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amount equal to the credit percentage of so much of the
taxpayer's earned income as does not exceed the earned income
amount. See sec. 32(a). Earned income includes wages, salaries,
tips, and other employee compensation. See sec. 32(c)(2)(A)(i).
The money petitioner received from begging does not meet the
definition of earned income provided by section 32. Rather, the
money petitioner received from his family and friends was
received as a gift. A gift is a transfer that proceeds from a
"’detached and disinterested generosity,’ * * * out of affection,
respect, admiration, charity or like impulses." Commissioner v.
Duberstein, 363 U.S. 278, 285 (1960) (quoting Commissioner v.
LoBue, 351 U.S. 243, 246 (1956)). In this case, petitioner's
friends and family did not have an expectation of repayment or
economic benefit. Instead, petitioner's family and friends
transferred money to petitioner with a detached and disinterested
generosity and out of charity.
With respect to the earned income credit, petitioner had no
earned income, and, therefore, is not entitled to the earned
income credit.
Decision will be entered
for respondent.
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Last modified: May 25, 2011