T.C. Memo. 1996-126
UNITED STATES TAX COURT
NORMAN ALFONZO WILLIAMS, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 27006-93. Filed March 13, 1996.
Norman Alfonzo Williams, pro se.
Joanne B. Minsky, for respondent.
MEMORANDUM OPINION
GOLDBERG, Special Trial Judge: This case was heard pursuant
to section 7443A(b)(3) and Rules 180, 181, and 182.1 Respondent
determined deficiencies in petitioner's 1989 and 1990 Federal
income taxes in the respective amounts of $1,498 and $1,536, and
1
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the years at issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
2
an addition to tax for 1989 pursuant to section 6651(a)(1) in the
amount of $145.
The issues for decision are: (1) Whether petitioner is
entitled to five dependency exemptions under section 151 for the
years at issue; and (2) whether petitioner is liable for an
addition to tax for failure to file a timely return for 1989
under section 6651.
Some of the facts have been stipulated and are so found.
The stipulation of facts and exhibits received into evidence are
incorporated by this reference. Petitioner resided in Eaton
Park, Florida, at the time he filed his petition.
Petitioner married Grace Williams in September 1974. Five
children were born of this marriage: (1) Samson, born December
15, 1975; (2) Faith, born October 13, 1977; (3) Jesus, born July
14, 1979; (4) Norman, born December 30, 1980; and (5) Mary, born
November 30, 1982. Petitioner and Grace Williams separated in
May 1984, and, on October 11, 1984, an Order of Support was
entered. On June 17, 1985, a divorce decree was entered in the
Circuit Court for Polk County, Florida. Pursuant to the Order of
Support and divorce decree, Grace Williams received sole custody
of the children, with reasonable visitation allowed petitioner,
and monthly child support of $150 to be paid by petitioner.
There was no provision in the divorce decree providing which
parent would be entitled to claim the children as "dependents"
under section 151(c). No written document was ever executed by
3
Grace Williams declaring that she would not claim her children as
"dependents".
During the years at issue, the children lived with their
mother but visited petitioner on weekends and in the summer
months. Petitioner testified that he was often late making his
support payments, and, for several years, his Federal and State
tax refund checks were withheld and turned over to the State of
Florida for application to his arrearages. The parties stipulate
that petitioner paid aggregate child support during 1989 and 1990
of $1,879.03 and $2,199.84, respectively. Because Grace Williams
was unemployed during the years at issue, the children received
the following support from Federal and State agencies:
Program 1989 1990
Aid to families with dependent children (AFDC) $6,372 $6,352
Food stamps 3,708 5,269
Moreover, all of the children were eligible for Medicaid coverage
and benefits, and the entire family lived in subsidized housing
provided by the State.
Petitioner's 1989 Federal income tax return was due on or
before April 15, 1990. Petitioner did not file any requests for
extensions to file, and respondent received petitioner's 1989
return on February 4, 1991. On his 1989 and 1990 Federal income
tax returns, petitioner claimed each of the five children as
dependents. In the notice of deficiency, respondent determined
that petitioner was not entitled to dependency exemptions for any
4
of his children because petitioner had not established that he
was the custodial parent or that the requirements of section 152
to qualify the children as "dependents" had been met for the
years at issue.
The determinations by respondent in a notice of deficiency
are presumed correct, and the burden of proof is on the taxpayer
to prove that the determinations are erroneous. Rule 142(a);
Welch v. Helvering, 290 U.S. 111 (1933). Section 151(c) allows
taxpayers an annual exemption amount for each "dependent" as
defined in section 152. According to section 152(a), the term
"dependent" means certain individuals, such as a son or daughter,
"over half of whose support, for the calendar year in which the
taxable year of the taxpayer begins, was received from the
taxpayer (or is treated under subsection (c) or (e) as received
from the taxpayer)".
The support test in section 152(e)(1) applies if: (1) A
child receives over half of his support during the calendar year
from his parents; (2) the parents are divorced under a decree of
divorce; and (3) such child is in the custody of one or both of
his parents for more than one-half of the calendar year. If
these requirements are satisfied,
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 (* * * referred to
as the custodial parent).
Sec. 152(e)(1).
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To decide who has "custody", section 1.152-4(b), Income Tax
Regs., provides that custody "will be determined by the terms of
the most recent decree of divorce" if there is one in effect.
Since petitioner's divorce decree grants custody of each of the
five children to his ex-wife, Grace Williams, she is considered
the children's "custodial parent" under section 152(e). As the
"noncustodial parent", petitioner is treated as providing over
half of a child's support and allowed to claim such child as a
dependent if any one of three statutory exceptions is met:
(1)(a) The custodial parent signs a written
declaration that such custodial parent will not claim
such child as a dependent, and
(b) the noncustodial parent attaches such written
declaration to the noncustodial parent's return for the
taxable year (section 152(e)(2));
(2) a multiple support agreement pursuant to section
152(c) determines support (section 152(e)(3)); or
(3)(a) a qualified pre-1985 instrument provides that
the noncustodial parent shall be entitled to any deduction
allowable under section 151 for such child, and
(b) the noncustodial parent provides at least $600 for
the support of such child during the calendar year (section
152(e)(4)).
A threshold requirement for the applicability of the special
rules of section 152(e) in the case of divorced parents is that
the parents must provide over one-half of the child's support.
Sec. 1.152-4(a), Income Tax Regs. Therefore, if a third party,
such as a Federal or State agency, were to provide 50 percent or
more of a child's support, neither parent would be entitled to
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claim an exemption. See, e.g., Hopkins v. Commissioner, 55 T.C.
538, 540-541 (1970); Leggett v. Commissioner, T.C. Memo. 1976-7;
Batchelor v. Commissioner, T.C. Memo. 1970-24.
In the instant case, Grace Williams was unemployed during
1989 and 1990 and provided no direct financial support for her
children. The support provided by petitioner in 1989 and 1990
was significantly less than that provided by Federal and State
agencies in the form of AFDC payments, medicaid, food stamps, and
subsidized housing. Therefore, we conclude that petitioner and
Grace Williams did not provide more than one-half of the support
of their five children during the years at issue. Furthermore,
Grace Williams did not sign a written declaration that she would
not claim her children as dependents, and there is no evidence of
a multiple support agreement. Based on the foregoing, we
conclude that petitioner is not entitled to claim any of his five
children as dependents, and respondent's determination
disallowing the dependency exemptions claimed by petitioner is
sustained.
Next we consider whether petitioner is liable for an
addition to tax under section 6651. This section imposes an
addition to tax for failure to timely file a tax return. The
addition to tax is equal to 5 percent of the amount of the tax
required to be shown on the return if the failure to file is for
not more than 1 month, with an additional 5 percent for each
month in which the failure to file continues, to a maximum of 25
7
percent of the tax. The addition to tax is applicable unless it
is established that the failure to file is due to reasonable
cause and not due to willful neglect. Sec. 6651(a)(1).
Petitioner bears the burden of establishing that he is not liable
for this addition to tax. Rule 142(a).
Petitioner filed his 1989 Federal income tax return on
February 4, 1991, almost 1 year after the return was due. He
filed no requests for extensions and presented no evidence as to
why the return was untimely. Therefore, we sustain respondent on
this issue.
To reflect the foregoing,
Decision will be entered
for respondent.