T.C. Summary Opinion 2004-38
UNITED STATES TAX COURT
MATTHEW D. GILMORE, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 15518-03S. Filed March 25, 2004.
Matthew D. Gilmore, pro se.
Albert G. Kobylarz, Jr., for respondent.
PANUTHOS, Chief 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 in petitioner’s Federal
income tax of $4,088 for the taxable year 2002. The issues for
decision are: (1) Whether petitioner is entitled to dependency
exemption deductions for Ileane Gilmore2 and Janiah Gilmore, (2)
whether petitioner is entitled to head-of-household filing
status, (3) whether petitioner is entitled to an earned income
credit, and (4) whether petitioner is entitled to child tax
credits.
Background
Some of the facts have been stipulated, and they are so
found. The stipulation of facts and attached exhibits are
incorporated herein by this reference. At the time of filing the
petition, petitioner resided in Elizabeth, New Jersey.
During the year in issue, petitioner was 19 years old.
Petitioner lived in a three-bedroom apartment with his mother
Chanel Gilmore, and three siblings, Chantel, Sonora, and Tim.
Chantel had two children, Ileane (born August 23, 1998) and
Janiah (born February 9, 2002), who also lived in the household.
During 2002 petitioner worked for Friendly’s and Ruby
Tuesday and earned a total of approximately $9,359. Petitioner
also received unemployment compensation from the New Jersey
2
We note that the tax return listed the child as Ileane
Gilmore, but the child’s birth certificate listed her as Ileane
Celine Robbins and that Chantel Gilmore is reflected as the
mother.
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Department of Labor in the amount of $1,694. Petitioner’s mother
worked full time during the year in issue and received minimum
wage from a local hotel. Chantel did not work during the year in
issue, however she did receive some public assistance.
The record is incomplete as to the expenses incurred and
paid by the household. The expenses for support of the household
were shared between petitioner’s mother, petitioner, and Chantel.
The amount of the expenses relating to support of Ileane and
Janiah is unclear as is the allocation of support of the
household between petitioner’s mother, petitioner, and Chantel.
Petitioner did, however, treat Ileane and Janiah as his own
children in providing some support and caretaking.
On his 2002 Federal income tax return petitioner reported
wage income of $9,359 and unemployment compensation of $1,694.
Petitioner claimed dependency exemption deductions for Ileane and
Janiah, an earned income credit, and child tax credits, and
computed his tax using head-of-household status rates. In the
notice of deficiency, respondent disallowed the claimed
dependency exemption deductions, the earned income and child tax
credits, and adjusted the filing status to single.
Discussion
The burden of proof is on petitioner. Section 7491 may
shift the burden of proof to the Commissioner under certain
circumstances. Petitioner has not established that he complied
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with the requirements of section 7491(a)(2)(A) and (B) to
substantiate items, maintain required records, and fully
cooperate with respondent’s reasonable requests. Accordingly,
the burden does not shift.
1. Dependency Exemption Deductions
A taxpayer may be entitled to claim as a deduction an
exemption amount for each of his or her dependents, over half of
whose support is provided by the taxpayer. Secs. 151(c)(1),
152(a). A dependent includes a son or daughter of a sister of
the taxpayer. Sec. 152(a)(6).
As to the support test, a taxpayer generally must provide
more than half of a claimed dependent’s support for the calendar
year in which the taxable year of the taxpayer begins. Sec.
152(a). In order to satisfy this test, a taxpayer must establish
the total support expended on behalf of the claimed dependents
from all sources for the year and demonstrate that he provided
more than half of this amount. See Archer v. Commissioner, 73
T.C. 963, 967 (1980); Blanco v. Commissioner, 56 T.C. 512, 514-
515 (1971).
There is an absence of evidence relating to the total amount
of support as well as petitioner’s share of support. While there
is some general information as to purchase of groceries, payment
of rent, and payments of other household expenses by petitioner,
we cannot conclude from this meager record the amount of the
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total support provided to Ileane and Janiah nor the amount of
support provided by petitioner. Respondent is sustained on this
issue.
2. Head of Household
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 for more than one-half of
the taxable year constitutes the principal place of abode of a
person who is a dependent of the taxpayer, if the taxpayer is
entitled to a deduction for the taxable year for that dependent
under section 151.
The Court has sustained respondent’s determination
disallowing the claimed dependency exemption deductions, and, as
a result, petitioner is not entitled to head-of-household filing
status for 2002. Thus, respondent’s determination that
petitioner is not entitled to head-of-household filing status is
sustained.
3. Earned Income Credit
Section 32(a) provides for an earned income credit in the
case of an eligible individual. Section 32(c)(1)(A)(i), in
pertinent part, defines an “eligible individual” as any
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individual who has a qualifying child for the taxable year.3 A
qualifying child is one who satisfies a relationship test, a
residency test, and an age test. Sec. 32(c)(3). Ileane and
Janiah clearly satisfy the residency test and the age test. We
thus consider whether they satisfy the relationship test.4 For
the tax year in issue, the relationship test under section
32(c)(3) required as follows:
(B). Relationship test.--
(i) In general.--An individual bears a
relationship to the taxpayer described in this
subparagraph if such individual is--
(I) a son, daughter, stepson, or
stepdaughter, or a descendant of any such
individual,
(II) a brother, sister, stepbrother, or
stepsister, or a descendant of any such
individual, who the taxpayer cares for as the
taxpayer’s own child, or
It is clear that Ileane and Janiah are petitioner’s nieces,
the descendants of his sister. The remaining part of the
relationship test under section 32(c)(3)(B)(i)(II) is that the
3
Sec. 32(c)(1)(C) sets forth the conditions when an
individual shall be treated as the qualifying child of the
taxpayer where two or more taxpayers claim an individual as a
qualifying child. Respondent has not argued that Ileane or
Janiah was a qualifying child to someone other than petitioner,
nor is there any evidence in this record upon which the Court
could make such a finding.
4
Respondent incorrectly referred to sec. 32(c) as in
effect for years prior to 2002, asserting that petitioner did not
satisfy the relationship test.
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taxpayer cares for the individual as his own child. Thus, we
must also decide whether petitioner cared for Ileane and Janiah
as his own children. In this connection, Ileane and Janiah lived
with petitioner for the entire year, and petitioner assisted in
support and caretaking of the children. Petitioner, even at the
young age of 19, was the oldest male in the household and
contributed to the household. While the children’s grandmother
worked, it is not entirely clear the extent to which parenting
responsibilities were shared by members of the household. We
conclude, based on the entire record, that petitioner cared for
his nieces as his own children, and thus, the children are
qualifying children for purposes of computation of the earned
income credit under section 32. We find for petitioner on this
issue.
4. Child Tax Credits
We next consider the child tax credits. A taxpayer may be
entitled to a credit against tax with respect to each “qualifying
child”. Sec. 24(a). The plain language of section 24
establishes a three-pronged test to determine whether a taxpayer
has a qualifying child. 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).
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As stated supra, the Court has sustained respondent’s
determination that petitioner is not entitled to dependency
exemption deductions for the children. Thus, petitioner fails
the first prong of the test of section 24. The Court sustains
respondent’s determination regarding the child tax credits under
section 24.
Reviewed and adopted as the report of the Small Tax Case
Division.
Decision will be entered
under Rule 155.