T.C. Summary Opinion 2005-149
UNITED STATES TAX COURT
JONATHAN W. BODIFORD, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 20105-03S. Filed October 12, 2005.
Jonathan W. Bodiford, pro se.
Steven M. Webster, 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.
- 2 -
Respondent determined a deficiency in petitioner’s Federal
income tax of $2,506 for the taxable year 2002.
The issues for decision are: (1) Whether petitioner is
entitled to claim a dependency exemption deduction for JTMZ;1 (2)
whether petitioner is entitled to head-of-household filing
status; and (3) whether petitioner is entitled to an earned
income credit for taxable year 2002.
Background
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
Barnwell, South Carolina, on the date the petition was filed in
this case.
Petitioner began dating Katrina Laird (Ms. Laird) sometime
during 1999. At that time, Ms. Laird was separated from her
spouse but was not divorced. Ms. Laird had a child from her
previous relationship. Petitioner and Ms. Laird dated and lived
together, along with her child from the previous relationship,
for nearly 3 years. Unbeknownst to Ms. Laird and petitioner, at
the time they began dating Ms. Laird was pregnant. In 1999, Ms.
Laird gave birth to JTMZ. Both Ms. Laird and petitioner believed
that JTMZ was their child. Petitioner loved and cared for JTMZ
as if he were petitioner’s own child. Petitioner and Ms. Laird
1
The Court uses only the minor child’s initials.
- 3 -
had a child together, MLB, during their relationship. At all
times, after birth, MLB lived with Ms. Laird. MLB is not at
issue in the present case. By the taxable year 2002, petitioner
and Ms. Laird parted company and no longer lived together. They
did not implement a formal custody agreement when they parted
company.
During 2002, petitioner worked part-time in construction and
resided in a trailer on his parents’ property.
In 2004, Ms. Laird requested that petitioner take a DNA
paternity test to determine whether he was the father of JTMZ.
The DNA paternity test verified that petitioner was not the
father of JTMZ.
Petitioner electronically filed his timely Form 1040, U.S.
Individual Income Tax Return, for the taxable year 2002. In his
2002 Federal income tax return, petitioner claimed JTMZ as his
dependent. Petitioner also claimed head-of-household filing
status and an earned income credit with JTMZ as the qualifying
child.
On September 10, 2003, respondent issued a notice of
deficiency denying petitioner: (1) The claimed dependency
exemption deduction, (2) head-of-household filing status, and (3)
the claimed earned income credit for taxable year 2002.
- 4 -
Discussion
In general, the Commissioner’s determination set forth in a
notice of deficiency is presumed correct. Welch v. Helvering,
290 U.S. 111, 115 (1933). In pertinent part, Rule 142(a)(1)
provides the general rule that “The burden of proof shall be upon
the petitioner”. In certain circumstances, however, if the
taxpayer introduces credible evidence with respect to any factual
issue relevant to ascertaining the proper tax liability, section
7491 places the burden of proof on the Commissioner. Sec.
7491(a)(1); Rule 142(a)(2). Credible evidence is “‘the quality
of evidence which, after critical analysis, * * * [a] court would
find sufficient * * * to base a decision on the issue if no
contrary evidence were submitted.’”2 Baker v. Commissioner, 122
T.C. 143, 168 (2004) (quoting Higbee v. Commissioner, 116 T.C.
438, 442 (2001)). Section 7491(a)(1) applies only if the
taxpayer complies with substantiation requirements, maintains all
required records, and cooperates with the Commissioner for
witnesses, information, documents, meetings, and interviews.
Sec. 7491(a)(2). Although neither party alleges the
applicability of section 7491(a), we conclude that the burden of
proof has not shifted to respondent with respect to any of the
2
We interpret the quoted language as requiring the
taxpayer’s evidence pertaining to any factual issue to be
evidence the Court would find sufficient upon which to base a
decision on the issue in favor of the taxpayer. See Bernardo v.
Commissioner, T.C. Memo. 2004-199.
- 5 -
issues in the case at bar. Therefore, petitioner bears the
burden of showing that he is entitled to claim a dependency
exemption deduction for JTMZ; that he is entitled to head-of-
household filing status; and that he is entitled to an earned
income credit for taxable year 2002.
Moreover, deductions are a matter of legislative grace and
are allowed only as specifically provided by statute. INDOPCO,
Inc. v. Commissioner, 503 U.S. 79, 84 (1992); New Colonial Ice
Co. v. Helvering, 292 U.S. 435, 440 (1934).
1. Deduction for Dependency Exemption
As previously stated, on his 2002 Federal income tax return,
petitioner claimed a dependency exemption deduction for JTMZ.
Respondent disallowed the deduction in the notice of deficiency.3
Section 151 allows deductions for personal exemptions.
Besides providing exemptions for the taxpayer and, in certain
circumstances, the taxpayer’s spouse, section 151 provides
exemptions for dependents of the taxpayer. See sec. 151(c).
Section 152(a) defines the term “dependent”, in pertinent part,
3
The notice of deficiency did not question the paternity of
JTMZ. Instead, the Commissioner, in the notice of deficiency,
denied petitioner the dependency exemption deduction, head-of-
household filing status, and the earned income credit because
petitioner did not establish that his residence constituted the
principal place of abode for JTMZ for more than one-half of the
taxable year, nor did petitioner substantiate that he provided
more than one-half of JTMZ’s support for taxable year 2002.
- 6 -
to include “A son or daughter of the taxpayer[4] * * * over half
of whose support, for the calendar year * * * was received from
the taxpayer”. “Support” includes “food, shelter, clothing,
medical and dental care, education, and the like.” Sec. 1.152-
1(a)(2)(i), Income Tax Regs.
In determining whether an individual received more than one-
half of his or her support from the taxpayer, there shall be
taken into account the amount of support received from the
taxpayer as compared to the entire amount of support which the
individual received from all sources. Id. A special support
test applies to certain parents. Section 152(e) provides:
SEC. 152(e). Support Test in Case of Child of Divorced
Parents, Etc.--
(1) Custodial parent gets exemption.--Except as
otherwise provided in this subsection, if--
(A) a child (as defined in section 151(c)(3))
receives over half of his support during the
calendar year from his parents--
(i) who are divorced or legally
separated under a decree of divorce or
separate maintenance,
(ii) who are separated under a written
separation agreement, or
(iii) who live apart at all times during
the last 6 months of the calendar year, and
4
As previously noted, the Commissioner did not question the
paternity of JTMZ; therefore, we consider JTMZ to have met the
relationship test of sec. 152(a). We also consider JTMZ to have
met the age requirement of sec. 151(c).
- 7 -
(B) such child is in the custody of one or
both of his parents for more than one-half of the
calendar year,
such child shall be treated, for purposes of subsection (a),
as receiving over half of his support during the calendar
year from the parent having custody for a greater portion of
the calendar year (hereinafter in this subsection referred
to as the “custodial parent”).
(2) Exception where custodial parent releases
claim to exemption for the year.--A Child of parents
described in paragraph (1) shall be treated as having
received over half of his support during a calendar
year from 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.
For purposes of this subsection, the term “noncustodial
parent” means the parent who is not the custodial parent.
If the requirements of section 152(e)(1) are met, the child
is treated as having received over half of his support from the
custodial parent, and the custodial parent is entitled to the
dependency exemption deduction. The noncustodial parent can gain
entitlement to the deduction if the custodial parent executes a
valid written declaration under section 152(e)(2) releasing the
claim to the deduction. The declaration may apply to 1 year, a
set number of years, or all future years. Sec. 1.152-4T(a), Q&A-
- 8 -
4, Temporary Income Tax Regs., 49 Fed. Reg. 34459 (Aug. 31,
1984).
Petitioner testified that JTMZ resided with him during the
entire taxable year 2002. Petitioner did not offer into evidence
any documentation to substantiate his claim that JTMZ resided
with him during the taxable year 2002. At trial, petitioner had
letters that were typed by Ms. Laird claiming that JTMZ resided
with petitioner during taxable year 2002. These letters were
signed by Ms. Laird, petitioner’s minister, and petitioner’s
father. However, these letters were never received into evidence
in this case. On the basis of the record and the facts of the
present case, we find that petitioner did not substantiate that
JTMZ resided with him during the taxable year 2002. Therefore,
we conclude that petitioner was not the custodial parent of JTMZ
for taxable year 2002. We further conclude that the letter
signed by Ms. Laird, referred to above, does not constitute a
valid written declaration under section 152(e)(2) releasing the
claim to the deduction. Petitioner, therefore, is not entitled
to the dependency exemption deduction for taxable year 2002 with
respect to JTMZ. Secs. 151(a), (c), and 152(a). Respondent’s
determination on this issue is sustained.
2. Head of Household
As previously stated, petitioner claimed head-of-household
filing status on his 2002 Federal income tax return, and
- 9 -
respondent changed the filing status to single in the notice of
deficiency.
Section 1(b) imposes a special income tax rate on an
individual filing as head of household. As relevant herein,
section 2(b) defines a “head of household” as an unmarried
individual who maintains as his or her home a household which
constitutes for more than one-half of the taxable year the
principal place of abode of a child of the taxpayer. Sec.
2(b)(1)(A)(i).
As previously stated, petitioner is unable to establish that
his residence constituted the principal place of abode for JTMZ
for more than one-half of the taxable year. Petitioner has not
claimed that any other individual resided in his household. It
follows, therefore, that petitioner is not entitled to claim
head-of-household filing status.
3. Earned Income Credit
As previously stated, petitioner claimed an earned income
credit for taxable year 2002 with JTMZ as the qualifying child.
In the notice of deficiency, respondent disallowed the earned
income credit in full.
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). Section 32(c)(1)(A)(i), in
pertinent part, defines an “eligible individual” as “any
- 10 -
individual who has a qualifying child for the taxable year”. A
“qualifying child” is one who satisfies a relationship test, a
residency test, and an age test. Sec. 32(c)(3). The pertinent
parts of section 32(c)(3) provide:
(3) Qualifying Child.--
(A) In general.--The term “qualifying child” means,
with respect to any taxpayer for any taxable year, an
individual--
(i) who bears a relationship to the taxpayer
described in subparagraph (B),
(ii) who has the same principal place of abode as
the taxpayer for more than one-half of such taxable
year, and
(iii) who meets the age requirements of
subparagraph (C).
As previously stated, petitioner has not established that
his residence was the principal place of abode for JTMZ for more
than one-half of the taxable year 2002. We find that JTMZ fails
the residency test of section 32(c)(3)(ii); therefore, we need
not, and do not decide whether he satisfies the relationship test
of section 32(c)(3)(B) or the age test under section 32(c)(3).
Petitioner may, however, still qualify for an earned income
credit. An individual who does not have a qualifying child may
be eligible under section 32(a) for an earned income credit,
subject to, among other things, phaseout limitations.
Merriweather v. Commissioner, T.C. Memo. 2002-226; Briggsdaniels
v. Commissioner, T.C. Memo. 2000-105, affd. 2 Fed. Appx. 848 (9th
- 11 -
Cir. 2001). An individual who does not have a qualifying child
is eligible for an earned income credit if: (1) The individual’s
principal place of abode is in the United States; (2) the
individual, or his or her spouse, has attained the age of 25 but
not the age of 65 at the close of the taxable year; and (3) the
individual is not a dependent for whom a deduction is allowed
under section 151. Sec. 32(c)(1)(A)(ii). Further, for the year
in issue, individuals who do not have any qualifying children and
whose earned income is $11,060 or greater are not entitled to an
earned income credit for that year. See Rev. Proc. 2001-13, sec.
3.03(1), 2001-1 C.B. 337, 339.
On this record, the Court is unable to determine whether
petitioner is eligible for an earned income credit under section
32(c)(1)(A)(ii).
Conclusion
We hold that petitioner is not entitled to claim a
dependency exemption deduction for JTMZ for taxable year 2002.
Petitioner also is not entitled to head-of-household filing
status for taxable year 2002, or an earned income credit under
section 32(c)(1)(A)(i) for taxable year 2002. Petitioner may
qualify for an earned income credit under section
32(c)(1)(A)(ii).
- 12 -
Reviewed and adopted as the report of the Small Tax Case
Division.
Decision will be entered
under Rule 155.