T.C. Summary Opinion 2003-102
UNITED STATES TAX COURT
MENACE ST. HILAIRE, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 776-02S. Filed July 24, 2003.
Menace St. Hilaire, pro se.
Monica J. Miller, for respondent.
POWELL, Special Trial Judge: This case was heard pursuant
to the provisions of section 74631 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.
1
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 of $2,288 in petitioner’s
2000 Federal income tax. The issues are whether petitioner is
entitled to (1) a dependency exemption deduction for his minor
son, (2) a child care credit under section 21 for his son, (3) a
child tax credit (CTC) under section 24 for his son, (4) an
earned income credit (EIC) for his son, and (5) head of household
filing status. Petitioner resided in Orlando, Florida, at the
time the petition was filed.
The facts may be summarized as follows. Petitioner and his
wife, Camelite, were married in 1992. They have three children
including a son, Mackcande. Mackcande was 7 years old in 2000.
During 1998 petitioner and his wife lived together, and they
filed a joint Federal income tax return for that year.
Petitioner’s testimony at to where they lived at that time is
contradictory.
In July 1999, petitioner and his son allegedly rented one
room in an apartment that his wife owned at 421 Jernigan Avenue,
Orlando, Florida. The remainder of the apartment was rented to
another family. Petitioner’s wife and the two other children
allegedly lived at 5394 Botany Court in Orlando. Mackcande’s
school records and Camelite’s driver’s license and motor vehicle
registration, however, show that she lived at 421 Jernigan
Avenue. Although, again, petitioner’s testimony is unclear, as
we understand, Camelite prepared meals for petitioner and
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Mackcande, and at night they returned to 421 Jernigan Avenue to
sleep. Petitioner paid for most of the expenses of maintaining
the residence at 5394 Botany Court. Petitioner and Camelite were
not legally separated pursuant to a decree of divorce or legal
separation.
In preparing his 2000 Federal income tax return, petitioner
claimed, with respect to Mackcande, a dependency exemption
deduction, an EIC, a child care credit based on amounts he
allegedly paid to Camelite for taking care of Mackcande, a CTC,
and used the head of household filing status. Respondent
disallowed the dependency exemption deduction, the EIC, the child
care credit, and the CTC. Respondent also determined that
petitioner’s proper filing status was married filing separately.
Petitioner testified that Camelite would not file a joint return
because she would not get a tax refund.
Dependency Exemption Deduction
Petitioner argues that he is entitled to claim a dependency
exemption deduction with respect to Mackcande. Sections 151 and
152 provide that a taxpayer is entitled to deduct an exemption
for a minor dependent if the taxpayer provides more than half of
the support for the minor dependent. A son of a taxpayer is
included in the definition of a dependent. Sec. 152(a)(1). The
sole issue with regard to the dependency exemption deduction
claimed by petitioner is whether petitioner has established that
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he provided more than half of the support for Mackcande. It is
unclear whether respondent still contends that petitioner is not
entitled to the dependency exemption deduction; we are satisfied,
however, that petitioner provided more than half of the support
for Mackcande. Accordingly, petitioner is entitled to a
dependency exemption deduction for Mackcande.
CTC
Section 24 provides a CTC for a qualifying child. A
qualifying child includes an individual, under the age of 17, for
whom the taxpayer is allowed to claim a deduction under section
151 and who bears a relationship to the taxpayer as described in
section 32(c)(3)(B). Sec. 24(c)(1). Petitioner claimed the CTC
for Mackcande as a qualifying child. Respondent agrees that
Mackcande is a qualifying child if petitioner can claim a
dependency exemption deduction for him under section 151. As
discussed above, petitioner is entitled to claim Mackcande as a
dependent and, therefore, is also entitled to a CTC under section
24.
Child Care Credit
Section 21 provides for a credit for a percentage of the
expenses for the care of a child under age 13 paid by an
individual to enable the individual to be gainfully employed.
Section 21(e)(2) provides that if an individual is married at the
end of the taxable year, the individual and his spouse must file
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a joint return in order to be entitled to the credit. “An
individual legally separated from his spouse under a decree of
divorce or of separate maintenance shall not be considered as
married.” Sec. 21(e)(3). Putting aside the fact that petitioner
did not substantiate any child care expenses, for the reasons
stated below, we hold that petitioner was married during the
taxable year 2000, did not file a joint return with his wife,
and, accordingly, is not entitled to claim a child care credit.
EIC
Section 32(a) generally provides eligible individuals with
an EIC against their income tax liability. An “eligible
individual” is defined as any individual who has a “qualifying
child”. Sec. 32(c)(1)(A)(i). A qualifying child includes a son
of the taxpayer, sec. 32(c)(3)(B)(i)(I), who has the “same
principal place of abode as the taxpayer for more than one-half
of such taxable year”, sec. 32(c)(3)(A)(ii). Respondent concedes
that petitioner satisfies these requirements. Section 32(d)
provides, however, that: “In the case of an individual who is
married (within the meaning of section 7703), this section shall
apply only if a joint return is filed for the taxable year under
section 6013.” Again, as discussed below, we find that
petitioner was married during the taxable year 2000, and, since
he and his wife did not file a joint return, petitioner is not
entitled to claim an EIC.
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Head of Household Filing Status
Petitioner claims that he maintained, as his household, the
principal place of abode of Mackcande, and, therefore, is
entitled to use the head of household filing status. Section
2(b) provides the requirements for head of household filing
status. To qualify as a head of a household a taxpayer must be
unmarried at the end of the taxable year. Sec. 2(b)(1). For the
reasons discussed below, we find that petitioner was married at
the end of the taxable year and is not entitled to use the head
of household filing status.
Petitioner’s Marital Status
Petitioner’s eligibility to claim the child care credit,
EIC, and head of household filing status depends on whether he is
treated as being unmarried. Section 7703(a) provides that an
individual’s marital status shall be determined at the end of the
taxable year and “an individual legally separated from his spouse
under a decree of divorce or of separate maintenance shall not be
considered as married.” Sec. 7703(a)(2). Petitioner does not
meet this requirement. Section 7703(b) provides, in pertinent
part, that if
(1) an individual who is married * * * and who
files a separate return maintains as his home a
household which constitutes for more than one-half of
the taxable year the principal place of abode of a
child * * * with respect to whom such individual is
entitled to a deduction for the taxable year under
section 151 * * *,
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(2) such individual furnishes over one-half of the
cost of maintaining such household during the taxable
year, and
(3) during the last 6 months of the taxable year,
such individual’s spouse is not a member of such
household,
such individual shall not be considered as married.
These requirements are stated in the conjunctive, and the
requirements of each paragraph must be satisfied. We are willing
to assume, but do not decide, that petitioner satisfies the
requirements of paragraphs (1) and (2). We find, however, that
petitioner’s wife was a member of his household.2 Regardless of
what the sleeping arrangements may have been and where the
household was, petitioner’s wife, Camelite, was very much a part
of his household. By his own testimony, petitioner paid
virtually all of the expenses for his family. Camelite prepared
meals for the family, and, it appears to us, shared with
petitioner the raising of all three children. We conclude that
she and petitioner shared the same household.
We have seen an increasing number of cases where there
have been alleged convoluted living arrangements that have no
discernable substance except for attempts to take advantage of
tax deductions and credits. Often this results from advice given
by tax return preparers who know better. This is a dangerous
2
Sec. 7491 dealing with the burden of proof has no application
to this case because petitioner has not satisfied the
requirements of sec. 7491(a).
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game, and we urge such taxpayers and their return preparers to be
more circumspect. Not only do the taxpayers end up paying
interest for the current year, they may be subject to penalties
or the denial of otherwise allowable credits in future years.
See sec. 32(k).
Reviewed and adopted as the report of the Small Tax Case
Division.
Decision will be entered
under Rule 155.