T.C. Summary Opinion 2004-84
UNITED STATES TAX COURT
DERRICK ELKINS, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 6262-03S. Filed June 24, 2004.
Derrick Elkins, pro se.
Amy Dyar Seals, for respondent.
PANUTHOS, Chief 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 years in issue, and all Rule
references are to the Tax Court Rules of Practice and Procedure.
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Respondent determined deficiencies in petitioner’s Federal
income taxes of $5,801 for the 1999 taxable year and $4,039 for
the 2000 taxable year.
After concessions by respondent,1 the issues for decision
are: (1) Whether petitioner is entitled to dependency exemption
deductions for 1999 and 2000; (2) whether petitioner is entitled
to head-of-household filing status for 1999 and 2000;2 (3)
whether petitioner is entitled to child tax credits for 1999 and
2000; (4) whether petitioner is entitled to a credit for child
and dependent care expenses of $400 for 1999; and (5) whether
petitioner is entitled to charitable contribution deductions of
$3,654 for 1999 and $5,002 for 2000.3
Some of the facts have been stipulated, and they are so
found. The stipulation of facts and the attached exhibits are
incorporated herein by this reference. At the time the petition
was filed, petitioner resided in Charlotte, North Carolina.
1
Respondent concedes that, of the $7,447 claimed by
petitioner for the 1999 taxable year, petitioner is entitled to a
charitable contribution deduction of $3,793. Respondent further
concedes that petitioner is entitled to a charitable contribution
deduction of $200 for the 2000 taxable year.
2
Respondent determined that petitioner was entitled to a
filing status of married filing separately for the 1999 and 2000
taxable years.
3
Respondent determined that petitioner was entitled to the
standard deduction for 1999 and 2000, since after respondent’s
disallowance of charitable contribution deductions in the notice
of deficiency, the standard deduction was greater than the
claimed itemized deductions for the corresponding taxable year.
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Petitioner filed Federal income tax returns for taxable
years 1999 and 2000. In each return, petitioner filed as a “head
of household” and claimed dependency exemption deductions. For
1999, petitioner claimed dependency exemption deductions for
Jaleshia Stackhouse (Jaleshia), Caletta Pressley (Ms. Pressley),
and Tyra Postles (Tyra).4 Jaleshia is petitioner’s daughter, who
was 9 years old in 1999 and who lived with petitioner during the
years in issue. Petitioner described Ms. Pressley as “a friend”,
who was 32 years old in 1999 and who, along with Tyra, moved in
with petitioner for about 9 months, starting after February 1999.
Ms. Pressley is the biological mother of Tyra, who was born
February 15, 1999.
For 2000, petitioner claimed dependency exemption deductions
for Sabrina Stackhouse (Ms. Stackhouse) and Jaleshia. Ms.
Stackhouse, who was 31 years old in 2000, is the biological
mother of Jaleshia. She moved in with petitioner sometime after
March 2000. Petitioner testified that he was not married to Ms.
Stackhouse during the relevant taxable years.
4
According to respondent, no one else, other than
petitioner, claimed the dependency exemption deductions with
respect to Jaleisha, Ms. Pressley, or Tyra for the years in
issue. Moreover, none of them filed returns for the years in
issue.
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Petitioner also claimed the following deductions and
credits:
Deduction or Credit 1999 2000
Child tax credit $1,000 $500
Credit for child and
dependent care expenses 480 ---
Charitable contribution deduction 7,447 5,202
1. Burden of Proof
A taxpayer is generally required to substantiate deductions
by keeping books and records sufficient to establish the amount
of the deductions. Sec. 6001; sec. 1.6001-1(a), Income Tax Regs.
Deductions are a matter of legislative grace, and generally the
taxpayer bears the burden of proving entitlement to any deduction
claimed. Rule 142(a); INDOPCO, Inc. v. Commissioner, 503 U.S.
79, 84 (1992). The burden of proof has not shifted to respondent
pursuant to section 7491(a). While examination of the tax
returns in issue commenced after July 22, 1998, petitioner has
not satisfied any of the criteria of section 7491(a)(2)(A) and
(B). Indeed, we found petitioner’s testimony to be questionable
or inconsistent at times.
2. Dependency Exemption Deductions
The first issue for decision is whether petitioner is
entitled to the claimed dependency exemption deductions for 1999
and 2000. Section 151(c) allows a taxpayer to deduct an
exemption amount for each dependent, as defined in section 152.
A dependent is defined as an individual, who is either a U.S.
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citizen, national, or resident of the United States, over half of
whose support is received from the taxpayer. See sec. 152(a) and
(b)(3). In order to qualify as a dependent, an individual must
also be related to the taxpayer in one of the ways enumerated in
section 152(a)(1) through (8), or be an unrelated individual who
lives with the taxpayer and is a member of the taxpayer’s
household throughout the entire taxable year of the taxpayer.
See sec. 152(a)(9); Trowbridge v. Commissioner, 268 F.2d 208 (9th
Cir. 1959), affg. 30 T.C. 879 (1958); McMillan v. Commissioner,
31 T.C. 1143, 1145-1146 (1959); Turay v. Commissioner, T.C. Memo.
1999-315, affd. per order (D.C. Cir., May 23, 2000); sec. 1.152-
1(b), Income Tax Regs.
In the present case, petitioner claimed dependency exemption
deductions with respect to four individuals during the years in
issue. Of these four, only Jaleshia was related to petitioner as
his daughter. See sec. 152(a)(1). For the remaining three
individuals who were not related to petitioner, Ms. Pressley and
Tyra did not live with petitioner during the entire taxable year
of 1999, and Ms. Stackhouse did not live with petitioner during
the entire taxable year of 2000. Accordingly, they do not
qualify as dependents within the meaning of section 152(a)(9).
Section 152(e)(1) provides a special support test in which
the custodial parent is entitled to the dependency exemption
deduction “if a child (as defined in section 151(c)(3)) receives
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over half of his support during the calendar year from his
parents * * * who live apart at all times during the last 6
months of the calendar year”. Sec. 152(e)(1)(A)(iii). There is
no requirement in the statute that parents have married each
other before the special support test of section 152(e)(1) can
apply. King v. Commissioner, 121 T.C. 245, 250 (2003). In 1999,
petitioner had custody of his daughter Jaleisha, and petitioner
and Ms. Stackhouse lived apart at all times. Petitioner thus
satisfies the special support test for Jaleisha for 1999, and he
is entitled to the dependency exemption deduction for Jaleisha
for that taxable year. For 2000, the special support test under
section 152(e)(1)(A)(iii) does not apply because petitioner and
Ms. Stackhouse lived together during the last 6 months of the
calendar year. Petitioner did not provide any information as to
the total amount of support provided to Jaleisha from all sources
for 2000. The total amount of support for each of the claimed
dependents furnished by all sources during the year in issue must
be established by competent evidence. Blanco v. Commissioner, 56
T.C. 512, 514 (1971). If the total amount of support is not
shown and cannot be reasonably inferred from the competent
evidence available, it is impossible to conclude that petitioner
furnished more than one-half. See id. at 514-515.
We sustain respondent’s determination that petitioner is not
entitled to dependency exemption deductions for Ms. Pressley,
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Tyra, and Ms. Stackhouse for the 1999 and 2000 taxable years and
for Jaleisha for the 2000 taxable year. However, we conclude
that, under the special support test of section
152(e)(1)(A)(iii), petitioner is entitled to the dependency
exemption deduction for Jaleisha for the 1999 taxable year.
3. Filing Status
To qualify as a head of household, a taxpayer must satisfy
the requirements of section 2(b). Under section 2(b), a taxpayer
shall be considered a head of household if he or she is not
married at the close of the taxable year, is not a surviving
spouse, and, among other choices, maintains as his or her home a
household which constitutes for more than half of such taxable
year the principal place of abode, as a member of such household,
of either an unmarried daughter of the taxpayer or any other
person who is a dependent of the taxpayer if the taxpayer is
entitled to a deduction for the taxable year for such person
under section 151. Sec. 2(b)(1)(A); sec. 1.2-2(b)(3)(ii),
(c)(1), Income Tax Regs. A taxpayer shall be considered as
maintaining a household only if he or she pays more than one-half
of the cost thereof for the taxable year. Sec. 1.2-2(d), Income
Tax Regs.
In the present case, respondent determined that petitioner
was not entitled to head-of-household filing status for 1999 and
2000. We have sustained respondent’s determination that Ms.
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Pressley, Tyra, and Ms. Stackhouse were not petitioner’s
dependents. Moreover, although Jaleisha lived with petitioner
for more than one-half of the year during 1999 and 2000,
petitioner has not provided any evidence that he paid more than
one-half of the cost of maintaining a household during the
relevant taxable years.5 Accordingly, petitioner is not entitled
to head-of-household filing status for 1999 and 2000, and to that
extent, we sustain respondent’s determination.
Respondent also determined that petitioner is entitled to a
filing status of married filing separately for the taxable years
in issue. However, respondent’s determination is inconsistent
with petitioner’s testimony that he was not married to either Ms.
Stackhouse or Ms. Pressley. And while the record seems to
indicate that petitioner was single during the 1999 and 2000
taxable years, respondent did not argue at the time of trial that
petitioner’s filing status was married filing separately. We
therefore conclude that petitioner is entitled to the filing
status of single for the years in issue.
4. Child Tax Credit
Section 24(a) provides for a “credit against the tax * * *
for the taxable year with respect to each qualifying child of the
5
Other individuals who lived with petitioner, such as Ms.
Pressley and Ms. Stackhouse, could have paid more than one-half
of the cost of maintaining the household during the years in
issue.
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taxpayer”. The term “qualifying child” means any individual if
three tests are satisfied. Sec. 24(c)(1).
In the present case, Tyra is not a qualifying child because
petitioner is not allowed a deduction under section 151 with
respect to her for 1999. See sec. 24(c)(1)(A). With respect to
Jaleisha, however, we have concluded that petitioner is entitled
to a dependency exemption deduction for her for 1999, but not for
2000. Moreover, Jaleisha satisfies the relationship test and age
test for 1999 and 2000. See sec. 24(c)(1)(B) and (C).
Accordingly, she is a qualifying child for the 1999 taxable year,
and petitioner is entitled to the child tax credit for Jaleisha
for 1999. To that extent, we do not sustain respondent’s
determination on this issue.
5. Credit for Child and Dependent Care Expenses
Section 21(a)(1) provides for a credit against tax in the
case of “an individual who maintains a household which includes
as a member one or more qualifying individuals” and in an amount
equal to the applicable percentage of the “employment-related
expenses” paid by such individual during the taxable year. The
term “qualifying individual” means, among other things, a
dependent of the taxpayer who is under the age of 13 and with
respect to whom the taxpayer is entitled to a deduction under
section 151(c). Sec. 21(b)(1)(A). The term “employment-related
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expenses” includes expenses for certain dependent care centers.
Sec. 21(b)(2)(A), (C), (D).
In the present case, petitioner claimed the credit under
section 21(a) with respect to Jaleshia for 1999. We have
concluded that petitioner was entitled to dependency exemption
deduction for Jaleisha for that taxable year, and thus, Jaleshia
is a qualifying individual. However, petitioner could not and
did not substantiate that he incurred any employment-related
expenses within the meaning of section 21(b)(2), and evidence in
the record suggests that the dependent care center was no longer
in operation during 1999. Accordingly, petitioner is not
entitled to the credit for child and dependent care expenses for
1999. We sustain respondent’s determination on this issue.
6. Charitable Contribution Deductions
Section 170(a)(1) allows as a deduction a charitable
contribution payment of which is made within the taxable year. A
charitable contribution includes a contribution or gift to or for
the use of a corporation, trust, community chest, fund, or
foundation organized and operated exclusively for religious,
charitable, scientific, literary, or educational purposes. Sec.
170(c)(2)(B).
If a taxpayer makes a charitable contribution in cash or by
check, the taxpayer shall maintain for each contribution either a
canceled check, a receipt or letter from the donee charitable
organization, or other reliable written records showing the name
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of the donee and the date and amount of the contribution.
Cavalaris v. Commissioner, T.C. Memo. 1996-308; sec. 1.170A-
13(a)(1), Income Tax Regs. If the contribution is made in
property other than money, the taxpayer must also maintain a
receipt or letter from the donee showing the name of the donee,
the date and location of the contribution, and a description of
the property. Sec. 1.170A-13(b)(1), Income Tax Regs. In the
case where a receipt would be impractical to obtain, the taxpayer
shall maintain reliable written records with respect to each item
of donated property. Id. A deduction for a contribution of $250
or more will not be allowed unless the taxpayer substantiates the
contribution with a contemporaneous written acknowledgment from
the donee organization. Sec. 1.170A-13(f)(1), Income Tax Regs.
Petitioner presented two receipts from the Salvation Army,
one for 1999 and another for 2000. While neither of these
receipts lists the value of the donated items, respondent
concedes that petitioner is entitled to a charitable contribution
of $200 for each receipt.6 Petitioner, however, testified that
he donated more items than those listed on such receipts.
6
As we indicated earlier, respondent concedes that
petitioner is entitled to charitable contribution deductions of
$3,793 for the 1999 taxable year and $200 for the 2000 taxable
year. The $3,793 concession for the 1999 taxable year is based
upon (1) one of the two receipts from the Salvation Army, (2) a
$68 donation to the Army/Navy Store, and (3) a $3,525 donation of
an automobile to the National Kidney Foundation. The $200
concession for the 2000 taxable year is based upon the other
receipt from the Salvation Army.
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Petitioner also testified that he contributed money to his
church, but did not provide any details to support these
contributions. We are not required to accept petitioner’s self-
serving testimony. Patterson v. Commissioner, T.C. Memo. 1996-
146. Accordingly, respondent is sustained on this issue to the
extent not conceded by him.
Reviewed and adopted as the report of the Small Tax Case
Division.
To reflect the foregoing and respondent’s concessions,
Decision will be entered
under Rule 155.