T.C. Summary Opinion 2005-7
UNITED STATES TAX COURT
RENEE MUHAMMAD, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 5970-04S. Filed January 10, 2005.
Renee Muhammad, pro se.
William L. Blagg and Laura A. McKenna, for respondent.
DEAN, Special Trial Judge: This case was heard pursuant to
the provisions of section 7463 of the Internal Revenue Code in
effect at the time the petition was filed. Unless otherwise
indicated, all subsequent section references are to the Internal
Revenue Code in effect for the year in issue, and all Rule
references are to the Tax Court Rules of Practice and Procedure.
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The decision to be entered is not reviewable by any other court,
and this opinion should not be cited as authority.
Respondent determined a deficiency in petitioner's Federal
income tax of $3,240 for 2002. After concessions,1 the issues
remaining for decision are whether petitioner is entitled to:
(1) Deductions on Schedule A, Itemized Deductions, in excess of
those allowed by respondent; and (2) an education credit.
Background
The stipulation of facts and the exhibits received into
evidence are incorporated herein by reference. Petitioner
resided in Fort Lauderdale, Florida, at the time the petition was
filed.
Petitioner, a second grade teacher, timely filed her
electronic Form 1040, U.S. Individual Income Tax Return, for
2002. On Schedule A, petitioner claimed itemized deductions of
$16,307. On Form 8863, Education Credits, petitioner claimed an
education credit of $1,500.
Petitioner's itemized deductions consisted of noncash
contributions of $500; cash contributions of $3,366; taxes of
$59; and miscellaneous expenses of $13,055, subject to the 2
percent of adjusted gross income limitation, or $12,382.
Petitioner did not provide any substantiation for her claimed
1
Respondent concedes that petitioner is entitled to a
charitable contribution deduction of $2,720 and a deduction for
union dues of $480.
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deductions except some receipts for manicures, the costs of which
she deducted as ordinary and necessary business expenses.
Respondent disallowed all of petitioner's claimed itemized
deductions.
Petitioner claimed an education credit for school supplies
she had purchased for students in her class over the course of 5
years. Petitioner did not have receipts for the items she
claimed she purchased. Respondent disallowed petitioner's
claimed education credit.
Discussion
The Commissioner's determinations are presumed correct, and
the taxpayer bears the burden of proving otherwise. Welch v.
Helvering, 290 U.S. 111, 115 (1933). Moreover, deductions are a
matter of legislative grace, and the taxpayer bears the burden of
proving that she is entitled to any deduction claimed. New
Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934); Welch v.
Helvering, supra. This includes the burden of substantiation.
Hradesky v. Commissioner, 65 T.C. 87, 90 (1975), affd. per curiam
540 F.2d 821 (5th Cir. 1976). Under section 7491(a)(1), the
burden of proof may shift to the Commissioner. Because
petitioner failed to meet the requirements of section 7491(a)(2),
the burden of proof does not shift to respondent.
Petitioner has not provided any evidence that the
expenditures were ordinary and necessary expenses of her
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employment as a teacher as opposed to personal expenditures made
for herself or made gratuitously for her students. She has not
provided any evidence that would substantiate an allowance of
itemized deductions in excess of those allowed by respondent.
Respondent's determination is sustained.
For eligible individuals, section 25A allows credits against
tax for qualified tuition and related expenses paid by the
taxpayer during the taxable year. The Hope Scholarship Credit
applies to 100 percent of so much of the qualified tuition and
related expenses paid by the taxpayer during the taxable year
(for education furnished to the eligible student during any
academic period beginning in such taxable year) as does not
exceed $1,000, plus 50 percent of such expenses so paid as
exceeds $1,000 but does not exceed the applicable limit. Sec.
25A(b). In order to be eligible for the Hope Scholarship Credit,
a student must be enrolled at least half time at an eligible
educational institution for any portion of the taxable year.
Sec. 25A(b)(2)(B) and (3).
The Lifetime Learning Credit is an amount equal to 20
percent of so much of the qualified tuition and related expenses
paid by the taxpayer during the taxable year (for education
furnished during any academic period beginning in such taxable
year) as does not exceed $5,000 in the case of taxable years
beginning before January 1, 2003. See sec. 25A(c). Section
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25A(f) defines "qualified tuition and related expenses" as
tuition and fees required for the enrollment or attendance of the
taxpayer, the taxpayer's spouse, or the taxpayer's dependent at
an eligible educational institution.
Petitioner is not entitled to a Hope Scholarship Credit
under section 25A(b) because she failed to even allege that she
was a half-time student for any portion of 2002. See sec.
25A(b)(2)(B) and (3). Petitioner is not entitled to a Lifetime
Learning Credit for 2002 because she failed to show that during
2002 she paid "qualified tuition and related expenses" within the
meaning of section 25A(c)(1) and as defined in section 25A(f)(1).
At trial, she explained that the expenditures were paid for the
benefit of her students over the course of 5 years. Such
expenditures do not constitute qualified tuition and related
expenses under section 25A. Respondent's disallowance of
petitioner's claimed education credit is sustained.
Reviewed and adopted as the report of the Small Tax Case
Division.
To reflect the foregoing,
Decision will be entered
under Rule 155.