T.C. Memo. 2000-143
UNITED STATES TAX COURT
OSCAR HUGHES, JR., Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 4752-98. Filed April 20, 2000.
Russell Brown, for petitioner.
J. Craig Young, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
CARLUZZO, Special Trial Judge: Respondent determined
deficiencies of $3,759 and $4,187 in petitioner's 1995 and 1996
Federal income taxes, respectively. Unless otherwise indicated,
section references are to the Internal Revenue Code in effect for
the years in issue. Rule references are to the Tax Court Rules
of Practice and Procedure.
- 2 -
The issues for decision for each year in issue are:
(1) Whether petitioner is entitled to claim dependency exemption
deductions for his three children; (2) whether petitioner
qualifies as a head of household; and (3) whether petitioner is
entitled to an earned income credit.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
Petitioner was not married during, or as of the close of, either
year in issue. He filed timely Federal income tax returns for
those years. At the time the petition was filed, petitioner
resided in North Charleston, South Carolina.
Petitioner and Delores Hamilton are the natural parents of
Oscar Hughes III, born November 15, 1985; Nestoshae Delores
Hughes, born November 20, 1986; and Antonio Hughes, born May 28,
1989 (the children). Petitioner and Ms. Hamilton lived together
from 1980 until 1988 or 1989; they have never been married to
each other.
On May 6, 1994, in response to a Motion for Temporary Relief
filed on her behalf in the appropriate local court, Ms. Hamilton
was awarded legal custody of the children, and petitioner was
ordered to pay child support in the amount of $397 per month,
which he did throughout the years in issue. Petitioner was also
directed to “provide health and dental insurance coverage through
- 3 -
his employer for the benefit of the * * * children”, which he
also did throughout the years in issue.
Petitioner has been employed with the Charleston County
Public Works Department since 1981 and was so employed during the
years in issue. His wages from his employment for those years
were $10,719 and $13,716, respectively. Petitioner had no other
income during those years. Ms. Hamilton was not employed and had
no income during 1995 or 1996. In addition to the child support
that she received from petitioner, Ms. Hamilton collected various
forms of public assistance on behalf of herself and the children.
She did not file a Federal income tax return for either year.
In 1995 and 1996, petitioner lived in a three-bedroom, one-
and-a-half-bathroom mobile home that he purchased sometime after
separating from Ms. Hamilton; she lived in a public housing
project. Petitioner purchased a three-bedroom mobile home so
that his daughter could have her own bedroom, and his sons could
share a bedroom of their own when the children stayed with him.
The children attended public schools during the years in
issue. When school was in session, they lived with Ms. Hamilton
at the public housing project. On most weekends during the
school year and throughout the summer recess, the children lived
with petitioner in his mobile home. When the children lived with
him, petitioner incurred expenses for their food, clothing,
medical treatments and recreational activities.
- 4 -
Petitioner listed his filing status as a head of household
on his Federal income tax return for each year in issue. He did
not elect to itemize deductions for either year. Relevant for
our purposes, on each return he claimed a dependency exemption
deduction for each of his children and an earned income credit.
Petitioner computed the earned income credit claimed on each
return by treating two of his children as “qualifying” children.
Delores Hamilton did not file a Federal income tax return
for any year in issue. For each year she signed a Form 8332,
Release of Claim to Exemption for Child of Divorced or Separated
Parents.
In the notice of deficiency for each year, respondent
changed petitioner’s filing status from head of household to
single and reduced the standard deduction accordingly.
Respondent also disallowed all of the claimed dependency
exemption deductions and the earned income credit. No
explanations for the adjustments were included in the notices of
deficiency.
OPINION
I. Dependency Exemption Deductions
Generally, section 151(c) allows a taxpayer a dependency
exemption deduction for each dependent as defined in section 152.
The term "dependent" includes certain individuals, such as a son
or daughter, "over half of whose support, for the calendar year
- 5 -
* * * was received from the taxpayer (or is treated under
subsection * * * (e) as received from the taxpayer)". Sec.
152(a).
Section 152(e) provides special rules for a child of parents
who have not lived together for the last 6 months of the calendar
year. In that situation, the statute provides that if a child
receives over one-half of his or her support from his or her
parents, the child shall be treated as receiving over one-half of
his or her support from the custodial parent, unless, as relevant
here, 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,”
and “the noncustodial parent attaches such written declaration to
the noncustodial parent’s return for the taxable year beginning
during such calendar year.” Sec. 152(e)(2)(A) and (B). Under
those circumstances the child is treated as receiving over one-
half of his or her support from the noncustodial parent.
Petitioner relies upon section 152(e) in support of his
position that he is entitled to the dependency exemption
deductions claimed on his returns. Respondent argues, primarily,
that section 152(e) does not apply because it has not been
established that the children received over one-half of their
support from their parents.
- 6 -
For purposes of the dependency exemption deduction, support
is defined to include “food, shelter, clothing, medical and
dental care, education, and the like.” Sec. 1.152-1(a)(2)(i),
Income Tax Regs. Respondent points out that the record does not
reveal the exact amount of public assistance that Delores
Hamilton received on behalf of the children during the years in
issue. Therefore, according to respondent, it cannot be
determined whether petitioner and Delores Hamilton provided over
one half of the children’s support. We disagree. Although the
record is not as complete as we would like, we are satisfied that
the amount of child support petitioner paid, plus the value of
the housing that he provided for the children, plus the cost of
the children’s medical insurance, plus the incidental expenses he
incurred for food, clothing, and entertainment while the children
resided at his house, plus whatever support the children received
from Delores Hamilton from nonpublic sources, amounted to more
than one-half of the children’s total support during the years in
issue.
We have considered respondent’s other argument in support of
the disallowances of the dependency exemption deductions here in
dispute and find the argument to have no application under the
circumstances of this case. Therefore, petitioner is entitled to
a dependency exemption deduction for each of his children for
each year in issue.
- 7 -
II. Head-of-Household Filing Status
In addition to satisfying other requirements not here in
dispute, in order to qualify as a head of household, a taxpayer
must maintain as his or her home a household that constitutes for
more than one-half of the taxable year the principal place of
abode, as a member of such household, of a child of the taxpayer.
See sec. 2(b). Respondent argues that petitioner’s house was not
the principal place of abode for more than one-half of either
year in issue of any of petitioner’s children. We agree.
Although petitioner enjoyed and exercised substantial visitation
rights, custody of the children during the years in issue was
with Delores Hamilton, and the children resided with her for
most of both years in issue. Consequently, respondent’s
determinations that petitioner does not qualify as a head of
household for either year in issue are sustained.
III. Earned Income Credit
Section 32(a) provides for an earned income credit in the
case of an eligible individual. Because of his income for each
year in issue, petitioner is entitled to an earned income credit
only if he is entitled to treat any of the children as a
qualifying child, as defined in section 32(c)(3). Among other
requirements, to be treated as a qualifying child, the child must
have the same principal place of abode as the taxpayer for more
than one-half of the taxable year. We have previously found that
- 8 -
this did not occur during either year in issue. Consequently,
petitioner may not treat any of the children as a qualifying
child for either 1995 or 1996. It follows that respondent’s
determinations disallowing the earned income credits claimed on
petitioner’s returns are sustained.
To reflect the foregoing,
Decision will be
entered under Rule 155.