PURSUANT TO INTERNAL REVENUE CODE
SECTION 7463(b),THIS OPINION MAY NOT
BE TREATED AS PRECEDENT FOR ANY
OTHER CASE.
T.C. Summary Opinion 2013-82
UNITED STATES TAX COURT
LARRY HALL, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 5196-11S. Filed October 28, 2013.
Larry Hall, pro se.
Emile Louis Hebert, III and Ardney J. Boland, III, for respondent.
SUMMARY OPINION
ARMEN, Special Trial Judge: This case was heard pursuant to the
provisions of section 7463 of the Internal Revenue Code in effect when the
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petition was filed.1 Pursuant to section 7463(b), the decision to be entered is not
reviewable by any other court, and this opinion shall not be treated as precedent
for any other case.
Respondent determined a deficiency in petitioner’s 2008 Federal income tax
of $3,050. After concessions by respondent,2 the issues remaining for decision
are:
(1) Whether petitioner is entitled to a dependency exemption deduction in
respect of minor child N.H. for 2008. We hold that he is not;
(2) whether petitioner is entitled to the child tax credit in respect of N.H. for
2008. We hold that he is not.
1
Unless otherwise indicated, all subsequent section references are to the
Internal Revenue Code in effect for the year in issue; all Rule references are to the
Tax Court Rules of Practice and Procedure.
2
Respondent concedes that petitioner is entitled to a dependency exemption
deduction for D.H. and that petitioner is entitled to head of household filing status.
Respondent also concedes that petitioner is entitled to the child tax credit for one
qualifying child, D.H. For privacy reasons, the Court refers to minor children by
their initials. See Rule 27(a)(3).
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Background
All of the facts have been deemed stipulated, and they are so found. We
incorporate by reference the stipulated facts and related exhibits. Petitioner
resided in Louisiana at the time the petition was filed.
Petitioner married Garline Melton Hall in 1973. The couple had two
children, K.H.3 and N.H. N.H. was born in 1993.4 The couple divorced in 2006.
No custody order was issued for N.H.; however, petitioner was subject to a
support proceeding order (child support document), which provided that petitioner
would pay $534 in child support each month for K.H. and N.H.
D.H. is petitioner’s biological child with his significant other, and D.H. was
born in 1998. D.H. lived with petitioner during 2008.
Petitioner timely filed his Form 1040, U.S. Individual Income Tax Return,
for the 2008 tax year. On it petitioner checked the box for head of household
3
Petitioner did not claim either a dependency exemption deduction or a
child tax credit in respect of K.H. on his 2008 tax return, and he has made no such
claim in the instant case. Therefore, no further discussion is required for this
child.
4
The record is unclear whether N.H. was born in 1992 or 1993, but we
accept the parties’ stipulation that N.H. was born in 1993. Whether N.H. was born
in 1992 or 1993 does not affect the outcome of this case.
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filing status and claimed dependency exemption deductions for two children, D.H.
and N.H. Petitioner also claimed child tax credits for D.H. and N.H.
In 2008 petitioner paid child support for N.H. as required by the child
support document. N.H. did not earn any money during 2008. N.H. did not live
with petitioner during 2008. Instead, N.H. lived with various other individuals not
otherwise identified in the record and was also incarcerated for part of 2008.
Respondent issued a notice of deficiency determining a deficiency in
income tax of $3,050 for 2008. Respondent disallowed, inter alia, petitioner’s
dependency exemption deduction for N.H. as well as the child tax credit for N.H.
Petitioner timely filed a petition for redetermination of the deficiency and
asserted that he was entitled to dependency exemption deductions and child tax
credits with respect to D.H. and N.H. for 2008, as well as head of household filing
status.5
Discussion
I. Burden of Proof
Generally, the Commissioner’s determinations are presumed correct, and the
taxpayer bears the burden of proving that those determinations are erroneous.
5
As noted above respondent concedes that petitioner is entitled to a
dependency exemption deduction and a child tax credit in respect of D.H. for
2008, as well as head of household filing status. See supra note 2.
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Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). Deductions and
credits are a matter of legislative grace, and the taxpayer bears the burden of
proving that he or she is entitled to any deduction or credit claimed. Rule 142(a);
Deputy v. du Pont, 308 U.S. 488, 493 (1940); New Colonial Ice Co. v. Helvering,
292 U.S. 435, 440 (1934). Under section 7491(a)(1), the burden of proof may
shift from the taxpayer to the Commissioner if the taxpayer produces credible
evidence with respect to any factual issue relevant to ascertaining the taxpayer’s
liability and satisfies certain other requirements. Petitioner did not allege that
section 7491 applies, nor did he introduce the requisite evidence to invoke that
section; therefore, the burden of proof remains on petitioner.6
II. Dependency Exemption Deduction
In general a taxpayer may claim a dependency exemption deduction “for
each individual who is a dependent (as defined in section 152) of the taxpayer for
the taxable year.” Sec. 151(a), (c).
A. Special Rules for Children of Divorced Taxpayers
In the case of divorced parents, special rules determine which parent may
claim a dependency exemption deduction for a child. See sec. 152(e); Espinoza v.
6
The fact that this case was fully stipulated does not alter the burden of
proof. See Rule 122(b); Kitch v. Commissioner, 104 T.C. 1, 5 (1995), aff’d, 103
F.3d 104 (10th Cir. 1996).
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Commissioner, T.C. Memo. 2011-108; cf. sec. 152(c)(4). If section 152(e)
applies, then under prescribed conditions the noncustodial parent is entitled to
claim the child as a dependent.
For section 152(e) to apply, the child must (1) be in the custody of one or
both of the child’s parents for more than one-half of the calendar year and (2)
receive more than one-half of his or her support from parents who are divorced,
separated, or live apart at all times during the last six months of the calendar year.
Sec. 152(e)(1).
The record establishes that N.H. did not live with petitioner during 2008.
Therefore, to satisfy the custody requirement of section 152(e)(1)(B), N.H. would
have had to live with his mother, Ms. Hall, for more than one-half of 2008. The
record does not establish that N.H. lived with Ms. Hall for more than one-half of
2008 but establishes only that N.H. lived with various other individuals for 2008
(and was also incarcerated for part of that year), without identifying the
individuals with whom N.H. lived or the duration of those living arrangements.
Therefore, the custody requirement of section 152(e)(1)(B) has not been satisfied.
The second requirement for section 152(e) to apply is that the child must
receive over one-half of his or her support from one or both of the child’s parents.
Sec. 152(e)(1)(A). Although the record establishes that petitioner paid $534 per
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month during 2008 consistent with the terms of the child support document,
petitioner has not established how this amount may have been allocated between
K.H. and N.H., nor the total amount of support N.H. received during 2008.
Because the total support N.H. received during 2008 has not been established, the
Court cannot conclude that petitioner (or petitioner and Ms. Hall together)
provided over one-half of N.H.’s support for 2008. Therefore, the support
requirement of section 152(e)(1)(A) has not been satisfied.
Because the two basic conditions for section 152(e) to apply have not been
satisfied, section 152(e) does not serve to determine whether petitioner may claim
N.H. as a dependent for purposes of the dependency exemption deduction.
The Court must now decide whether petitioner might claim N.H. as a
dependent under some other provision of section 152, namely, as either a
qualifying child under section 152(c) or as a qualifying relative under section
152(d).
B. Qualifying Child
Generally, to be considered a “qualifying child” for purposes of the
dependency exemption deduction, the individual must: (1) bear a specified
relationship to the taxpayer; (2) have the same principal place of abode as the
taxpayer for more than one-half of the taxable year; (3) meet certain age
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requirements; and (4) not have provided over one-half of such individual’s support
for the taxable year at issue. Sec. 152(c)(1).
The record establishes that N.H. is petitioner’s child, that N.H. was under
the age of 19 in 2008, and that N.H. did not earn any income during 2008.
However, the record also establishes that N.H. did not live with petitioner during
2008. Therefore, because petitioner and N.H. did not share the same principal
place of abode for more than one-half of 2008, petitioner is unable to claim N.H.
as a qualifying child for purposes of the dependency exemption deduction. See
sec. 152(c)(1).
C. Qualifying Relative
An individual who meets the four requirements in section 152(d)(1)(A)-(D)
with respect to the taxpayer is a qualifying relative. The two pertinent
requirements here are that (1) the taxpayer must provide over one-half of the
individual’s support for the taxable year, and (2) the individual must not be a
qualifying child of the taxpayer or any other taxpayer for the taxable year. Sec.
152(d)(1)(C) and (D).
The record establishes that petitioner provided $534 per month for the
support of N.H. and K.H.; however, as discussed above, petitioner has not
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produced evidence that what he provided was over one-half of N.H.’s support for
the year. Therefore, the requirement of section 152(d)(1)(C) is not satisfied.
Additionally, petitioner has not produced evidence that N.H. was not the
qualifying child of Ms. Hall or any other taxpayer for 2008. Athough the record
establishes that N.H. lived with various other individuals during 2008 (and was
incarcerated for part of that year), the record does not provide any information
regarding the identities of the individuals with whom N.H. lived or the duration of
each living arrangement. Because petitioner has not established that N.H. was not
the qualifying child of Ms. Hall or any other taxpayer for 2008, the requirement of
section 152(d)(1)(D) is not satisfied.
Special rules apply if no one person contributed over half of an individual’s
support. Sec. 152(d)(3). When that is the case, a taxpayer contributing over 10%
percent of such support may claim the individual as a qualifying relative when,
inter alia, other taxpayers who also contributed more than 10% of the individual’s
support sign a written declaration that they will not claim the individual as a
dependent. Sec. 152(d)(3)(A)-(D).
Petitioner has not introduced any evidence to establish that no other
taxpayer contributed over one-half of N.H.’s support or that the other requirements
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of section 152(d)(3), such as the requisite written declaration, have been satisfied.
Therefore, this section does not apply.
In sum petitioner has not satisfied the requirements to claim N.H. as his
qualifying relative pursuant to section 152(d). Accordingly, N.H. is not
petitioner’s qualifying relative for 2008 for purposes of the dependency exemption
deduction.
III. Child Tax Credit
Section 24(a) and (c)(1) provides that a taxpayer is entitled to a child tax
credit with respect to “each qualifying child”, as defined in section 152(c), who
has not attained age 17.
Petitioner claimed N.H. as a qualifying child on his tax return for purposes
of the child tax credit. However, as we have previously concluded, N.H. was not a
qualifying child for 2008 as defined by section 152(c). As a result petitioner is not
entitled to a child tax credit for 2008 with respect to N.H. See sec. 24(c)(1).
Conclusion
Petitioner points out that the child support document granted him the right
to claim K.H. and N.H. as dependents. The issue in the instant case is not to what
petitioner may have been entitled under the child support document but rather to
what he is entitled under section 152, which is solely a matter of Federal tax law.
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See Armstrong v. Commissioner, 139 T.C. 468, 474 (2012) (citing Miller v.
Commissioner, 114 T.C. 184, 196 (2000), aff’d on other grounds sub nom.
Lovejoy v. Commissioner, 293 F.3d 1208 (10th Cir. 2002)).
Finally, we have considered all of the arguments advanced by petitioner,
and, to the extent not expressly addressed, we conclude that those arguments do
not support results contrary to those reached herein.
To give effect to our disposition of the disputed issues, as well as
respondent’s concessions,
Decision will be entered under
Rule 155.