T.C. Summary Opinion 2002-131
UNITED STATES TAX COURT
KARL V. MEIER, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 5212-01S. Filed October 8, 2002.
Karl V. Meier, pro se.
Frank W. Louis, for respondent.
PAJAK, 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. The decision to be
entered is not reviewable by any other court, and this opinion
should not be cited as authority. Unless otherwise indicated,
subsequent section references are to the Internal Revenue Code in
effect for the year in issue, and all Rule references are to the
Tax Court Rules of Practice and Procedure.
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Respondent determined a deficiency in petitioner’s 1999
Federal income tax in the amount of $3,376. This Court must
decide: (1) Whether petitioner is entitled to dependency
exemption deductions for his two children; (2) whether petitioner
is entitled to head of household filing status; and (3) whether
petitioner is entitled to the earned income credit.
Some of the facts in this case have been stipulated and are
so found. Petitioner resided in Hobart, New York, at the time he
filed his petition.
During 1999, Karl V. Meier (petitioner) was employed as a
cook. He reported wages of $7,875 on his 1999 Federal income tax
return.
Petitioner has two children, Kaislyn Meier (Kaislyn) and
Naleah Meier (Naleah), with his former wife Nancy Meier (Ms.
Meier).
On September 7, 1999, petitioner was divorced from Ms.
Meier, by a judgment of divorce from the Supreme Court of the
State of New York, County of Delaware (divorce decree). A
proceeding was held in connection with the divorce and the
proceeding was incorporated into the divorce decree. The divorce
decree provided that: “The parties have agreed to joint physical
custody” of the children. The custody arrangement generally
provided that petitioner and Ms. Meier would alternate custody of
both children on a weekly basis. Special arrangements were
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provided for certain holidays, birthdays, and vacations. The
custody arrangement also provided that petitioner and Ms. Meier
agreed to waive paying each other child support.
On his 1999 Federal income tax return, petitioner claimed
Kaislyn and Naleah as dependents. Petitioner filed as head of
household for the taxable year 1999. He also claimed both
children for purposes of the earned income credit.
Respondent determined that for the taxable year 1999
petitioner was not entitled to claim Kaislyn and Naleah as
dependents, that his filing status was single rather than head of
household, and that he was not entitled to the earned income
credit.
Taxpayers generally bear the burden of proving that the
Commissioner’s determination is incorrect. Rule 142(a); Welch v.
Helvering, 290 U.S. 111 (1933). Section 7491 does not apply in
this case to place the burden of proof on respondent because
petitioner neither alleged that section 7491 was applicable nor
established that he fully complied with the substantiation
requirements of section 7491(a)(2)(A).
Section 151(c) allows a taxpayer to deduct an annual
exemption amount for each dependent, as defined in section 152.
Section 152(a) provides, in pertinent part, that a dependent
includes an individual, such as a son or daughter, over one-half
of whose support in the taxable year was from the taxpayer or is
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treated as received from the taxpayer under section 152(e).
Section 152(e) provides special rules for a child whose
parents are either divorced or who live apart at all times for
the last 6 months of the calendar year. In those situations, the
statute provides that if a child receives over one-half of his or
her support from his or her parents, and if the child is in the
custody of one or both of his or her parents for more than one-
half of the calendar year, then the child is treated for purposes
of section 152(a) as receiving over one-half of his or her
support during the year from the parent having custody for a
greater portion of the calendar year. Sec. 152(e)(1). As is
relevant here, “custody” is determined by the terms of the most
recent decree of divorce or separate maintenance agreement, or
subsequent custody decree. Sec. 1.152-4(b), Income Tax Regs. In
the event of so-called “split” 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.
Petitioner and Ms. Meier generally followed the divorce
decree and split equally the custody of the two children. There
is no question but that petitioner and Ms. Meier provided 100
percent of the support of the two children. However, petitioner
repeatedly was asked by Ms. Meier to keep the children beyond the
allotted time so that he had custody during periods Ms. Meier
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should have had custody. He was asked to care for the children
when doctor or dentist appointments were required or when they
were sick during periods when they should have been in the
custody of Ms. Meier. In essence, petitioner had custody for the
weeks he was to have custody under the decree, plus he had
custody of the children for some of the weeks Ms. Meier was
supposed to take care of them. We are convinced on this record
that petitioner had custody of the children for the greater
portion of 1999. Under section 152(e) and section 1.152-4(b),
Income Tax Regs., the children are treated as having received
over one-half of their support from petitioner. Accordingly, we
hold that petitioner is entitled under sections 151(a) and 152(e)
to claim Kaislyn and Naleah as dependents for 1999.
We next consider whether petitioner is entitled to head of
household filing status for 1999. Respondent determined that
petitioner’s proper filing status for the taxable year at issue
is single.
Section 2(b), in relevant part, defines head of household as
an unmarried taxpayer who maintains as his home a household which
constitutes for more than one-half of such taxable year the
principal place of abode of a person who is an unmarried son or
daughter of the taxpayer. Sec. 2(b)(1)(A)(i). We have found
that petitioner had physical custody of Kaislyn and Naleah for
the greater portion of 1999. Accordingly, we hold that
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petitioner is entitled to head of household filing status for the
taxable year in issue.
Finally, we must consider whether petitioner may claim an
earned income credit under section 32(a)(1) in the amount of
$3,250 for 1999. Respondent disallowed the earned income credit
on the basis that the two children did not reside with petitioner
for more than one-half of 1999. As we have found above, the
children resided with petitioner for more than one-half of 1999.
Accordingly, we hold that petitioner is entitled to the claimed
earned income credit under section 32(a).
Reviewed and adopted as the report of the Small Tax Case
Division.
Decision will be entered
for petitioner.