T.C. Memo. 2000-54
UNITED STATES TAX COURT
ELLA LOUISE WOOTEN, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 16544-98. Filed February 22, 2000.
Ella Louise Wooten, pro se.
Linda West, for respondent.
MEMORANDUM OPINION
COUVILLION, Special Trial Judge: Respondent determined
deficiencies of $3,759, $4,208, and $1,919 in petitioner’s
Federal income taxes for 1995, 1996, and 1997, respectively.
The issues for decision are: (1) Whether petitioner is
entitled to claim dependency exemption deductions under section
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151(c)1 for her children, William and Kenya Wooten; (2) whether
petitioner is entitled to head-of-household filing status under
section 2(a); and (3) whether petitioner is entitled to claim the
earned income credit under section 32(a).
Some of the facts were stipulated, and those facts, with the
annexed exhibits, are so found and are incorporated herein by
reference. Petitioner's legal residence at the time the petition
was filed was Jackson, Mississippi.
Petitioner was previously married to Willie Earnest Wooten
(Mr. Wooten). Two children were born of this marriage: Kenya
Darene, born on December 20, 1982, and William Barnard, born on
April 1, 1984. Petitioner and Mr. Wooten were divorced on June
21, 1991, pursuant to a Final Judgment of Divorce (divorce
decree) issued by the Chancery Court of the First Judicial
District of Hinds County, Mississippi (chancery court). The
divorce decree awarded petitioner and Mr. Wooten joint custody of
the two children but did not designate a primary residence for
the two children.
Mr. Wooten was awarded custody of the two children pursuant
to a Final Judgment Awarding Custody of Children, Visitation
Rights, Child Support and Property Settlement (custody decree)
issued by the chancery court on July 16, 1993. The custody
1
Unless otherwise indicated, section references are to
the Internal Revenue Code in effect for the years at issue.
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decree further awarded Mr. Wooten exclusive use and possession of
the family home and designated that home as the primary residence
of the children. The custody decree awarded petitioner
visitation rights and ordered petitioner to pay child support
equal to 20 percent of her adjusted gross income but not less
than $50 per month per child.
During the years at issue, Mr. Wooten made the mortgage
payments on the family home, and the two children lived with him
in that home. Mr. Wooten was employed during this period and
provided for the needs of the children. Neither Mr. Wooten nor
the two children were receiving any public assistance during the
years at issue.
On her Federal income tax returns for 1995, 1996, and 1997,
petitioner claimed dependency exemption deductions for Kenya and
William. For all 3 years, petitioner claimed head-of-household
filing status under section 2(a) and the earned income credit
under section 32(a). In a notice of deficiency for the 3 years
at issue, respondent disallowed the dependency exemption
deductions for Kenya and William and determined petitioner’s
filing status to be single. Respondent also disallowed the
earned income credit for 1995 and 1996 and adjusted petitioner's
claimed earned income credit for 1997. See infra note 2.
Respondent disallowed the dependency exemption deductions
claimed by petitioner for William and Kenya Wooten because Mr.
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Wooten was the custodial parent of the two children and was thus
treated as providing over half of their support for each year,
regardless of the actual support provided by petitioner. Section
151(c) allows taxpayers to deduct an annual exemption amount for
each dependent, as defined in section 152. Under section 152(a),
the term "dependent" means certain individuals, such as a son or
daughter, over half of whose support was received from the
taxpayer (or is treated under subsections (c) or (e) as received
from the taxpayer) during the taxable year in which such
individuals are claimed as dependents.
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, as in the present case, the
"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)" thus allowing
the dependency exemption to be claimed by the "custodial parent".
Sec. 152(e)(1).
To decide who has custody, section 1.152-4(b), Income Tax
Regs., provides that custody will be determined by the terms of
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the most recent custody decree if there is one in effect. Since
the State court custody decree declared that the primary
residence of the children was with Mr. Wooten, he is considered
the children’s custodial parent under section 152(e). Therefore,
Mr. Wooten is entitled to claim the dependency exemption
deductions for William and Kenya.
Petitioner, as the noncustodial parent, would be allowed the
dependency exemption deductions only if one of three statutory
exceptions were met. Under these exceptions, the noncustodial
parent is treated as providing over half of a child’s support
and, therefore, is entitled to the dependency exemption
deductions if:
(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)); or
(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
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(b) the noncustodial parent provides at least $600 for
the support of such child during the calendar year (section
152(e)(4)).
None of the exceptions to the general rule apply in the
present case. Petitioner did not present evidence of a written
declaration from Mr. Wooten relinquishing his right to claim
Kenya and William as dependents, there was no multiple support
agreement, and there was no pre-1985 instrument since
petitioner’s divorce decree was rendered in 1991. Accordingly,
the Court sustains respondent’s determination that petitioner is
not entitled to dependency exemption deductions for Kenya and
William for 1995, 1996, and 1997.
Respondent determined petitioner’s filing status to be
single rather than head-of-household for 1995, 1996, and 1997 and
disallowed the earned income credit for 1995 and 1996 because
William and Kenya did not reside with petitioner for more than 6
months during any of these years. Respondent also adjusted the
amount of petitioner's 1997 earned income credit to reflect that
petitioner did not have a qualifying child for that year because
William and Kenya did not reside with petitioner for more than 6
months during 1997. See infra note 2.
Section 2(b) defines head-of-household as an individual
taxpayer who is unmarried at the close of his or her taxable year
and who maintains as his or her home a household that constitutes
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the principal place of abode for more than one-half of the
taxable year of a son or daughter of the taxpayer who resides
there as a member of that household. An individual taxpayer is
considered as maintaining a household only if he or she furnishes
more than one-half of the cost of maintaining that household.
See sec. 2(b).
Section 32(a) provides for an earned income credit in the
case of an eligible individual. Section 32(c)(1)(A), in
pertinent part, defines an "eligible individual" as an individual
who has a qualifying child for the taxable year.2 Sec.
32(c)(1)(A)(i). A qualifying child is one who satisfies a
relationship test, a residency test, an age test, and an
identification requirement. See sec. 32(c)(3). To satisfy the
residency test, the qualifying child must have the same principal
place of abode as the taxpayer for more than one-half of the
taxable year in which the credit is claimed. See sec.
32(c)(3)(A)(ii).
2
Although petitioner may be considered an eligible
individual without a qualifying child pursuant to sec.
32(c)(1)(A)(ii), petitioner is not entitled to an earned income
credit for 1995 and 1996 because her adjusted gross income for
those years exceeds the sec. 32(a) limitation for such eligible
individuals. However, petitioner's 1997 adjusted gross income
did not exceed the sec. 32(a)(2) limitation for such eligible
individuals. Accordingly, respondent allowed petitioner the
earned income credit for 1997 as an eligible individual without a
qualifying child. However, petitioner's claim to the earned
income credit was based on her having two qualifying children.
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Mr. Wooten was awarded custody of the two children in 1993.
William and Kenya lived with Mr. Wooten, and he provided their
support during the years at issue. Petitioner did not provide
any evidence that Kenya or William resided in her home for more
than 6 months during 1995, 1996, or 1997. Since the two children
did not have their principal place of abode with petitioner for
more than 6 months during 1995, 1996, or 1997, petitioner is not
entitled to head-of household filing status for those years or
the earned income credit for 1995 and 1996, nor is she entitled
to the earned income credit as an eligible person with two
qualifying children. Respondent, therefore, is sustained in the
disallowance of petitioner’s claimed head-of-household filing
status for 1995, 1996, and 1997 and the earned income credit for
1995 and 1996 as well as in the adjustment of petitioner's 1997
earned income credit.
In addition, petitioner presented no evidence to establish
the amount of support she provided during the years in question
and no evidence to establish that such amounts constituted more
than one-half of the total support provided to her children. The
record contains copies of several State court orders that decreed
petitioner in arrears in her child support obligations and
ordered withholdings from her earnings to be paid to the
Department of Human Services, State of Mississippi. In addition,
for 1 or more of the years at issue, it appears that the
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refundable earned income credit claimed by petitioner on her
income tax returns was remitted by respondent to the Mississippi
Department of Human Services, under section 6402(c), to offset
petitioner’s past due support obligations. At trial, petitioner
challenged respondent’s authority to remit such amounts; however,
this Court has no authority to restrain or review any credit or
reduction made by the Commissioner under section 6402. See sec.
6512(b)(4); Savage v. Commissioner, 112 T.C. 46 (1999).
Decision will be entered
for respondent.