                      123 T.C. No. 3



                UNITED STATES TAX COURT



 JACK A. FLEISCHLI, a.k.a. JACK FORBES, Petitioner v.
     COMMISSIONER OF INTERNAL REVENUE, Respondent



Docket No. 5766-03.               Filed July 14, 2004.


     In 2000, P had a net profit of more than $16,000
from the practice of law. P also earned $13,435 from
acting activities and had acting-related expenses of
$17,878 for 2000.

     A “qualified performing artist” may deduct from
gross income employee business expenses related to his
or her work as a performing artist if, inter alia, the
individual has adjusted gross income (before deducting
those business expenses) of not more than $16,000.
Sec. 62(a)(2)(B), (b)(1), I.R.C. P contends that
“adjusted gross income” in sec. 62(b)(1)(C), I.R.C.,
includes only adjusted gross income from the
performance of services as a performing artist.

     Held: The term “adjusted gross income” in sec.
62(b)(1)(C), I.R.C., means the same as “adjusted gross
income” in sec. 62(a), I.R.C., and thus is computed
based on a taxpayer’s gross income from all sources.
                               - 2 -

     Jack A. Fleischli, pro se.

     John D. Faucher, for respondent.




     COLVIN, Judge:   Respondent determined a deficiency in

petitioner’s 2000 Federal income tax of $5,580 and an accuracy-

related penalty under section 6662(a)1 of $1,116.   Respondent

concedes that petitioner is not liable for the section 6662(a)

penalty.

     After concessions, the issue for decision is whether, for

purposes of section 62(b)(1)(C), adjusted gross income includes

only a taxpayer’s income from the performance of services as a

performing artist, or whether it means the same as “adjusted

gross income” in section 62(a) and thus is computed based on a

taxpayer’s gross income from all sources.2   We hold that it means

the same as “adjusted gross income” in section 62(a).

                         FINDINGS OF FACT

     Some of the facts have been stipulated and are so found.

Petitioner resided in California when the petition was filed.




     1
       Section references are to the Internal Revenue Code in
effect for the applicable year. Rule references are to the Tax
Court Rules of Practice and Procedure.
     2
       We need not decide whether the burden of proof shifts to
respondent under sec. 7491(a), because the issue is one of law.
See sec. 7491(a).
                              - 3 -

     Petitioner was a self-employed practicing attorney in 2000.

He earned a net profit of more than $16,000 from the practice of

law in 2000.

     Petitioner also worked as an actor in 2000.   He used the

professional name “Jack Forbes”.   In that year, he earned $13,435

from acting and had acting-related expenses of $17,878.   He

reported a net loss from acting on a Schedule C, Profit or Loss

From Business, attached to his 2000 return.

     During an examination of petitioner’s 1999 return,

respondent allowed petitioner to treat his acting expenses as

adjustments to gross income for 1999.

     Respondent determined that petitioner had adjusted gross

income of more than $16,000 in 2000 and that, as a result,

petitioner may not deduct his acting expenses of $17,878 as

adjustments to gross income under section 62(a)(1) and (2)(B).3

                             OPINION

A.   Whether Adjusted Gross Income in Section 62(b)(1)(C)
     Includes Only Income From the Performance of Services as a
     Performing Artist

     1.   Background

     In computing adjusted gross income, a qualified performing

artist may deduct from gross income employee business expenses

incurred in connection with his or her performance of services in



     3
       Respondent concedes that these expenses are unreimbursed
employee expenses for 2000.
                                 - 4 -

the performing arts as an employee.      Sec. 62(a)(2)(B).   A

qualified performing artist is an individual: (1) Who performs

services in the performing arts for at least two employers during

the tax year and who receives at least $200 from each of two of

these employers; (2) whose related performing arts expenses are

more than 10 percent of such individual’s gross income from the

performance of those services; and (3) whose adjusted gross

income is not more than $16,000 before deducting those business

expenses.     Sec. 62(b)(1) and (2).   Respondent concedes that

petitioner meets requirements (1) and (2).      The parties dispute

whether petitioner had “adjusted gross income” for purposes of

section 62(b)(1)(C) of more than $16,000 in 2000.

     2.      Petitioner’s Contentions Regarding the Statutory
             Language

     Petitioner contends that the term “adjusted gross income” in

section 62(b)(1)(C) includes only petitioner’s gross income from

acting activities, not his gross income from all sources.        We

disagree.     “Adjusted gross income” is, in the case of an

individual, gross income minus certain deductions.      Sec.

62(a)(1).4    Gross income includes all income from whatever source


     4
         Sec. 62 provides, in pertinent part:

     SEC. 62. ADJUSTED GROSS INCOME DEFINED.

          (a) General Rule.--For purposes of this subtitle,
     the term “adjusted gross income” means, in the case of
     an individual, gross income minus the following
                                                   (continued...)
                                 - 5 -

derived unless excluded by law.    Sec. 61(a).     Thus, in deciding

whether petitioner qualifies under section 62(a)(2)(B) as a

performing artist, we consider whether petitioner’s adjusted

gross income (computed based on his gross income from all

sources) exceeds $16,000.

     Section 62(b)(1)(B) provides that a qualified performing

artist is an individual whose business expenses exceed 10 percent

of his or her “gross income attributable to the performance of

such services”.    Petitioner contends that section 62(b)(1)(C),

which imposes a ceiling on the amount of “adjusted gross income”

an individual may earn during the tax year and qualify as a

qualified performing artist, should be interpreted to mean the

same as section 62(b)(1)(B), that is, to include only income from

activities as a performing artist.       We disagree.   Section

62(b)(1)(C) refers to “adjusted gross income”, not to “gross


     4
      (...continued)
     deductions:

     *        *          *        *           *         *         *

               (2) Certain trade and business
          deductions of employees.--

     *        *          *        *           *         *         *

                       (B) Certain expenses of performing
                  artists.--The deductions allowed by section
                  162 which consist of expenses paid or
                  incurred by a qualified performing artist in
                  connection with the performances by him of
                  services in the performing arts as an
                  employee.
                               - 6 -

income from activities as a performing artist”.   We assume that

Congress intends a different meaning when it uses different

language.   United States v. Gonzales, 520 U.S. 1, 5 (1997);

Iraola & CIA, S.A. v. Kimberly-Clark Corp., 232 F.3d 854, 859

(11th Cir. 2000); Francisco v. Commissioner, 119 T.C. 317, 323

(2002), affd. 370 F.3d 1228 (D.C. Cir. 2004).

     Petitioner contends that respondent is estopped from

contending that petitioner is not a qualified performing artist

for 2000 because respondent determined that petitioner was a

qualified performing artist in 1999.   We disagree.   The

Commissioner is not bound in any year to allow a deduction

permitted for another year.   See Lerch v. Commissioner, 877 F.2d

624, 627 n.6 (7th Cir. 1989), affg. T.C. Memo. 1987-295; Hawkins

v. Commissioner, 713 F.2d 347, 351-352 (8th Cir. 1983), affg.

T.C. Memo. 1982-451.

     For purposes of section 62(b)(1)(C), adjusted gross income

means a taxpayer’s adjusted gross income from all sources.

Petitioner’s adjusted gross income exceeded $16,000 in 2000.

Thus, petitioner was not a qualified performing artist under

section 62(b)(1) and may not deduct from gross income his

employee business expenses incurred as a performing artist.

B.   Whether Application of Section 62(b)(1) Violates
     Petitioner’s Constitutional Rights of Due Process

     Petitioner argues that the $16,000 ceiling in section

62(b)(1) unconstitutionally discriminates against performing
                                - 7 -

artists who earn more than $16,000 annually.   Petitioner cites

Salt River Pima-Maricopa Indian Cmty. v. Yavapai County, 50 F.3d

739 (9th Cir. 1995), for the proposition that a tax is

discriminatory if it is not imposed equally upon similarly

situated groups, and contends that respondent’s reading of

“adjusted gross income” improperly discriminates between

performing artists whose performing artist income does not exceed

$16,000 and performing artists whose performing artist income

does not exceed $16,000 but whose total income from all sources

exceeds $16,000.   Petitioner also argues that the Internal

Revenue Code unconstitutionally favors elementary and secondary

school teachers, who may deduct employee business expenses up to

$250 from their gross income regardless of the amount of income

they earn, over artists.   See sec. 62(a)(2)(D), (d).   We disagree

with these arguments.

     A tax statute which provides different treatment for

different classes of persons generally does not violate the Fifth

Amendment if it has a rational basis.    Regan v. Taxation with

Representation, 461 U.S. 540, 547 (1983); United States v. Md.

Sav.-Share Ins. Corp., 400 U.S. 4, 6 (1970); Barclay & Co. v.

Edwards, 267 U.S. 442, 450 (1925); Durham v. Commissioner, T.C.

Memo. 2004-125.    Legislatures have particularly broad latitude in

creating classifications and distinctions in tax statutes.    Regan

v. Taxation with Representation, supra; Carmichael v. S. Coal &
                                 - 8 -

Coke Co., 301 U.S. 495, 509-510 (1937); Cash v. Commissioner, 580

F.2d 152, 155 (5th Cir. 1978) (different tax rates for single and

married taxpayers are constitutional), affg. T.C. Memo. 1977-405;

Barter v. United States, 550 F.2d 1239, 1240 (7th Cir. 1977)

(same).   By limiting the tax deduction at issue here to artists

with incomes under $16,000, Congress clearly intended to benefit

low-income performing artists.    We believe there is a rational

basis for targeting the provision at issue here to performing

artists with adjusted gross incomes not in excess of $16,000

because they have a greater need for assistance than higher

income performing artists.

     Petitioner points out that a statute, constitutionally valid

when enacted, may become invalid by a change in the conditions to

which it is applied, citing Baker v. Carr, 369 U.S. 186, 254, n.6

(1962), and contends that the $16,000 ceiling in section 62

violates due process because the statute contains no provision to

adjust for inflation.   Petitioner cites no authority, and we know

of none, supporting his contention that Congress’s failure to

adjust for inflation the $16,000 ceiling in section 62(b)(1)

invalidates the statute.

     Finally, petitioner contends that we must carefully consider

whether taxes imposed on performing artists, which petitioner

views as a “politically impotent class”, are discriminatory.    See

United States v. Onslow County Bd. of Educ., 728 F.2d 628, 642
                               - 9 -

(4th Cir. 1984).   Petitioner misconstrues “politically impotent

class” to include performing artists.     The term “politically

impotent class” refers to a class of people subject to tax but

who are not allowed to vote.   Id.

     We conclude that application of section 62(b)(1) to

petitioner is constitutional and does not violate petitioner’s

constitutional rights to due process of law.

     To reflect concessions and the foregoing,



                                            Decision will be entered

                                       under Rule 155.
