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credit for the certain payments of the gasoline and
special fuels tax (sec. 34) may not apply.
Explanation of Provision
The bill provides that the Tax Court deficiency
procedures apply to the credits allowable under
sections 32 and 34, notwithstanding that the credits
reduce the net tax to less than zero.
The provision applies to notices of deficiencies
mailed after the date of enactment of this bill.
H. Rept. 100-795, at 366 (1988).
Although respondent determined petitioner was liable for a
zero tax liability in each taxable year, these amounts
nevertheless exceed the negative tax liability amounts shown by
petitioner on his return for each such year. Respondent has
therefore determined deficiencies within the meaning of section
6211, and the redetermination of such deficiencies is within the
jurisdiction of this Court. See sec. 6213(a).
The second issue for decision is whether petitioner had
earned income during the years in issue, entitling him to a
section 32 earned income credit for each year.
An earned income credit is allowed to eligible taxpayers
under section 32(a) in an amount based upon a percentage of the
taxpayer’s earned income. Earned income is defined under section
32(c)(2) to include wages and other employee compensation.
Petitioner argues that he earned compensation in the amounts
indicated on the Forms W-2, Wage and Tax Statement, filed with
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