Academic journal article Journal of Accountancy

"Begging" Doesn't Equal Earned Income

Academic journal article Journal of Accountancy

"Begging" Doesn't Equal Earned Income

Article excerpt

Last fall, the Tax Court issued several unusual related memorandum decisions on the earned income tax credit (EITC)--a refundable credit available to taxpayers with income below a specific threshold.

The cases involved five prisoners who attempted to claim the EITC on money they had obtained from "begging." The Florida inmates claimed that money they solicited from family and friends was earned income from begging. In each case, the prisoner's taxable income was insufficient to result in a tax liability. Also, the inmate had not made any estimated payments or any withholdings during the years in question.

The prisoners claimed EITC refunds in amounts from $17 to $90. Two claimed the credit for two years (1996 and 1997). The others claimed it for only one year.

The court round the amounts received by the inmates were gifts and not income. In its decision, the court determined that friends and family gave the money to the prisoners out of charity with no expectation of repayment. It said the money was not earned and therefore could not be considered income. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.