Allyson Christina Briggs - Page 13

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          language to achieve the same definition.  The legislative history           
          does not indicate an intent to define “earned income” in section            
          63(c)(5)(B) by reference to net earnings from self-employment.              
          Accordingly, we conclude that “earned income” in section                    
          63(c)(5)(B) means something different from “the amount of the               
          taxpayer’s net earnings from self-employment for the taxable year           
          (within the meaning of section 1402(a))”.8                                  
               Thus, the Congress (1) in TRA 1986 departed from the                   
          previous section 911 definition, (2) in TRA 1986 did not move to            
          the section 32 definition, and (3) never adopted the “maxitax”              
          section 1348 approach of using both section 911 and net earnings.           
               In RA 1971 the Congress responded to what was perceived to             
          be an abuse situation involving attempts to “game” the tax                  
          system.  The legislative language went beyond the intrafamily               
          transfers complained of, but even then the Congress decided that            
          a dependent who received such an intrafamily transfer but also              

               8 Respondent implicitly recognized that the sec. 63 and sec.           
          32 concepts of earned income were not the same.  The earned                 
          income credit worksheet specifically directs the taxpayer to                
          “Enter any profit (or loss)”.  (Emphasis added.)  1999                      
          Publication 596, Earned Income Credit (EIC), at p. 30, Worksheet            
          B, line 2.b.  In contrast the standard deduction worksheet tells            
          the taxpayer that “Generally, your earned income is the total of            
          the amount(s) you reported on Form 1040, lines * * * 12".  1999             
          1040 Forms and Instructions, at p. 30 (emphasis added).  The                
          standard deduction worksheet does not explain “Generally”, and              
          does not specifically direct the taxpayer to include business               
          losses in the earned income computation.                                    

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