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however, * * * the most significant objective of the
provision should be to assist in encouraging people to
obtain employment, reducing the unemployment rate and
reducing the welfare rolls.
S. Rept. 94-36 (1975), 1975-1 C.B. (Part II) 590, 603 to
accompany the Tax Reduction Act of 1975, Pub. L. 94-12, 89 Stat.
26, sec. 204.
At trial, petitioner testified that she was physically
disabled and should therefore be deemed to have earned income
pursuant to a special rule that “assumes an earned income of $200
per month for one qualifying person, and an earned income of $400
per month for two or more qualifying persons.” This special
rule, however, serves to ameliorate the earned income limitation
on the amount of a taxpayer’s “employment-related expenses” for
purposes of the child care credit under section 21; this special
rule does not apply in determining the amount of a taxpayer’s
earned income for purposes of the earned income credit under
section 32. See sec. 21(d)(2).
Petitioner also testified at trial that she is an inventor,
implying that her power or ability to invent is a trade or
business. However, petitioner did not allege, much less prove,
that she had net earnings from any such trade or business.
Finally, petitioner testified at trial that she received
“under $400 miscellaneous income” from “my sister and a friend of
mine”, apparently for doing “legal correspondence and a lot of
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