the foregoing,
Decision will be entered
for respondent.