T.C. Summary Opinion 2005-89
UNITED STATES TAX COURT
WALTER D. AND PAULEANA L. MACE, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 20992-03S. Filed July 14, 2005.
Walter D. and Pauleana L. Mace, pro sese.
Edward L. Walter, 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.
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“Petitioner” refers only to Walter D. Mace. Respondent
determined a deficiency of $1,397 in petitioners’ 2001 Federal
income tax. The issue is whether petitioners are entitled to a
section 151 dependency exemption deduction and a section 24 child
tax credit for petitioner’s minor child. At the time the
petition was filed petitioners resided in Erlanger, Kentucky.
Background
Petitioner and Ella Jo Willis (custodial parent) are the
biological parents of a minor child who was born in 1991.
Petitioner and the custodial parent have never been married to
each other, and they lived apart at all times during 2001. By
order of the Hamilton County Juvenile Court (support order) dated
May 25, 1999, petitioner was ordered to pay the custodial parent
child support.
The support order states that “every year” petitioner is
entitled to claim the child as a dependent for tax purposes if
the child support payments for the year in which the child will
be claimed as a dependent are current in full. The support order
also provides that the custodial parent “must take whatever
action necessary to enable this claim.” Petitioner was current
in full with his child support obligations for the year at issue.
Petitioners claimed a dependency exemption deduction and a
child tax credit for petitioner’s minor child on their jointly
filed Form 1040, U.S. Individual Income Tax Return, for the
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taxable year 2001.2 Petitioners did not attach any statement
from the custodial parent or an Internal Revenue Service form
regarding petitioner’s entitlement to the dependency exemption
deduction to their return. Respondent notified petitioners that
their 2001 return was under examination due to the claimed
dependency exemption deduction and child tax credit. The
custodial parent also claimed the child as a dependent when she
filed her return for the 2001 taxable year.
Petitioner filed a motion in Hamilton County Juvenile Court
to have the custodial parent found in contempt of the State court
support order entitling petitioner to the dependency exemption
deduction, and that she be ordered to pay petitioner the money
due resulting from her actions. On May 11, 2004, the State court
did not find the custodial parent to be in contempt, but ordered
her to file an amended return and not claim the child as a
dependent. At the time of trial, it was not known whether the
custodial parent had complied with the May 11, 2004, order and in
fact had filed an amended return.
2
The record does not show when petitioners were married.
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Discussion3
A. Dependency Exemption Deduction
Sections 151 and 152 provide that a taxpayer is entitled to
deduct an exemption for a dependent if the taxpayer provides over
half of the support for the dependent. Under section 152(e)(1),
in the case of a minor dependent whose parents are divorced,
separated under a written agreement, or who have lived apart at
all times during the last 6 months of the calender year, and
together provide over half of the support for the minor
dependent, the parent having custody for a greater portion of the
calendar year (custodial parent) generally shall be treated as
providing over half of the support for the minor dependent.
Section 152(e)(1) applies to parents who have never married each
other, and therefore it applies in this case. King v.
Commissioner, 121 T.C. 245, 251 (2003).
Petitioner is not the custodial parent and is not entitled
to the dependency exemption deduction under section 152(e)(1). A
noncustodial parent may be entitled to the exemption if one of
three exceptions in section 152(e) is satisfied. The only
exception relevant to this case is contained in section
152(e)(2). Section 152(e)(2) provides that a child shall be
treated as having received over half of his or her support from
3
We decide the issue in this case without regard to the
burden of proof. See Higbee v. Commissioner, 116 T.C. 438
(2001).
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the noncustodial parent if:
(A) the custodial parent signs a written declaration
(in such manner and form as the Secretary may by regulations
prescribe) that such custodial parent will not claim such
child as a dependent for any taxable year beginning in such
calendar year, and
(B) the noncustodial parent attaches such written
declaration to the noncustodial parent's return for the
taxable year beginning during such calendar year.
Section 1.152-4T(a), Q&A-3, Temporary Income Tax Regs., 49
Fed. Reg. 34459 (Aug. 31, 1984),4 further provides:
The written declaration may be made on a form to be
provided by the Service for this purpose. * * *
Pursuant to the regulations, the Internal Revenue Service
issued Form 8332, Release of Claim to Exemption for Child of
Divorced or Separated Parents, as a way to satisfy the written
declaration requirement of section 152(e)(2). Form 8332
instructs the taxpayer to provide (1) the names of the children
for whom exemption claims were released, (2) the years the claims
are released, (3) the signature of the custodial parent to
confirm their consent, (4) the Social Security number of the
custodial parent, (5) the date of the custodial parent’s
signature, and (6) the name and Social Security number of the
parent claiming the exemption. If Form 8332 is not used, a
statement conforming to the substance of Form 8332 must be used.
4
Temporary regulations are entitled to the same weight
as final regulations. See Peterson Marital Trust v.
Commissioner, 102 T.C. 790, 797 (1994), affd. 78 F.3d 795 (2d
Cir. 1996).
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See Miller v. Commissioner, 114 T.C. 184 (2000); sec. 1.152-
4T(a), Q&A-3, Temporary Income Tax Regs., supra.5
Petitioners did not attach a written declaration, Internal
Revenue Service form, or other statement signed by the custodial
parent to their return. See sec. 152(e)(2)(A) and (B).
Petitioners, therefore, did not establish entitlement to the
dependency exemption deduction for the year in question. See
Paulson v. Commissioner, T.C. Memo. 1996-560.
Although the support order provides that petitioner is
entitled to the dependency exemption deduction, it cannot by its
own terms determine issues of Federal tax law. Commissioner v.
Tower, 327 U.S. 280 (1946); Kenfield v. United States, 783 F.2d
966 (10th Cir. 1986); Neal v. Commissioner, T.C. Memo. 1999-97;
5
Petitioner Pauleana L. Mace testified that petitioners
were told by the Internal Revenue Service that as a noncustodial
parent who was never married to the custodial parent petitioner
could not use Form 8332, but instead needed a Form 2120, Multiple
Support Declaration. Form 2120 is used for the claiming of
dependency exemptions where multiple taxpayers support a
dependent and where the taxpayer contributed over 10 percent of
the support of the claimed dependent. Sec. 152(c)(3). Sec.
152(c)(4) requires a written declaration for each person (other
than the taxpayer) who contributed over 10 percent of such
support that he or she will not claim the individual as a
dependent for the same taxable year. Sec. 1.152-3(c), Income Tax
Regs., provides that the written declaration may be made on Form
2120 or in a similar manner.
In light of this Court’s holding in King v. Commissioner,
121 T.C. 245, 250-251 (2003), a properly executed Form 8332 can
constitute the waiver of a custodial parent’s claim to the
dependency exemption deduction even where the parents were never
married to each other. Which form should have been used is not
at issue, as no form or statement signed by the custodial parent
was attached to petitioners’ return when they filed it.
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Nieto v. Commissioner, T.C. Memo. 1992-296. Petitioners’ remedy
is to continue to pursue the custodial parent’s compliance with
the support order in the State court, and any and all other
remedies that may be pursued against the custodial parent to make
petitioners whole.
B. Child Tax Credit
Section 24(a) provides that a taxpayer may claim a credit
for “each qualifying child”. As relevant here, a qualifying
child is defined as an individual if “the taxpayer is allowed a
deduction under section 151 with respect to such individual for
the taxable year”. Sec. 24(c)(1)(A). Petitioner did not
establish entitlement to a dependency exemption deduction under
section 151; therefore, he is not entitled to claim the child tax
credit.
Reviewed and adopted as the report of the Small Tax Case
Division.
Decision will be entered
for respondent.