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Present Law
Under present law, the deficiency procedures
allowing taxpayers to litigate issues in the Tax Court
relating to the earned income credit (sec. 32) and the
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.
There is no mention of the amendment in H. Conf. Rept. 100-1104
(1988), 1988-3 C.B. 473.
Consistent with the plain language of section 6211(b)(4), it
follows that, where petitioner reported a tax liability of zero
and claimed an overpayment based upon an earned income credit of
$335, the latter amount is treated as a negative amount of tax.
In this regard, respondent’s determination that petitioner’s
correct tax liability is zero and that petitioner is not entitled
to an earned income credit constitutes the determination of a
deficiency within the meaning of section 6211. The fact that the
refund of $335 was intercepted by prison officials in cooperation
with the IRS does not change this result. The fact of payment of
the credit amount is not taken into account under section
6211(b)(4). Under the circumstances, we conclude that the Court
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Last modified: May 25, 2011