2005 Tax Ct. Summary LEXIS 23">*23 PURSUANT TO INTERNAL REVENUE CODE SECTION 7463(b), THIS OPINION MAY NOT BE TREATED AS PRECEDENT FOR ANY OTHER CASE.
GOLDBERG, Special Trial Judge: This case was heard pursuant to the provisions of
Respondent determined a deficiency in petitioner's Federal income tax of $ 2,506 for the taxable year 2002.
The issues for decision are: (1) Whether petitioner is entitled to claim a dependency exemption deduction for JTMZ; 1 (2) whether petitioner is entitled to head-of-household filing status; and (3) whether petitioner is entitled to an earned income credit for taxable year 2002.
2005 Tax Ct. Summary LEXIS 23">*24 Background
Some of the facts have been stipulated and are so found. The stipulation of facts and the attached exhibits are incorporated herein by this reference. Petitioner resided in Barnwell, South Carolina, on the date the petition was filed in this case.
Petitioner began dating Katrina Laird (Ms. Laird) sometime during 1999. At that time, Ms. Laird was separated from her spouse but was not divorced. Ms. Laird had a child from her previous relationship. Petitioner and Ms. Laird dated and lived together, along with her child from the previous relationship, for nearly 3 years. Unbeknownst to Ms. Laird and petitioner, at the time they began dating Ms. Laird was pregnant. In 1999, Ms. Laird gave birth to JTMZ. Both Ms. Laird and petitioner believed that JTMZ was their child. Petitioner loved and cared for JTMZ as if he were petitioner's own child. Petitioner and Ms. Laird had a child together, MLB, during their relationship. At all times, after birth, MLB lived with Ms. Laird. MLB is not at issue in the present case. By the taxable year 2002, petitioner and Ms. Laird parted company and no longer lived together. They did not implement a formal custody agreement when they parted company.
2005 Tax Ct. Summary LEXIS 23">*25 During 2002, petitioner worked part-time in construction and resided in a trailer on his parents' property.
In 2004, Ms. Laird requested that petitioner take a DNA paternity test to determine whether he was the father of JTMZ. The DNA paternity test verified that petitioner was not the father of JTMZ.
Petitioner electronically filed his timely Form 1040, U.S. Individual Income Tax Return, for the taxable year 2002. In his 2002 Federal income tax return, petitioner claimed JTMZ as his dependent. Petitioner also claimed head-of-household filing status and an earned income credit with JTMZ as the qualifying child.
On September 10, 2003, respondent issued a notice of deficiency denying petitioner: (1) The claimed dependency exemption deduction, (2) head-of-household filing status, and (3) the claimed earned income credit for taxable year 2002.
Discussion
In general, the Commissioner's determination set forth in a notice of deficiency is presumed correct.
Moreover, deductions are a matter of legislative grace and are allowed only as specifically provided by statute.
1. Deduction for Dependency Exemption
As previously stated, on his 2002 Federal income tax return, petitioner claimed a dependency exemption deduction for JTMZ. Respondent disallowed the deduction in the notice of deficiency. 3
2005 Tax Ct. Summary LEXIS 23">*28
In determining whether an individual received more than one-half of his or her support from the taxpayer, there shall be taken into account the amount of support received from the taxpayer2005 Tax Ct. Summary LEXIS 23">*29 as compared to the entire amount of support which the individual received from all sources. Id. A special support test applies to certain parents. (1) Custodial parent gets exemption.--Except as otherwise provided in this subsection, if-- (A) a child (as defined in (i) who are divorced or legally separated under a decree of divorce or separate maintenance, (ii) who are separated under a written separation agreement, or (iii) who live apart at all times during the last 6 months of the calendar year, and (B) such child is in the custody of one or both of his parents for more than one-half of the calendar year, such child shall be treated, for purposes of subsection (a), as receiving over half of his support during the calendar year from the parent having custody for a greater portion of the calendar year (hereinafter in this subsection referred to as the "custodial parent"). (2) Exception where custodial parent releases claim to exemption for the year.--A Child of parents2005 Tax Ct. Summary LEXIS 23">*30 described in paragraph (1) shall be treated as having received over half of his support during a calendar year from the noncustodial parent if-- (A) the custodial parent signs a written declaration (in such manner and form as the Secretary may by regulations prescribe) that such custodial parent will not claim such child as a dependent for any taxable year beginning in such calendar year, and (B) the noncustodial parent attaches such written declaration to the noncustodial parent's return for the taxable year beginning during such calendar year. For purposes of this subsection, the term "noncustodial parent" means the parent who is not the custodial parent.
If the requirements of
Petitioner testified that JTMZ resided with him during the entire taxable year 2002. Petitioner did not offer into evidence any documentation to substantiate his claim that JTMZ resided with him during the taxable year 2002. At trial, petitioner had letters that were typed by Ms. Laird claiming that JTMZ resided with petitioner during taxable year 2002. These letters were signed by Ms. Laird, petitioner's minister, and petitioner's father. However, these letters were never received into evidence in this case. On the basis of the record and the facts of the present case, we find that petitioner did not substantiate that JTMZ resided with him during the taxable year 2002. Therefore, we conclude that petitioner was not the custodial parent of JTMZ for taxable year 2002. We further conclude that the letter signed by Ms. Laird, referred to above, does not constitute a valid written declaration under
2. Head of Household
As previously stated, petitioner claimed head-of-household filing status on his 2002 Federal income tax return, and respondent changed the filing status to single in the notice of deficiency.
Section 1(b) imposes a special income tax rate on an individual filing as head of household. As relevant herein,
As previously stated, petitioner is unable to establish that his residence constituted the principal place of abode for JTMZ for more than one-half of the taxable year. Petitioner has not claimed that any other individual resided in his household. It follows, therefore, that petitioner is not entitled to claim head-of-household filing status.
3. Earned Income Credit
As previously stated, petitioner claimed an earned income credit for taxable year 2002 with JTMZ as the qualifying child. In the notice of deficiency, respondent disallowed the earned income credit in full.
Subject2005 Tax Ct. Summary LEXIS 23">*33 to certain limitations, an eligible individual is allowed a credit which is calculated as a percentage of the individual's earned income. (3) Qualifying Child.-- (A) In general.--The term "qualifying child" means, with respect to any taxpayer for any taxable year, an individual-- (i) who bears a relationship to the taxpayer described in subparagraph (B), (ii) who has the same principal place of abode as the taxpayer for more than one-half of such taxable year, and (iii) who meets the age requirements of subparagraph (C).
As previously stated, petitioner has not established that his residence was the principal place of abode for JTMZ for more than one-half of the taxable year 2002. We find that JTMZ fails the residency test of
Petitioner may, however, still qualify for an earned income credit. An individual who does not have a qualifying child may be eligible under
On this record, 2005 Tax Ct. Summary LEXIS 23">*35 the Court is unable to determine whether petitioner is eligible for an earned income credit under
Conclusion
We hold that petitioner is not entitled to claim a dependency exemption deduction for JTMZ for taxable year 2002. Petitioner also is not entitled to head-of-household filing status for taxable year 2002, or an earned income credit under
Reviewed and adopted as the report of the Small Tax Case Division.
Decision will be entered under Rule 155.
1. The Court uses only the minor child's initials.↩
2. We interpret the quoted language as requiring the taxpayer's evidence pertaining to any factual issue to be evidence the Court would find sufficient upon which to base a decision on the issue in favor of the taxpayer. See
3. The notice of deficiency did not question the paternity of JTMZ. Instead, the Commissioner, in the notice of deficiency, denied petitioner the dependency exemption deduction, head-of-household filing status, and the earned income credit because petitioner did not establish that his residence constituted the principal place of abode for JTMZ for more than one-half of the taxable year, nor did petitioner substantiate that he provided more than one-half of JTMZ's support for taxable year 2002.↩
4. As previously noted, the Commissioner did not question the paternity of JTMZ; therefore, we consider JTMZ to have met the relationship test of
