T.C. Summary Opinion 2002-142
UNITED STATES TAX COURT
JOSE ANTONIO RIOS, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 8302-01S. Filed November 1, 2002.
Jose Antonio Rios, pro se.
Travis Vance III, 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, and all Rule
references are to the Tax Court Rules of Practice and Procedure.
The decision to be entered is not reviewable by any other court,
and this opinion should not be cited as authority.
- 2 -
Respondent determined a deficiency in petitioner's Federal
income tax for 1998 of $1,610. After concessions,1 the issues
that remain for decision are: (1) Whether petitioner is entitled
to claim an additional dependency exemption deduction; (2)
whether petitioner is entitled to claim an additional child tax
credit; and (3) whether petitioner qualifies for head of
household filing status.
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 Athens, Georgia.
Background
Petitioner and Terri Butler Chandler were never married.
Mrs. Chandler is Grant J. Butler's mother. On May 9, 1994, the
Superior Court of Athens-Clarke County, Georgia, adjudged that
petitioner is Grant's father and ordered petitioner to pay
monthly child support of $500, provide major-medical insurance
for Grant, and pay $17,000 in past due child support at a rate of
12-percent interest. Petitioner began making the $500 monthly
child-support payments. During 1998, petitioner paid $15,386
1
In the notice of deficiency, respondent determined that
petitioner was not entitled to deductions for two dependency
exemptions, two child tax credits, and head of household filing
status. During the appeal process, respondent conceded that
petitioner is entitled to deduct an amount for one dependency
exemption and claim one child tax credit.
- 3 -
towards the child-support arrearage. Petitioner is appealing the
superior court's decision. For purposes of this case, however,
the Court assumes that petitioner is Grant's biological father.
Petitioner timely filed his 1998 Federal income tax return
as head of household and reported income of $44,417. Petitioner
claimed a dependency exemption deduction and a child tax credit,
naming Grant as his "qualifying child". Respondent issued a
notice of deficiency determining that petitioner is 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
Deductions are a matter of legislative grace, and taxpayers
must maintain adequate records to substantiate the amounts of any
deductions or credits claimed. Sec. 6001; INDOPCO, Inc. v.
Commissioner, 503 U.S. 79, 84 (1992); sec. 1.6001-1(a), Income
Tax Regs. The Court decides this case without regard to the
burden of proof. Accordingly, the Court need not decide whether
current section 7491(a)(1) is applicable in this case. See
Higbee v. Commissioner, 116 T.C. 438 (2001).
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 to include a son or daughter of the
- 4 -
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) provides a special rule in the case of a
child of parents who lived apart at all times during the last 6
months of the calendar year. Section 152(e)(1) provides that, if
the child receives over half of his support from his parents and
he is in the custody of one or both of his parents for more than
half of the year, then the child is treated as receiving over
half of his support from the custodial parent. In the case of
the remarriage of a parent, such as Mrs. Chandler, support of a
child received from the parent's new spouse is treated as
received from the parent. Sec. 152(e)(5).
Section 152(e)(1)(B) provides that the custodial parent is
the parent who had custody of the child for the greater portion
of the calendar year. Petitioner testified that he has not seen
Grant for 8 years and that Grant did not live with him at any
time during 1998. Because Mrs. Chandler had custody of Grant for
the greater portion of 1998, she is the custodial parent. See
sec. 152(e)(1)(B).
Pursuant to section 152(e)(2), the child is treated as
receiving over half of his or her support from the noncustodial
parent only if the custodial parent signs a written declaration
- 5 -
that the custodial parent will not claim the child as a dependent
and the noncustodial parent attaches the declaration to the
noncustodial parent's return. The declaration required by
section 152(e)(2)(A) must be made either on Form 8332, Release of
Claim to Exemption for Child of Divorced or Separated Parents, or
on a statement conforming to the substance of that form. Sec.
152(e)(2); Miller v. Commissioner, 114 T.C. 184, 189 (2000).
In the present case, Mrs. Chandler, as the custodial parent,
did not sign Form 8332 or any written declaration or statement
agreeing not to claim an exemption for Grant, 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 a deduction for a dependency exemption for Grant
for 1998. See sec. 152(e)(1); Miller v. Commissioner, supra.2
2. Child Tax Credit
Respondent determined that petitioner is not entitled to
claim the child tax credit on his 1998 return because he is
2
The Court notes that even if it was determined that
petitioner is not Grant's father, the outcome of this case would
not differ. In that case, petitioner would not be entitled to a
dependency exemption deduction for Grant because in 1998 Grant's
principal place of abode was not petitioner's home and Grant was
not a member of petitioner's household. Sec. 152(a)(9).
- 6 -
unable to substantiate that Grant was a "qualifying child" as
defined in section 151.
For the taxable year 1998, taxpayers are allowed 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
child tax credit must be disallowed. The first element of the
three-pronged test requires that a taxpayer must have been
allowed a deduction for that child under section 151. Sec.
24(c)(1)(A).
Respondent determined that petitioner is not entitled to a
section 151 dependency exemption deduction for Grant for 1998.
The Court has held that respondent's determination regarding the
section 151 deduction is valid. That holding is dispositive of
this issue, and, as a result, the Court sustains respondent's
determination regarding the section 24 child tax credit and
- 7 -
holds, because of the plain language of the statute, that
petitioner is not eligible to claim the child tax credit.
3. Head of Household Filing Status
Respondent determined petitioner's filing status to be
single rather than head of household for 1998 because Grant 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, section 2(b)
defines a "head of household" as an unmarried individual who
maintains as his home a household that constitutes 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. The parties agree that Mrs. Chandler is Grant's full-
time custodian, and in 1998 petitioner and Mrs. Chandler lived in
separate residences. As previously stated, petitioner had not
seen Grant for 8 years and Grant did not live with him at any
time during 1998.
The evidence petitioner presented fails to establish that he
provided the principal place of abode for Grant 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). The Court thus holds
that petitioner is not entitled to head of household filing
status.
- 8 -
Reviewed and adopted as the report of the Small Tax Case
Division.
Decision will be entered
under Rule 155.