T.C. Summary Opinion 2001-171
UNITED STATES TAX COURT
WILLIAM A. CARCIERI, JR., Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 11775-00S. Filed October 25, 2001.
William A. Carcieri, Jr., pro se.
John Aletta, for respondent.
DEAN, Special Trial Judge: This case was heard pursuant to
the provisions of section 7463 of the Internal Revenue Code in
effect at the time the petition was filed. Unless otherwise
indicated, subsequent section references are to the Internal
Revenue Code in effect for the year in issue. The decision to be
entered is not reviewable by any other court, and this opinion
should not be cited as authority.
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Respondent determined a deficiency in petitioner’s Federal
income tax of $1,654 for the taxable year 1998. The issues for
decision are: (1) Whether petitioner is entitled to claim a
dependency exemption deduction for his daughter; (2) whether
petitioner qualifies for head of household filing status; and (3)
whether petitioner is entitled to claim the child tax credit.
Some of the facts have been stipulated and are so found.
The stipulation of facts and the accompanying exhibits are
incorporated herein by reference. At the time the petition was
filed, petitioner resided in Cranston, Rhode Island.
Background
Petitioner married Lillian Macera in 1977. They are the
parents of two children, Jason and Amanda. Petitioner and Ms.
Macera divorced on March 16, 1993. The divorce decree states
that the parents “shall enjoy joint custody and shared placement”
of the children while they remain minors. In 1995, when Jason
attained the age of majority, petitioner sought modification of
the support arrangement. Pursuant to court order, petitioner’s
child support obligation was reduced to $30 per week from $62 per
week. No modification of the custody arrangement was made.
In 1998, Amanda spent time at the homes of both petitioner
and Ms. Macera. The result in this case turns on the amount of
time Amanda spent at the home of each parent. In 1998, Amanda
was 16 years old.
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Petitioner timely filed his 1998 Federal income tax return
as head of household. He reported adjusted gross income of
$43,737. Petitioner claimed a dependency exemption deduction and
the child tax credit for Amanda treating her as his “qualifying
child”. Respondent issued a notice of deficiency determining
that petitioner was not entitled to head of household filing
status, the dependency exemption deduction, or the child tax
credit because he failed to substantiate his claims.
Discussion
1. Dependency Exemption Deduction
Section 151(c) allows a taxpayer to deduct an exemption
amount for each "dependent" as defined in section 152. Section
152(a) defines a dependent as a son or daughter of the taxpayer,
“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)”. Section 152(e)(1), however, provides that
if a child receives over half of his support during the calendar
year from parents who are divorced under a decree of divorce and
if the child is in the custody of one or both of his parents for
more than half of the calendar year, then the child is treated
“as receiving over half of his support during the calendar year
from the parent having custody for a greater portion of the
calendar year” (custodial parent).
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The terms of the most recent divorce decree or subsequent
custody decree determine who has "custody" for purposes of
section 152(e). Sec. 1.152-4(b), Income Tax Regs. Where parents
have joint custody under the divorce decree, the regulations
further provide that custody "will be deemed to be with the
parent who, as between both parents, has the physical custody of
the child for the greater portion of the calendar year." Id.
“For a parent to be considered as having ‘physical custody’, the
child, generally, must reside with the parent.” Condello v.
Commissioner, T.C. Memo. 1998-333 (citing White v. Commissioner,
T.C. Memo. 1996-438; Whitaker v. Commissioner, T.C. Memo. 1988-
418). Section 152(e)(2) provides that the custodial parent may
waive the right to claim the dependency exemption deduction,
allowing the noncustodial parent to claim the dependency
exemption deduction on his Federal income tax return. In this
case, however, both parents claimed a dependency exemption
deduction on their 1998 Federal income tax returns.
The factual dispute revolves around whether petitioner or
Ms. Macera had custody of Amanda for a greater portion of the
calendar year 1998. Petitioner testified that he and Ms. Macera
had shared custody of Amanda in 1998, but that Amanda lived with
him from January 1 until the “middle of June” 1998. Petitioner,
however, testified that Amanda stayed with him only “Monday,
Tuesday, Wednesday of one week, and * * * Thursday, Friday,
Saturday, Sunday of the next week.” Petitioner testified that
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Amanda lived with Ms. Macera during the time she did not stay
with him.
Amanda also attended high school in the Johnston school
district, where Ms. Macera resided. Petitioner testified that
Amanda wanted to attend school in Cranston, but a local court
ruled that the proper place for her to attend school was the
schools in Johnston. Petitioner further testified that his
mother, who lived across the street from him, would drive Amanda
to school when she spent the night at his house.
Ms. Macera testified that Amanda lived with her in Johnston,
Rhode Island, for all of 1998. Ms. Macera testified that Amanda,
during the taxable year at issue, did not spend Monday, Tuesday,
and Wednesday of one week and Thursday through Sunday of the next
week in Cranston with petitioner. Ms. Macera testified that the
only time Amanda spent with petitioner was an occasional weekend
visit where she also was able to see her grandmother. According
to Ms. Macera, Amanda’s only extended stay with petitioner was a
2-week period in which she and Amanda had a disagreement;
otherwise there was no rotation between the parents. Ms. Macera
also denied that Amanda was shuttled to high school by her
grandmother in 1998. Rather, she testified, the only time
Amanda’s grandmother drove her to school was when the child
attended middle school. Furthermore, respondent presented a
letter from Johnston High School, to which petitioner did not
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object, stating that Amanda lived with her mother for the years
1996 through 1999.
Upon the completion of Ms. Macera’s testimony, this Court
afforded petitioner the opportunity to cross-examine her about
her testimony. Petitioner, however, stated: “Your Honor, I have
no questions”, choosing not to question Ms. Macera about her
contradictory testimony. Petitioner’s failure to question Ms.
Macera’s testimony leads the Court to conclude that Amanda spent
little time residing at petitioner’s home and most of her time at
her mother’s house. Even if we relied solely on petitioner’s
testimony, we would nonetheless find that petitioner did not have
custody of Amanda for a portion of the year greater than that of
Ms. Macera.
Petitioner's situation falls squarely within the general
rule that the parent with custody of a child for the greater part
of the year is treated as having provided over half of that
child's support for the year. Petitioner’s testimony proves that
he had custody of Amanda for a period of time shorter than that
of Ms. Macera. Furthermore, Ms. Macera’s testimony that she had
custody of Amanda for the entire year remains uncontroverted.
Consequently, we find that petitioner did not have custody of
Amanda for the greater portion of the calendar year 1998.
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Accordingly, we sustain respondent's determination that
petitioner is not entitled to a dependency exemption deduction
for Amanda in 1998.
2. Head of Household Filing Status
Respondent determined petitioner’s filing status to be
single rather than head of household for 1998 because Amanda did
not reside with petitioner for more than one-half of the year.
Section 1(b) imposes a special tax rate on individuals
filing as head of household. As relevant herein, head of
household is defined in section 2(b) as an unmarried individual
who maintains his home as the principal place of abode for a son
or daughter for more than half of the taxable year.
Petitioner has not demonstrated that he maintained such a
household. Petitioner’s own testimony indicated that he failed
to maintain a principal place of abode for Amanda for more than
one-half of 1998: “From January 1st until [the middle of] June
1998." To qualify, petitioner needed to prove, at a minimum,
that he provided the principal place of abode for Amanda from
January 1 until July 2, 1998. He testified further that Amanda
did not stay at his house more than half of the week during that
period. He acknowledged that during the periods of the year
where Amanda did not reside at his abode, she stayed with Ms.
Macera. Furthermore, petitioner failed to present any evidence
in addition to his own testimony regarding his entitlement to
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head of household filing status. Petitioner might have
corroborated his testimony, but he failed to do so.
The evidence supplied by petitioner fails to establish that
he provided the principal place of abode for Amanda for more than
one-half of the year in issue. Moreover, petitioner offered no
evidence to show that he paid more than one-half the cost of
maintaining a household. See sec. 2(b)(1). We thus hold that
petitioner is not entitled to head of household filing status.
3. Child Tax Credit
Respondent determined that petitioner was unable to claim
the child tax credit on his 1998 return because he was unable to
substantiate that Amanda was a “qualifying child” as defined in
section 151.
In the taxable year 1998, for the first time, taxpayers with
one or more qualifying children were able to claim a tax credit
of $400 for each qualifying child. Sec. 24(a). Section 24(c)(1)
defines a “qualifying child” as any individual if:
(A) the taxpayer is allowed a deduction under section
151 with respect to such individual for the taxable year,
(B) such individual has not attained the age of 17 as
of the close of the calendar year in which the taxable
year of the taxpayer begins, and
(C) such individual bears a relationship to the
taxpayer described in section 32(c)(3)(B). [Emphasis
added.]
The plain language of section 24 establishes a three-pronged test
to determine whether a taxpayer has a qualifying child. In
effect, if one of the qualifications is not met, the claimed
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child tax credit must be disallowed. The first element of the
three-pronged test requires that to qualify for the child tax
credit, a taxpayer must have been allowed a deduction for that
child under section 151. Sec. 24(c)(1)(A).
Respondent determined that petitioner was not entitled to a
section 151 dependency exemption deduction for Amanda in 1998.
We have previously held that respondent’s determination regarding
the section 151 deduction was valid. That holding is dispositive
of this issue, and, as a result, we sustain respondent’s
determination regarding the section 24 child tax credit and hold,
because of the plain language of the statute, that petitioner is
not eligible to claim the child tax credit.
Reviewed and adopted as the report of the Small Tax Case
Division.
To reflect the foregoing,
Decision will be entered
for respondent.