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items from the definition of earned income. Specifically,
section 32(c)(2)(B)(iv) provides that “no amount received for
services provided by an individual while the individual is an
inmate at a penal institution shall be taken into account” in
determining a taxpayer’s earned income.
In respondent’s motion for summary judgment, respondent
contends that section 32(c)(2)(B)(iv) is dispositive in this case
as all the wages petitioner earned during 1998 were received for
services provided while she was an inmate at a penal institution.
In her opposition to summary judgment, petitioner argues that her
wages should not be subject to section 32(c)(2)(B)(iv) because
she performed most of her services at a location outside of the
penal institution and that her employment was voluntary and not
mandated by the terms of her sentence.2
For the reasons stated below, we agree with respondent.
Section 32(c)(2)(B)(iv) expressly excludes from the computation
of the earned income credit all wages for services earned by a
taxpayer while he or she is an inmate at a penal institution.
Wilson v. Commissioner, T.C. Memo. 2001-139; Taylor v.
Commissioner, T.C. Memo. 1998-401. The sole inquiry is whether a
taxpayer earned income while he or she was an inmate at a penal
2 In her opposition to summary judgment, petitioner alleges
that she was sentenced under the Comprehensive Crime Control Act
of 1972, as amended in 1984, and was not mandated to work under
the terms of the Mandatory Work Requirement for All Prisoners, as
enacted in 1990.
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