T.C. Memo. 2015-171
UNITED STATES TAX COURT
DARRYL KEITH STAPLETON, II, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 2243-13. Filed August 27, 2015.
Darryl Keith Stapleton, II, pro se.
Britton G. Wilson, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
PARIS, Judge: Respondent determined a deficiency of $4,010 in
petitioner’s Federal income tax for 2011. After concessions, the issues for
decision are whether petitioner is entitled to: (1) dependency exemption
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[*2] deductions for his minor children; (2) the earned income credit;1 (3) the child
tax credit; and (4) head of household filing status.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found. The stipulated
facts and facts drawn from stipulated exhibits are incorporated herein by this
reference. Petitioner resided in Missouri at the time he filed his petition.
Petitioner has two minor children, L.H. and K.H.2 Petitioner and the
children’s mother were never married and did not live together during the year in
issue. Petitioner and the mother had a verbal agreement that L.H. and K.H. would
reside with him every Monday and Wednesday night and every other weekend.
As of the time of trial the custody of L.H. and K.H. had not been adjudicated by
any court.3 L.H. and K.H. resided with petitioner for 176 days in 2011.4 Petitioner
1
Respondent conceded in his pretrial memorandum “that petitioner qualifies
for an earned income credit of $179, which was omitted from the notice of
deficiency.”
2
For privacy reasons, the Court refers to minor children by their initials. See
Rule 27(a)(3). Unless otherwise indicated, all section references are to the
Internal Revenue Code of 1986 (Code), as amended and in effect for the year in
issue, and all Rule references are to the Tax Court Rules of Practice and
Procedure.
3
While no court had adjudicated custody of the minor children, on February
2, 2006, the Circuit Court of St. Louis City ordered petitioner to pay child support
(continued...)
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[*3] stipulated that the mother was L.H. and K.H.’s custodial parent and that he
was their noncustodial parent in 2011.
Petitioner filed a Form 1040, U.S. Individual Income Tax Return (return),
for 2011, on which he claimed dependency exemption deductions, the child tax
credit, the earned income credit, and head of household filing status in relation to
L.H. and K.H. Petitioner did not attach Form 8332, Release/Revocation of
Release of Claim to Exemption for Child by Custodial Parent, or a similar written
statement to the return.
Respondent issued a notice of deficiency to petitioner for 2011 disallowing
petitioner’s claimed: (1) dependency exemption deductions; (2) earned income
credit; (3) child tax credit; and (4) head of household filing status.
3
(...continued)
for L.H. and K.H. to the mother.
4
The parties stipulated that L.H. and K.H. resided with petitioner for 173
days in 2011. Petitioner credibly testified that every time the minor children had
either doctor’s or dentist’s appointments he took them to the appointments and
that they resided with him the nights of the appointments. Petitioner submitted
documentation of five doctor’s or dentist’s appointments in 2011. Two of the
appointments occurred on dates L.H. and K.H. resided with petitioner under the
verbal custody and visitation agreement he had with the mother. The Court finds
that the minor children also resided with petitioner on the nights of the three
additional appointments for which petitioner provided evidence.
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[*4] OPINION
Generally, the Commissioner’s determination set forth in a notice of
deficiency is presumed correct, and the taxpayer bears the burden of showing the
determination is in error. 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 entitlement to any deduction or credit claimed on a
return. INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992); New Colonial
Ice Co. v. Helvering, 292 U.S. 435, 440 (1934).
Under certain circumstances the burden of proof as to factual matters shifts
to the Commissioner pursuant to section 7491(a). Petitioner did not argue the
applicability of section 7491(a), and the record demonstrates that the burden of
proof does not shift to respondent with respect to any of the issues in this case
because petitioner did not satisfy the requirements of paragraph (2). Accordingly,
petitioner bears the burden of proof for all issues in dispute.
I. Dependency Exemption Deductions
The Code allows as a deduction an exemption for each dependent of a
taxpayer in computing taxable income. Sec. 151(c). Section 152(a) defines a
dependent as a qualifying child or a qualifying relative of the taxpayer.
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[*5] To be a taxpayer’s qualifying child under section 152(c)(1), an individual
must: (A) bear a specified relationship to the taxpayer; (B) have the same
principal place of abode as the taxpayer for more than one-half of the taxable year;
(C) meet certain age requirements; and (D) have not provided over one-half of his
or her own support for the year.
L.H. and K.H. resided with petitioner for 176 days in 2011, less than one-
half of the taxable year. They did not have the same principal place of abode as
petitioner under subparagraph (B) of section 152(c)(1) and, therefore, were not his
qualifying children under subsection (c) for 2011.
In the case of divorced or separated parents, section 152(e) provides a
special rule notwithstanding subparagraph (B) of subsection (c)(1) to determine
which parent is entitled to a dependency exemption deduction for a child. Section
152(e) also applies to parents who were never married. King v. Commissioner,
121 T.C. 245 (2003).
Generally, a child who is in the custody of one or both of the child’s parents
for more than one-half of the calendar year and receives more than one-half of his
or her support from parents who are divorced or separated or who live apart at all
times during the last six months of the calendar year will be considered the
qualifying child of the custodial parent. Sec. 152(e)(1). Section 152(e)(4)(A)
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[*6] defines the custodial parent as “the parent having custody for the greater
portion of the calendar year.” Section 152(e)(4)(B) defines the noncustodial
parent as “the parent who is not the custodial parent.”
L.H. and K.H. resided with petitioner for 176 days and with the mother for
189 days in 2011. The mother was the minor children’s custodial parent for 2011.
See sec. 152(e)(4)(A). Petitioner did not challenge that the mother was the
custodial parent for 2011; indeed, he stipulated that fact and the fact that he was
the minor children’s noncustodial parent for 2011.
Pursuant to section 152(e), a child will be treated as a qualifying child of the
noncustodial parent rather than of the custodial parent when certain requirements
are met. Relevant here is the requirement that “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”. Sec. 152(e)(2)(A).
“The 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, 114 T.C. 184, 189 (2000), aff’d on another
ground sub nom. Lovejoy v. Commissioner, 293 F.3d 1208 (10th Cir. 2002).
“Form 8332 provides an effective and uniform way for a custodial parent to make
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[*7] the declaration required in section 152(e)(2)(A) for the benefit of the
noncustodial parent.” Armstrong v. Commissioner, 139 T.C. 468, 472 (2012),
aff’d, 745 F.3d 890 (8th Cir. 2014).
To be entitled to the dependency exemption deductions for L.H. and K.H.
under section 152(e), petitioner must have attached a completed Form 8332 or a
similar written statement to the return. He did not do so. Without a Form 8332 or
a similar written statement containing the information prescribed by section
152(e)(2), the Court is required to find that petitioner is not entitled to the
dependency exemption deductions for L.H. and K.H. for 2011. See Swint v.
Commissioner, 142 T.C. 131, 139 (2014).
II. Earned Income Credit
Section 32(a)(1) provides an eligible individual with an earned income
credit against the individual’s income tax liability, subject to a phaseout in
paragraph (2). Section 32(b) prescribes different percentages and amounts used to
calculate the credit. The amount of the credit to which an eligible individual is
entitled increases if the individual has a qualifying child (as defined in section
152(c) and determined without regard to the special rule for waiver from the
custodial parent under section 152(e)). Sec. 32(b), (c)(3).
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[*8] Because L.H. and K.H. are not petitioner’s qualifying children under section
152(c) for the reason stated above, petitioner is not entitled to the entire amount of
the earned income credit he claimed for 2011; but he is entitled to the amount
respondent conceded.5
III. Child Tax Credit
Subject to limitations, section 24(a) allows a child tax credit with respect to
a qualifying child of the taxpayer as described in section 152(c) who has not
attained age 17, see sec. 24(c)(1), for whom the taxpayer is allowed a deduction
under section 151. Because L.H. and K.H. are not petitioner’s qualifying children
under section 152(c) for the reason stated above, petitioner is not entitled to the
child tax credit for 2011.
IV. Head of Household Filing Status
Section 1(b) provides a special tax rate for an individual who qualifies as a
head of household. As relevant herein, an unmarried individual “shall be
considered a head of a household if, and only if” that individual “maintains as his
home a household which constitutes for more than one-half of such taxable year
the principal place of abode” of “a qualifying child of the individual (as defined in
section 152(c) * * *)”. Sec. 2(b)(1)(A)(i). Because L.H. and K.H. are not
5
See supra note 1.
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[*9] petitioner’s qualifying children under section 152(c) for the reason stated
above, petitioner is not entitled to head of household filing status for 2011.
V. Conclusion
L.H. and K.H. are not petitioner’s qualifying children under the Code.
Therefore, he is not entitled to dependency exemption deductions, the earned
income credit, the child tax credit, or head of household filing status in relation to
them.
The Court has considered all arguments made, and, to the extent not
mentioned, the Court concludes that they are moot, irrelevant, or without merit.
To reflect the foregoing,
Decision will be entered
under Rule 155.