T.C. Summary Opinion 2005-101
UNITED STATES TAX COURT
DANIEL J. ONORATI, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 16224-04S. Filed July 21, 2005.
Daniel J. Onorati, pro se.
Alexandra E. Nicholaides, for respondent.
DEAN, Special Trial Judge: This case was heard pursuant to
the provisions of section 7463 of the Internal Revenue Code.
Unless otherwise indicated, 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. The decision to be entered is not reviewable by any
other court, and this opinion should not be cited as authority.
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Respondent determined a deficiency in petitioner’s Federal
income tax of $5,453 for 2002.
The issues for decision are: (1) Whether petitioner is
entitled to dependency exemption deductions; (2) whether
petitioner is entitled to head of household filing status; and
(3) whether petitioner is entitled to child tax credits.
Background
Some of the facts have been stipulated and are so found.
The stipulation of facts and exhibits received into evidence are
incorporated herein by reference. At the time the petition in
this case was filed, petitioner resided in Warren, Michigan.
During 2002, petitioner lived with his mother, Genevieve
Onorati; his sister, Samantha Wray; and his aunt, Catherine
Onorati (Ms. Onorati).
On his 2002 Form 1040, U.S. Individual Income Tax Return,
petitioner claimed four dependents: His daughter, ZJ;1 his son,
JO; his nephew, AR; and his aunt, Ms. Onorati.
Camille Jefferson (Ms. Jefferson) is ZJ’s mother. During
2002, Ms. Jefferson had physical custody of ZJ the entire year.
ZJ spent weekends with petitioner. Petitioner did not attach a
1
The Court uses only the minor children’s initials.
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Form 8332, Release of Claim to Exemption for Child of Divorced or
Separated Parents, to his return regarding ZJ.2
Lashandra Marsh (Ms. Marsh) is JO’s mother. Both petitioner
and Ms. Marsh claimed JO as a dependent for the 2002 tax year.
Petitioner paid child support for JO during 2002 but did not have
custody of the child. Petitioner did not attach a Form 8332 to
his return regarding JO.
AR, petitioner’s nephew, spent weekends with petitioner but
did not live with him. AR’s mother had custody of him.
Petitioner took AR and JO to “Fun Factory, Chuck E. Cheese,
movies, things of that nature.” At trial, petitioner did not
know AR’s birth date.
Ms. Onorati lived with petitioner at his mother’s house
during 2002. She is disabled and received Federal disability
payments of $7,344 during 2002. Petitioner does not have any
receipts to demonstrate any amounts he may have spent to care for
her.
Respondent issued a notice of deficiency determining that
petitioner is not entitled to claim head of household filing
status, dependency exemption deductions, or child tax credits for
2002 because he failed to substantiate his claims.
2
In the trial transcript, respondent refers to a “Form
8223.” From the context of the transcript, the Court understands
that respondent was referring to a Form 8332, Release of Claim to
Exemption for Child of Divorced or Separated Parents.
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Discussion
Deductions are a matter of legislative grace, and taxpayers
must maintain adequate records to substantiate the amount of any
deductions or credits claimed. Sec. 6001; INDOPCO, Inc. v.
Commissioner, 503 U.S. 79, 84 (1992); sec. 1.6001-1(a), Income
Tax Regs. Taxpayers generally bear the burden of proving that
the Commissioner’s determinations are incorrect. Rule 142(a);
Welch v. Helvering, 290 U.S. 111, 115 (1933).
Section 7491 does not apply here because petitioner has
failed to substantiate his deductions and provide evidence other
than his own testimony. See sec. 7491(a)(2).
1. Dependency Exemption Deductions
Section 151(c) allows a taxpayer to deduct an exemption
amount for each “dependent” as defined in section 152. As
relevant here, section 152(a) defines a dependent to include a
son or daughter of the taxpayer, a son or daughter of a sibling
of the taxpayer, or an individual other than a spouse, whose
principal place of abode is the home of the taxpayer and who is a
member of the taxpayer’s household “over half of whose support,
for the calendar year in which the taxable year of the taxpayer
begins, was received from the taxpayer (or is treated under
subsection (c) or (e) as received from the taxpayer)”.
To qualify for a dependency exemption deduction, a taxpayer
must establish the total support cost expended on behalf of a
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claimed dependent from all sources for the year and demonstrate
that he or she 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); sec. 1.152-1(a)(2)(i),
Income Tax Regs.
The term “support” includes food, shelter, clothing, medical
and dental care, education, and the like. Sec. 1.152-1(a)(2)(i),
Income Tax Regs. The total amount of support for each claimed
dependent furnished by all sources during the year in issue must
be established by competent evidence. Blanco v. Commissioner,
supra at 514; sec. 1.152-1(a)(1), Income Tax Regs. The amount of
support that the claimed dependent received from the taxpayer is
compared to the total amount of support the claimed dependent
received from all sources. Sec. 1.152-1(a)(2)(i), Income Tax
Regs.
Petitioner did not provide any evidence of total support for
the children and his aunt. He provided no evidence other than
his testimony regarding any amounts he may have expended to care
for ZJ, JO, AR, or Ms. Onorati. The Court sustains respondent’s
determination that petitioner is not entitled to dependency
exemption deductions for ZJ, JO, AR, or Ms. Onorati in 2002.
2. Head of Household Filing Status
Section 1(b) imposes a special tax rate on individuals
filing as head of household. As relevant herein, section 2(b)
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defines a “head of household” as an unmarried individual who
maintains as his or her home a household that for more than one-
half of the taxable year constitutes the principal place of abode
of an unmarried child, sec. 2(b)(1)(A)(i), or any other
individual for whom the taxpayer is entitled to a deduction under
section 151, sec. 2(b)(1)(A)(ii).
Respondent determined that petitioner is not entitled to
section 151 dependency exemption deductions for ZJ, JO, AR or Ms.
Onorati in 2002. The record demonstrates that the principal
place of abode for each of the children was the home of each of
their respective mothers, not petitioner’s home. Therefore,
petitioner is not entitled to head of household status as to any
of the children. Additionally, petitioner was not entitled to a
section 151 deduction for Ms. Onorati, and it has not been
established that he maintained the household, since he lived with
his mother. The Court sustains respondent’s determination that
petitioner is not entitled to claim head of household filing
status for 2002.
3. 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
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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).
As stated supra, the Court has sustained respondent’s
determination that petitioner is not entitled to a dependency
exemption deduction for ZJ, JO, or AR. 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
for respondent.