T.C. Memo. 1997-228
UNITED STATES TAX COURT
MICHAEL G. CORREALE, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 26760-95. Filed May 13, 1997.
Michael G. Correale, pro se.
Janet J. Johnson, for respondent.
MEMORANDUM OPINION
CARLUZZO, Special Trial Judge: This case was heard pursuant
to the provisions of section 7443A(b)(3) and Rules 180, 181, and
182. Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for 1994. All Rule
references are to the Tax Court Rules of Practice and Procedure.
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Respondent determined a deficiency in petitioner's 1994 Federal
income tax in the amount of $1,193.
The issue for decision is whether petitioner is entitled to
dependency exemption deductions for two of his four children
listed as dependents on his 1994 Federal income tax return. The
resolution of this issue depends upon whether petitioner was
legally separated from his spouse under a decree of separate
maintenance as of the close of 1994.
Background
The case was submitted fully stipulated. The stipulated
facts are incorporated in our findings by this reference. At the
time that the petition was filed in this case, petitioner resided
in Fairview Heights, Illinois.
On August 9, 1974, petitioner married Pamela M. Correale
(Mrs. Correale). There were four children born of the marriage:
Natalyne, Christian, Michael, and Robert. During 1994
petitioner, Mrs. Correale, and their four children resided
together at 9 Metcalf Drive, Belleville, Illinois, (the marital
residence) from January through August. Petitioner paid all of
the mortgage and insurance expenses of the marital residence and
contributed more than one half of the support of all four of his
children for 1994.
In May 1994 petitioner and Mrs. Correale petitioned the
Circuit Court of the Twentieth Judicial Circuit in St. Clair
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County, Illinois, (the circuit court) for dissolution of their
marriage pursuant to 750 Ill. Comp. Stat. Ann. 5/401 (West 1996
Supp.). On August 24, 1994, in response to some type of
application for relief filed by Mrs. Correale, the circuit court
issued an order (the interim order) which at least: (1) Required
petitioner to vacate the marital premises by August 31 and
granted exclusive possession of the premises to Mrs. Correale;
(2) awarded temporary custody of Michael and Robert to Mrs.
Correale; (3) awarded temporary custody of Natalyne and Christian
to petitioner; and (4) established visitation rights with respect
to the children.
Pursuant to the interim order, petitioner and Mrs. Correale
maintained separate residences from September through December
1994; however, as of the close of that year, they had not entered
into a written separation agreement and they had not yet been
divorced. During the last 4 months of 1994, physical custody of
the children was consistent with the mandates of the interim
order. On November 28, 1995, the circuit court entered a
Judgment of Dissolution of Marriage dissolving the marriage. As
of the date of trial in this case, certain custody matters
remained in dispute.
On his 1994 Federal income tax return, petitioner claimed
dependency exemption deductions for Michael, Robert, Natalyne,
and Christian. Mrs. Correale did not sign a written declaration
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that she would not claim dependency exemption deductions for
Michael and Robert on her 1994 Federal income tax return.
In the notice of deficiency respondent disallowed the
dependency exemption deductions claimed for Michael and Robert
explaining that petitioner failed to establish that he provided
more than one half of their total support.
Discussion
Respondent argues that her adjustments should be sustained
because petitioner, as the noncustodial parent of Michael and
Robert, is precluded from claiming dependency exemption
deductions for those children pursuant to section 152(e)(1),
which states:
(1) Custodial parent gets exemption. Except as
otherwise provided in this subsection, if--
(A) a child (as defined in section
151(c)(3))receives over half of his support during the
calendar year from his parents--
(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 section
(a), as receiving over half of his support during the
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calendar year from the parent having custody for a
greater portion of the calendar year (hereinafter
referred to as the "custodial parent").
Petitioner argues that he was not legally separated as of the
close of 1994 and therefore section 152(e)(1) does not apply.
According to petitioner he has satisfied the provisions of
sections 151(c) and 152(a) and is entitled to dependency
exemption deductions for Michael and Robert. Respondent
apparently agrees that, but for the application of section
152(e)(1), petitioner is entitled to the deductions here in
dispute.
As of the close of 1994, petitioner and Mrs. Correale
(1) were not divorced, (2) were not separated under a written
separation agreement, and (3) had not lived apart at all times
during the last 6 months of the year. Consequently, the
application of section 152(e)(1) depends upon whether as of the
close of 1994 petitioner and Mrs. Correale were legally separated
under a decree of separate maintenance. In turn, this
determination depends upon whether the interim order constitutes
a decree of separate maintenance that rendered petitioner legally
separated within the meaning of section 152(e)(1)(A)(i).
Respondent argues that it does; petitioner disagrees. For the
following reasons, we agree with petitioner.
Petitioner's marital status as of the close of 1994 is
determined by Illinois law. Deyoe v. Commissioner, 66 T.C. 904,
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913 (1976); Muracca v. Commissioner, T.C. Memo. 1980-91. In that
State legal separations are specifically and exclusively provided
by statute. Brand v. Brand, 53 Ill. App. 2d 190, 192-193, 203
N.E.2d 4 (1964). An action for a legal separation is distinct
from an action for a divorce. Compare 750 Ill. Comp. Stat. Ann.
5/401 (West 1996 Supp.), entitled "Dissolution of marriage" to
750 Ill. Comp. Stat. Ann. 5/402 (West 1993), entitled "Legal
separation". See Petta v. Petta, 321 Ill. App. 512, 53 N.E.2d
324 (1944).
In Illinois a decree issued in connection with an action
filed under 750 Ill. Comp. Stat. Ann 5/402 no doubt would
constitute a decree of separate maintenance that legally
separates a husband and a wife within the meaning of section
152(e)(1)(A)(i), but petitioner and Mrs. Correale were not
involved in such an action. They were involved in an action
filed pursuant to 750 Ill. Comp. Stat. Ann. 5/401 (West 1996
Supp.), the object of which was to obtain the divorce that was
subsequently granted.
Because neither petitioner nor Mrs. Correale instituted an
action against the other in 1994 for a legal separation under 750
Ill. Comp. Stat. Ann 5/402 (West 1993), pursuant to Illinois law
they could not have been legally separated as of the close of
that year. The interim order issued in connection with their
divorce proceeding did not render them legally separated. See
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Dunn v. Commissioner, 70 T.C. 361 (1978), affd. without published
opinion 601 F.2d 599 (7th Cir. 1979) (holding, under similar
circumstances, that the taxpayer could not file as a single
individual because a temporary order issued in connection with a
divorce proceeding did not render the taxpayer legally separated
in a State that specifically provided by statute for legal
separations).
As of the close of 1994, petitioner (1) was not divorced or
legally separated from Mrs. Correale, (2) was not separated from
Mrs. Correale pursuant to a written separation agreement, and (3)
did not live apart from Mrs. Correale at all times during the
last 6 months of that year. Consequently section 152(e) is not
applicable. There being no dispute that petitioner has satisfied
all of the other requirements necessary for the deductions under
sections 151 and 152, see INDOPCO, Inc. v. Commissioner, 503 U.S.
79, 84 (1992); New Colonial Ice Co. v. Helvering, 292 U.S. 435,
440 (1934), it follows, and we therefore hold, that petitioner is
entitled to the dependency exemption deductions here in dispute.
Because of our holding we need not address petitioner's
contention that he was not the noncustodial parent of Michael and
Robert.
To reflect the foregoing,
Decision will be
entered for petitioner.