T.C. Summary Opinion 2007-170



                      UNITED STATES TAX COURT



                  NEIL J. NORMAN, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 22077-05S.            Filed September 25, 2007.



     Neil J. Norman, pro se.

     John D. Davis and Thomas D. Travers, for respondent.



     WHERRY, Judge:   This case was heard pursuant to the

provisions of section 7463 of the Internal Revenue Code in effect

when the petition was filed.1   Pursuant to section 7463(b), the

decision to be entered is not reviewable by any other court, and



     1
      Unless otherwise indicated, all section references are to
the Internal Revenue Code of 1986, as in effect for the year in
issue, and all Rule references are to the Tax Court Rules of
Practice and Procedure.
                                - 2 -

this opinion shall not be treated as precedent for any other

case.

     This case is before the Court on a petition for judicial

review of a notice of deficiency.    The issues for decision are

whether petitioner is entitled to two dependency exemption

deductions and a child tax credit.

                             Background

     Some of the facts have been stipulated by the parties.       The

stipulations, with accompanying exhibits, are incorporated herein

by this reference.    At the time the petition was filed petitioner

resided in Malad City, Idaho.

     Petitioner has two daughters, JN1 and JN2.2   Petitioner

divorced his former spouse, the mother of his two daughters, by a

Judgment and Decree of Divorce issued by the District Court of

the Fifth Judicial District of Montana, Madison County, on May 5,

1993.    The Judgment and Decree of Divorce provided that

petitioner’s former spouse was the custodial parent, but “as long

as * * * [petitioner] remains current on his child support

obligations, he shall be entitled to both children as exemptions

for tax purposes.    Should he become delinquent, the * * *

[petitioner’s former spouse] may claim both children.”      For




     2
      The Court will refer to the minor children by their
initials and numbers 1 for the older daughter and 2 for the
younger daughter as their initials are the same.
                               - 3 -

taxable year 2003, petitioner was current on his child support

obligations.

     Petitioner filed timely Form 1040A, U.S. Individual Income

Tax Return, for 2003, on which he claimed dependency exemptions

for both of his daughters, and a child tax credit for JN2.

Petitioner attached to his 2003 Federal income tax return select

nonsequential pages of the Judgment and Decree of Divorce that

reflected that petitioner was entitled to the dependency

exemptions for JN1 and JN2 if petitioner was current on his child

support obligations.   The attachment was not signed by

petitioner’s former spouse.   Petitioner’s former spouse also

claimed dependency exemptions for JN1 and JN2 on her 2003 Federal

income tax return.

     The notice of deficiency was sent to petitioner on

August 22, 2005, and showed a deficiency of $2,125 for taxable

year 2003.   In the notice of deficiency, respondent disallowed

the two dependency exemptions and the child tax credit.    In

response, petitioner submitted to respondent Form 8332, Release

of Claim to Exemption for Child of Divorced or Separated Parents,

dated October 20, 2005.   Petitioner’s former spouse signed

Part I, Release of Claim to Exemption for Current Year, and

indicated the release was effective for taxable year 2003.

Neither this nor any other Form 8332 was attached to petitioner’s

2003 Federal income tax return.   Petitioner filed a timely
                               - 4 -

petition with this Court, and a trial was held in Pocatello,

Idaho, on August 28, 2006.

                             Discussion

I.   Burden of Proof

     Deductions are a matter of legislative grace, and the

taxpayer must maintain adequate records to substantiate the

amounts of any deductions or credits claimed.     Sec. 6001;

INDOPCO, Inc. v. Commissioner, 

, 84 (1992);

sec. 1.6001-1(a), Income Tax Regs.     As a general rule, the

Commissioner’s determination of a taxpayer’s liability in the

notice of deficiency is presumed correct, and the taxpayer bears

the burden of proving that the determination is improper.       See

Rule 142(a); Welch v. Helvering, 

, 115 (1933).

However, pursuant to section 7491(a)(1), the burden of proof on

factual issues that affect the taxpayer’s tax liability may be

shifted to the Commissioner where the “taxpayer introduces

credible evidence with respect to * * * such issue”.     The burden

will shift only if the taxpayer has, inter alia, complied with

substantiation requirements pursuant to the Internal Revenue Code

and “cooperated with reasonable requests by the Secretary for

witnesses, information, documents, meetings, and interviews”.

Sec. 7491(a)(2).   In the instant case, petitioner did not comply

with the substantiation requirements when his 2003 Federal income
                                  - 5 -

tax return was filed.   Accordingly, the burden remains on

petitioner.

II.   Dependency Exemption Deductions

      Section 151 allows a taxpayer to deduct a personal

exemption, as well as dependency exemptions for the taxpayer’s

dependents.   Sec. 151(a), (c).    Section 152(a) defines

“dependent”, in pertinent part, to include a son or daughter of

the taxpayer over half of whose financial support for the taxable

year was received from the taxpayer.      The claimed individuals,

JN1 and JN2, are petitioner’s daughters.      “Support” is defined as

including “food, shelter, clothing, medical and dental care,

education, and the like.”   Sec. 1.152-1(a)(2)(i), Income Tax

Regs.

      In the case of a child of divorced parents, if the child

receives over half of her support from her parents who are

divorced under a decree of divorce, and the child is in the

custody of one or both of her parents for more than one-half of

the taxable year, then the child will be treated as receiving

over half of her support from the parent having custody for a

greater portion of the calendar year (custodial parent).

Sec. 152(e)(1).   Petitioner’s former spouse was the custodial

parent of JN1 and JN2 for 2003.

      The noncustodial parent is entitled to claim the dependency

exemption deduction if one of three exceptions in section 152(e)
                                - 6 -

applies.    If an exception applies, then the noncustodial parent,

in the instant case petitioner, is treated as providing over half

of the child’s support.   Section 152(e)(2) provides that if “the

custodial parent signs a written declaration” that the custodial

parent will not claim the child as a dependent, and the

noncustodial parent attaches the written declaration to his or

her Federal tax return for the taxable year, the noncustodial

parent is entitled to the dependency exemption deduction for that

taxable year.

     The written declaration required under section 152(e)(2)

must be made either on a completed Form 8332 or on a statement

conforming to the substance of Form 8332.    Miller v.

Commissioner, 

, 189 (2000); see sec. 1.152-4(e)(3),

Income Tax Regs.; sec. 1.152-4T(a), Q&A-3, Temporary Income Tax

Regs., 49 Fed. Reg. 34459 (Aug. 31, 1984).    Form 8332 must be

attached to the noncustodial parent’s Federal income tax return

at the time of filing.    See Presley v. Commissioner, T.C. Memo.

1996-553.    Petitioner did not attach Form 8332 to his filed 2003

Federal income tax return.    Petitioner’s former spouse did not

execute Form 8332 for taxable year 2003 until October 20, 2005.

     Petitioner did attach to his 2003 Federal income tax return

select nonsequential pages from the Judgment and Decree of

Divorce.    The attachment did not bear the signature of

petitioner’s former spouse.    When a noncustodial parent attaches
                               - 7 -

to his or her Federal income tax return an order of a divorce

court allowing the noncustodial parent the dependency exemption

deduction for a dependent, section 152(e)(2) is satisfied only if

there is an accompanying signature of the custodial parent

agreeing to the release of the dependency exemption deduction

that specifies the year or years that the release is effective.

Miller v. Commissioner, supra at 195-196.    In the absence of the

custodial parent’s signature, the attachment of an order of a

divorce court allowing the noncustodial parent the dependency

exemption deduction does not satisfy the requirements of section

152(e)(2).

satisfied the requirements of section

152(e) for 2003.   Accordingly, respondent is sustained in

disallowing petitioner’s dependency exemption deductions for his

two children for taxable year 2003.

III. Child Tax Credit

     Section 24(a) authorizes a child tax credit with respect to

each “qualifying child” of the taxpayer.    As relevant to these

particular facts, a “qualifying child” means, inter alia, an

individual with respect to whom the taxpayer is allowed a

deduction under section 151.   Sec. 24(c)(1)(A).   This Court has

concluded that petitioner is not entitled to a dependency

exemption deduction under section 151 for JN2 for taxable year

2003.   Accordingly, JN2 does not fit within the meaning of
                                 - 8 -

“qualifying child” as defined by section 24(c).    Thus, the Court

concludes that petitioner is not entitled to a child tax credit

for JN2 for taxable year 2003.

     The Court has considered all of petitioner’s contentions,

arguments, requests, and statements.     To the extent not discussed

herein, the Court concludes that they are meritless, moot, or

irrelevant.

     To reflect the foregoing,



                                           Decision will be entered

                                      for respondent.