T.C. Summary Opinion 2002-103
UNITED STATES TAX COURT
PHIL E. ANDERSON, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 6039-01S. Filed August 6, 2002.
Phil E. Anderson, pro se.
Richard J. Hassebrock, for respondent.
ARMEN, Special Trial Judge: This case was heard pursuant to
the provisions of section 7463 of the Internal Revenue Code in
effect at the time that the petition was filed.1 The decision to
be entered in this case is not reviewable by any other court, and
this opinion should not be cited as authority.
1
Unless otherwise indicated, all subsequent section
references are to the Internal Revenue Code in effect for 1998,
the taxable year in issue.
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Respondent determined a deficiency in petitioner’s Federal
income tax for the taxable year 1998 in the amount of $4,347.
The issues for decision by the Court are as follows:
(1) Whether petitioner is entitled to deductions for
dependency exemptions for his five children. We hold that he is
not.
(2) Whether petitioner is entitled to a child tax credit and
additional child tax credit. We hold that he is not.
(3) Whether petitioner is entitled to head of household
filing status. We hold that he is not.
(4) Whether petitioner is entitled to an earned income
credit. We hold that he is not.
An adjustment to the amount of petitioner's standard
deduction is a purely mechanical matter, the resolution of which
is dependent on our disposition of the disputed issue regarding
petitioner’s filing status.
Background
This case was deemed to be submitted fully stipulated, and
the facts stipulated are so found.2 Petitioner resided in
2
Petitioner did not appear in court when this case was
called for trial. In contrast, counsel for respondent appeared
and stated that he had been served by petitioner with a Motion to
Withdraw Appeal. Counsel indicated that under these
circumstances, respondent was inclined to move to dismiss the
case for lack of prosecution. However, the Court, after learning
that petitioner had executed a stipulation of facts, intimated
that it would not favorably regard such a motion and proposed
(continued...)
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Canton, Ohio, at the time that his petition was filed with the
Court.
Originally, petitioner and Viola S. Allison (Ms. Allison),
f.k.a. Viola S. Anderson, were married and had five children,
three sons and two daughters. In or about 1995, petitioner and
Ms. Allison were divorced.
At all relevant times, Ms. Allison had legal custody of the
five children and was the residential parent pursuant to the
operative divorce instrument. In contrast, petitioner had
visitation rights and was obliged to pay child support.
For 1998, petitioner and Ms. Allison provided all (or
virtually all) of the support of their five children.3 Moreover,
throughout that year, the children were continuously in the care
of either petitioner or Ms. Allison. However, petitioner had
physical custody of the children for less than half of the year,
and his home was not their principal place of abode for more than
half of the year.
2
(...continued)
instead that respondent execute the stipulation of facts and
submit the case fully stipulated for decision by the Court on the
merits. Respondent then undertook to do so.
3
Like petitioner, both Ms. Allison and her second husband
were employed in 1998. We note that in the case of the
remarriage of a parent, such as Ms. Allison, support of a child
received from the parent’s new spouse is treated as received from
the parent. Sec. 152(e)(5).
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Petitioner timely filed a U.S. Individual Income Tax Return,
Form 1040, for 1998, reporting wages of $26,093 and adjusted
gross income of $22,632. On his return, petitioner designated
his filing status as “head of household”, and he claimed (1)
deductions for dependency exemptions for his five children, (2)
an earned income credit, and (3) a child tax credit (on line 43
of Form 1040) and an additional child tax credit (on line 60 of
Form 1040). Petitioner did not attach to his return Form 8332,
Release of Claim to Exemption for Child of Divorced or Separated
Parents, or any other declaration or statement from Ms. Allison
agreeing not to claim exemptions for any of their five children
on her return for the year in issue. In contrast, petitioner did
attach to his return Form 8812, Additional Child Tax Credit.
In the notice of deficiency, respondent determined that
petitioner’s filing status was “single” rather than “head of
household”. Respondent also determined that petitioner was not
entitled to: (1) Deductions for dependency exemptions, (2) an
earned income credit, or (3) a child tax credit and additional
child tax credit.
In his petition, petitioner admits that he had physical
custody of his children for less than half of the year, but
alleges that he maintained a residence for them and provided over
60 percent of their support.
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Discussion4
A. Deductions for Dependency Exemptions
Section 151(a) authorizes deductions for the exemptions
provided by that section. In particular, section 151(c)(1)
provides an exemption for each of a taxpayer’s dependents as
defined in section 152.
Section 152(a)(1) defines the term “dependent” to include a
taxpayer’s child, provided that more than half of the child’s
support was received from the taxpayer or is treated under
section 152(e) as received from the taxpayer.
In the case of a child of divorced parents, section
152(e)(1) provides as a general rule that the child shall be
treated as receiving over half of his or her support from the
custodial parent. In the event of so-called split or joint
custody, “‘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.” Sec. 1.152-4(b),
Income Tax Regs. Thus, in the present case, because Ms. Allison
had legal custody of the five children throughout 1998 (as well
as physical custody for more than half that year) she was the
custodial parent in 1998, and petitioner was the noncustodial
4
We decide the issues in this case without regard to the
burden of proof. Accordingly, we need not decide whether the
general rule of sec. 7491(a)(1) is applicable in this case. See
Higbee v. Commissioner, 116 T.C. 438 (2001).
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parent.
Section 152(e)(2) provides an exception to the general rule
of section 152(e)(1). Pursuant to that exception, the child
shall be treated as receiving over half of his or her support
from the noncustodial parent if:
(A) 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
(B) the noncustodial parent attaches such written
declaration to the noncustodial parent’s return for the
taxable year beginning during such calendar year.[5]
See sec. 1.152-4T(a), Q&A-3, Temporary Income Tax Regs., 49 Fed.
Reg. 34459 (Aug. 31, 1984).
The declaration required by section 152(e)(2)(A) must be
made on either Form 8332 or on a statement conforming to the
5
A second exception to the general rule of sec. 152(e)(1)
exists for certain pre-1985 instruments. See sec. 152(e)(4).
Pursuant to that exception, a child of divorced parents shall be
treated as receiving over half of his or her support from the
noncustodial parent if:
(i) a qualified pre-1985 instrument between the
parents * * * provides that the noncustodial parent
shall be entitled to any deduction allowable under
section 151 for such child, and
(ii) the noncustodial parent provides at least
$600 for the support of such child during such calendar
year.
In view of the fact that petitioner and Ms. Allison divorced
in or about 1995, this second exception does not apply to the
present case. Sec. 152(e)(4)(B)(i).
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substance of that form. Id.; Miller v. Commissioner, 114 T.C.
184, 189 (2000). “The exemption may be released for a single
year, for a number of specified years (for example, alternate
years), or for all future years, as specified in the
declaration.” Sec. 1.152-4T(a), Q&A-4, Temporary Income Tax
Regs., 49 Fed. Reg. 34459 (Aug. 31, 1984).
In the present case, Ms. Allison, as the custodial parent,
did not sign Form 8332 or any written declaration or statement
agreeing not to claim exemptions for any of the five children,
and no such form, declaration, or statement was attached to
petitioner’s return for the year in issue. It follows,
therefore, that the exception set forth in section 152(e)(2) does
not apply and that the general rule of section 152(e)(1) does
apply. Accordingly, petitioner is not entitled to deductions for
dependency exemptions for any of his five children for 1998.
Sec. 152(e)(1); Miller v. Commissioner, supra.
In view of the foregoing, we sustain respondent’s
determination on this issue.
B. Child Tax Credit and Additional Child Tax Credit
Section 24(a) authorizes a child tax credit with respect to
each “qualifying child” of the taxpayer. Section 24(d)
authorizes an additional child tax credit for families with three
or more “qualifying” children.
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The term “qualifying child” is defined in section 24(c). As
relevant herein, a “qualifying child” means an individual with
respect to whom the taxpayer is allowed a deduction under section
151. Sec. 24(c)(1)(A).
We have already held that petitioner is not entitled to a
deduction under section 151 for a dependency exemption for any of
his children. Accordingly, none of petitioner’s children is a
“qualifying child” within the meaning of section 24(c). It
follows, therefore, that petitioner is not entitled to a child
tax credit under section 24(a) and an additional child tax credit
under section 24(d) in respect of his children.
In view of the foregoing, we sustain respondent’s
determination on this issue.
C. Filing Status
As relevant herein, an individual qualifies as a head of
household if the individual is not married at the close of the
taxable year and maintains as his or her home a household that
constitutes for more than one-half of the taxable year, the
principal place of abode of a son or daughter of the taxpayer.
See sec. 2(b)(1)(A)(i).
Although petitioner may have maintained a residence for his
children, petitioner had physical custody of his children for
less than half of the year, and his residence was not the
principal place of abode of any of his children for more than
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half of the year. It follows, therefore, that petitioner is not
entitled to head of household filing status.
In view of the foregoing, we sustain respondent’s
determination on this issue.
D. Earned Income Credit
In the case of an eligible individual, section 32(a) allows
an earned income credit against the individual's income tax
liability. As relevant herein, an "eligible individual" is
defined as an individual who has a "qualifying child" for the
taxable year.6 Sec. 32(c)(1)(A)(i).
To be a “qualifying child”, an individual must, inter alia,
have the same principal place of abode as the taxpayer for more
than half of the taxable year. Sec. 32(c)(3)(A)(ii). Petitioner
had physical custody of his children for less than half of the
year, and his residence was not the principal place of abode of
any of his children for more than half of the year. It follows,
therefore, that petitioner is not entitled to an earned income
credit.
6
An individual may be eligible for an earned income credit
even if the individual does not have a "qualifying child" for the
taxable year. Sec. 32(c)(1)(A)(ii). However, as relevant
herein, such an individual would be eligible only if the
individual’s adjusted gross income were less than $10,030. In
the present case, petitioner’s adjusted gross income was $22,632;
accordingly, petitioner would not be eligible for an earned
income credit without a “qualifying child”.
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In view of the foregoing, we sustain respondent’s
determination on this issue.
E. Conclusion
Reviewed and adopted as the report of the Small Tax Case
Division.
To give effect to our disposition of the disputed issues,
Decision will be entered
for respondent.