T.C. Memo. 2004-245
UNITED STATES TAX COURT
DELINDA VIANNE ROGERS, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 1803-00. Filed October 27, 2004.
DeLinda ViAnne Rogers, pro se.
Aimee R. Lobo-Berg, for respondent.
MEMORANDUM OPINION
WOLFE, Special Trial Judge: This matter is before the Court
on respondent’s motion for summary judgment, filed pursuant to
Rule 121.1 The sole issue for decision is whether petitioner, an
1
All Rule references are to the Tax Court Rules of
Practice and Procedure, and all section references are to the
Internal Revenue Code in effect at relevant times.
- 2 -
inmate at a penal institution, is entitled to an earned income
credit for taxable year 1998.
Background
Petitioner was incarcerated at the Federal Correctional
Institution in Dublin, California, throughout the taxable year
1998. While she was an inmate, petitioner was employed by
Unicor-Federal Prison Industries. For her services, petitioner
earned wages of $1,658.48 in 1998.
Petitioner reported these wages on her 1998 Federal income
tax return. She reported no other income for 1998. Petitioner
claimed the standard deduction of $6,950 and, consequently,
reported no tax liability for 1998. Petitioner claimed an earned
income credit of $128 on her 1998 return and sought a refund in
that amount.
On December 10, 1999, respondent issued a notice of
deficiency to petitioner with respect to petitioner’s 1998 tax
return. In the notice of deficiency, respondent disallowed
petitioner’s claimed earned income credit and determined a
deficiency in the amount of $128. The notice of deficiency
includes a statement that amounts paid to inmates in penal
institutions for their work are not earned income for purposes of
computing the earned income credit.
- 3 -
Discussion
Summary judgment is intended to expedite litigation and
avoid unnecessary and expensive trials. Fla. Peach Corp. v.
Commissioner, 90 T.C. 678, 681 (1988). Summary judgment may be
granted with respect to all or any part of the legal issues in
controversy “if the pleadings, answers to interrogatories,
depositions, admissions, and any other acceptable materials,
together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that a decision may be
rendered as a matter of law.” Rule 121(b); see Sundstrand Corp.
v. Commissioner, 98 T.C. 518, 520 (1992), affd. 17 F.3d 965 (7th
Cir. 1994); Zaentz v. Commissioner, 90 T.C. 753, 754 (1988);
Naftel v. Commissioner, 85 T.C. 527, 529 (1985). The moving
party bears the burden of proving that there is no genuine issue
of material fact, and factual inferences will be read in a manner
most favorable to the party opposing summary judgment. See
Dahlstrom v. Commissioner, 85 T.C. 812, 821 (1985); Jacklin v.
Commissioner, 79 T.C. 340, 344 (1982).
An eligible individual is allowed an earned income credit
for the taxable year in an amount equal to the credit percentage
of so much of the taxpayer’s earned income as does not exceed the
earned income amount. Sec. 32(a). Earned income includes wages,
salaries, tips, and other employee compensation. Sec.
32(c)(2)(A)(i). However, section 32(c)(2)(B) excludes certain
- 4 -
items from the definition of earned income. Specifically,
section 32(c)(2)(B)(iv) provides that “no amount received for
services provided by an individual while the individual is an
inmate at a penal institution shall be taken into account” in
determining a taxpayer’s earned income.
In respondent’s motion for summary judgment, respondent
contends that section 32(c)(2)(B)(iv) is dispositive in this case
as all the wages petitioner earned during 1998 were received for
services provided while she was an inmate at a penal institution.
In her opposition to summary judgment, petitioner argues that her
wages should not be subject to section 32(c)(2)(B)(iv) because
she performed most of her services at a location outside of the
penal institution and that her employment was voluntary and not
mandated by the terms of her sentence.2
For the reasons stated below, we agree with respondent.
Section 32(c)(2)(B)(iv) expressly excludes from the computation
of the earned income credit all wages for services earned by a
taxpayer while he or she is an inmate at a penal institution.
Wilson v. Commissioner, T.C. Memo. 2001-139; Taylor v.
Commissioner, T.C. Memo. 1998-401. The sole inquiry is whether a
taxpayer earned income while he or she was an inmate at a penal
2
In her opposition to summary judgment, petitioner alleges
that she was sentenced under the Comprehensive Crime Control Act
of 1972, as amended in 1984, and was not mandated to work under
the terms of the Mandatory Work Requirement for All Prisoners, as
enacted in 1990.
- 5 -
institution; other factors, such as the status of the payor as
either a public or private entity, are irrelevant. See Wilson v.
Commissioner, supra.
In construing a statute, courts generally seek the plain and
literal meaning of its language. See United States v. Locke, 471
U.S. 84, 93, 95-96 (1985); United States v. Am. Trucking
Associations, Inc., 310 U.S. 534, 543 (1940); Wilson v.
Commissioner, supra. Under the plain and literal language of
section 32(c)(2)(B)(iv), it makes no difference whether
petitioner performed services at a location outside the penal
institution or whether her performance of services was voluntary
or compulsory. Petitioner was an inmate at a penal institution
throughout taxable year 1998, and all her wages received during
that year are excluded from the computation of the earned income
credit as a matter of law under section 32(c)(2)(B)(iv).
Because there are no genuine issues of any material fact,
respondent’s motion for summary judgment will be granted.
To reflect the foregoing,
An order and decision
will be entered granting
respondent’s Motion for
Summary Judgment and
entering decision for
respondent.