T.C. Summary Opinion 2004-133
UNITED STATES TAX COURT
LOUIS C. JONES, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 15608-03S. Filed September 27, 2004.
Louis C. Jones, pro se.
Michelle Maniscalco, for respondent.
GOLDBERG, 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 Federal
income tax of $3,025 for the taxable year 2002.
After concessions by both parties, the issues remaining for
decision are: (1) Whether petitioner is entitled to claim a
dependency exemption for his stepson under section 152 for the
taxable year 2002; and (2) whether petitioner is entitled under
section 32(a) to the earned income credit for the taxable year
2002.
Some of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits are
incorporated herein by this reference. Petitioner resided in New
York, New York, on the date the petition was filed in this case.
On February 17, 2003, petitioner filed his 2002 Federal
income tax return. On this return, petitioner reported head-of-
household filing status, claimed a dependency exemption for his
21-year-old stepson, Christopher K. Bernard (Christopher), and
claimed an earned income credit. Respondent issued a notice of
deficiency to petitioner determining a deficiency of $3,025 based
on single-filing status. After issuance of the notice of
deficiency, petitioner filed an amended Federal income tax return
for the year 2002. In the amended Federal income tax return
petitioner changed his filing status to married filing jointly.
Respondent concedes that petitioner is entitled to married filing
jointly as his filing status, thereby allowing petitioner the
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applicable standard deduction of $7,850 for 2002. The amended
joint filing entitles petitioner to two personal exemption
deductions, one for himself and one for his wife. In 2002, the
exemption deduction amount was $3000.
Christopher was born on October 12, 1981, and turned 21
years old during the year in issue. During 2002, Christopher
resided in the same place of abode as petitioner, petitioner’s
wife (Christopher’s mother) and other extended family members.
Also in 2002, Christopher did not work but attended some classes
at a “computer school”. However, he never officially enrolled in
any school or classes. Christopher was not a full-time student
during the year in issue.
Petitioner and his family resided in public housing during
the year in issue. Petitioner paid rent of $147 per month for a
four-bedroom apartment in the Red Hook section of Brooklyn, New
York.
Petitioner made about $280 a week from his employment as a
security guard. After petitioner paid the rent, he would give
the rest of the proceeds from his paycheck to his wife who would
buy food and necessities for all the members of the family.
Petitioner no longer controlled any of the financial decisions
once the proceeds were given to his wife. Petitioner did not
know what was purchased with the proceeds of his check.
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Christopher received an unspecified amount of support from his
father, which was used to buy clothing and other items.
Petitioner had health insurance coverage from his employment
and medicaid coverage from his past service in the United States
military. These health insurance plans covered health benefits
for petitioner and his wife; however, they did not cover any
health benefits for Christopher.
Dependency Exemption–-Section 152
Respondent contends that the change in filing status of
petitioner from single, as determined in the notice of
deficiency, to married filing jointly makes the issue of the
dependency exemption deduction for Christopher moot.
Under joint filing status, petitioner is able to claim an
additional exemption deduction for his wife and is able to claim
the 2002 standard deduction for such filing of $7,850.
Petitioner’s adjusted gross income for the year in issue was
$13,398. Petitioner’s wife did not have any gross income for the
year in issue. Therefore, their combined adjusted gross income
was $13,398. The 2002 standard deduction for individuals married
filing jointly was $7,850. In 2002, taxpayers eligible to file
under married filing jointly status are entitled to a $3,000
deduction for each exemption claimed, which in the present
circumstance would be two exemptions for petitioner and his wife
or $6,000 in exemption deductions. Therefore, as can be seen by
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the joint adjusted gross income and the deductions that
petitioner and his wife are entitled to, when filing jointly
petitioner and his wife have no taxable income in the year 2002,
even without an exemption deduction for Christopher. Therefore,
even if petitioner were entitled to a dependency exemption
deduction for Christopher, such a deduction would not reduce his
taxable income.
Even if this issue had not been made moot by the change in
filing status of petitioner, on this record, petitioner has
failed to establish that he provided more than half of the total
support for Christopher. See Archer v. Commissioner, 73 T.C.
963, 967 (1980); Blanco v. Commissioner, 56 T.C. 512, 514-515
(1971); sec. 1.152-1(a)(2)(i), Income Tax Regs.
Earned Income Credit–-Section 32
Petitioner claimed an earned income credit with Christopher
as the qualifying child. In the notice of deficiency, respondent
disallowed the earned income credit. Respondent contends that
petitioner is not entitled to an earned income credit under
section 32 for his stepson Christopher, because Christopher was
not a full-time student in 2002.
Subject to certain limitations, an eligible individual is
allowed a credit which is calculated as a percentage of the
individual’s earned income. Sec. 32(a)(1). Earned income
includes wages. Sec. 32(c)(2)(A). For the year in issue,
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individuals who do not have any qualifying children, and whose
earned income is $12,0601 or greater, are not entitled to an
earned income credit for that year. Sec. 32(a) and (b). An
individual with qualifying children is entitled to a credit at
higher levels of earned income and in a larger amount than is an
individual without qualifying children. Id. As is relevant
here, a qualifying child is a child of a taxpayer who has the
same principal place of abode as the taxpayer for more than half
of the taxable year and who meets the age requirements. Sec.
32(c)(3)(A). An individual meets the age requirements if such
individual has not attained the age of 19 as of the close of the
calendar year in which the taxable year of the taxpayer begins,
is a student (as defined by section 151(c)(4)) who has not
attained the age of 24 as of the close of such calendar year, or
is permanently and totally disabled at any time during the
taxable year. Sec. 32(c)(3)(C).
As discussed above, Christopher had attained the age of 21
in 2002. Petitioner also conceded that Christopher was not a
full-time student, and, therefore, was not a student as defined
by section 151(c)(4).
Upon the basis of the record, we hold that Christopher does
not satisfy the requirements for a qualifying child with respect
1
This amount was obtained from the 2002 earned income credit
tables prescribed pursuant to sec. 32(f).
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to petitioner and his wife for 2002. See sec. 32(c)(3)(A)(i)
through (iii) and sec. 32(c)(3), (C)(ii). Based on their income
and the earned income credit tables prescribed pursuant to
section 32(f), we hold that petitioner and his wife are not
entitled to an earned income credit for 2002.
Reviewed and adopted as the report of the Small Tax Case
Division.
Decision will be entered
under Rule 155.