2006 Tax Ct. Summary LEXIS 12">*12 PURSUANT TO INTERNAL REVENUE CODE SECTION 7463(b), THIS OPINION MAY NOT BE TREATED AS PRECEDENT FOR ANY OTHER CASE.
POWELL, Special Trial Judge: This case was heard pursuant to
The term petitioner refers to Michael E. Taylor. Respondent determined a deficiency of $ 1,296 in petitioners' 2002 Federal income tax and a penalty under
Petitioners resided in Stockbridge, Georgia, at the time the petition was filed.
Background
Petitioner and Laura F. Jenkins (Mrs. Jenkins) divorced on September 11, 1998, and are the parents of two minor children. They lived apart during all of 2002, with Mrs. Jenkins residing in Henry County and petitioner residing in Clayton County. Together they provided over one-half of their children's support for 2002.
In 2001, an order establishing joint legal and physical custody (custody order) set forth a 1 week on/1 week off custody schedule, starting with an exchange on Sunday at 6 p.m. The custody order left the details regarding custody on holidays and school vacations up to petitioner and Mrs. Jenkins to work out on their own.
The terms of the custody order provide that as long as Mrs. Jenkins lives in Henry County, her home will be the children's primary residence. The custody order also provides that if Mrs. Jenkins were2006 Tax Ct. Summary LEXIS 12">*14 to move into Clayton County from Henry County her home would still be the children's primary residence. If Mrs. Jenkins were to move somewhere other than Henry County or Clayton County, the custody order states that petitioner's home in Clayton County would become the children's primary residence. Mrs. Jenkins lived in Henry County during all of 2002.
There is no mention of dependency exemption deductions in either the divorce decree or the custody order.
Petitioner claimed a dependency exemption deduction for one of his children on his 2002 Federal income tax return. Petitioner contends that this was done in accordance with an oral agreement he had with Mrs. Jenkins. Mrs. Jenkins claimed dependency exemption deductions for both children on her 2002 Federal income tax return.
Respondent issued a notice of deficiency to petitioners for the year at issue on April 30, 2004.
Petitioner asserts that he had actual physical custody of both children for a greater portion of 2002 than Mrs. Jenkins did and, therefore, he was the custodial parent for 2002. In this regard, petitioner presents the testimony of a neighbor, his mother, and petitioner Laura A. Taylor to support his claim that2006 Tax Ct. Summary LEXIS 12">*15 he had physical custody of both children for 50 to 70 percent of the year in issue. Petitioner asserts that Mrs. Jenkins's home was the children's primary residence in 2002 only for purposes of keeping the children enrolled in their current school district.
Discussion
Dependency Exemption Deduction
Custody under
A noncustodial parent may be entitled to the dependency exemption deduction if one of three exceptions in (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.
The written declaration may be made on a form to be provided by the Service for this purpose. * * *
Petitioner does not claim that he satisfies the requirements of
As an initial matter, petitioner has not presented evidence such as a detailed log or diary showing that he had actual care and custody of the children for a greater portion of 2002 than Mrs. Jenkins, and Mrs. Jenkins's calendar of events seems contrary to petitioner's position. We cannot determine from this record that the children resided with petitioner for a greater portion of 2002.
More importantly, even if petitioner submitted evidence of a detailed log or diary of the time spent with his children in 2002, we do not agree that petitioner was the custodial parent for 2002 for purposes of
Child Tax Credits
Earned Income Credit
Respondent disallowed the earned income credit claimed for petitioner's child.
Subject to limitations, an eligible individual is allowed a credit which is calculated as a percentage of the individual's earned income.
Petitioner has not shown that his home was the child's principal place of abode for more than one-half of 2002. Petitioner is not an eligible individual with a qualifying child. Respondent's disallowance of the earned income credit is sustained.
Accuracy-Related Penalty
Petitioner contends that he is not liable for the accuracy- related penalty because he is the custodial parent under
We find petitioner's claim of the dependency exemption deduction was in good faith but based on a mistaken view of the law. Petitioner consistently asserted that he had custody of both of his children for the greater portion of the calendar year. Respondent's determination of the accuracy-related penalty under
Reviewed and adopted as the report of the Small Tax Case Division.
Decision will be entered for respondent as to the deficiency and for petitioners as to the penalty under
1. Unless otherwise indicated, subsequent section references are to the Internal Revenue Code in effect for the year in issue.↩
2. Temporary regulations are entitled to the same weight as final regulations. See