T.C. Summary Opinion 2006-2
UNITED STATES TAX COURT
SHANE NOLAN AND MONIKA ANNE LEWIS, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 4152-04S. Filed January 3, 2006.
Shane Nolan and Monika Anne Lewis, pro se.
Nhi T. Luu-Sanders, for respondent.
COUVILLION, Special Trial Judge: This case was heard
pursuant to section 7463 in effect when the petition was filed.1
The decision to be entered in this case is not reviewable by any
other court, and this opinion should not be cited as authority.
1
Unless otherwise indicated, section references hereafter
are to the Internal Revenue Code in effect for the year at issue,
and all Rule references are to the Tax Court Rules of Practice
and Procedure.
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Respondent determined a deficiency in petitioners’ Federal
income tax for 2002 in the amount of $2,697.
At trial, respondent conceded that petitioners are entitled
to a disallowed dependency exemption deduction for one of two
children claimed as dependents on their 2002 income tax return as
well as the section 24 child care credit with respect to that
child. The remaining issue for decision is whether petitioners
are entitled under section 151 and related sections to the
dependency exemption deduction for another child and the child
care credit for that child claimed on their 2002 return.
Some of the facts were stipulated. Those facts, with the
exhibits annexed thereto, are so found and are made part hereof.
Petitioners’ legal residence at the time the petition was filed
was Vancouver, Washington.2
Petitioners have one child of their marriage. As noted
above, respondent conceded at trial petitioners’ entitlement to
the dependency exemption deduction and the section 24 child care
credit with respect to that child. The issue is whether
petitioners are entitled to the dependency exemption deduction
2
This case is decided without regard to the burden of proof.
Sec. 7491(a).
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and the child care credit with respect to another child of Shane
Nolan Lewis (petitioner).3
The child was born on November 4, 1993. Petitioner and the
child’s mother (the mother) were never married. Petitioner and
the mother shared joint legal and physical custody of the child.
By court decree, the mother was declared custodial parent, and
petitioner was designated the noncustodial parent. During the
year at issue, 2002, the child lived with his mother and her
parents at Anderson, California. The child had extended visits
with petitioners during 2002, but the longevity of his combined
visits was considerably less than one-half of the taxable year,
approximately 98 days.
During 2002, petitioners provided both financial and medical
support for the child. The support consisted of child support
payments, tuition for special classes, dental expenses, and
approximately $430 for clothing and miscellaneous expenses. In
addition, petitioner’s health insurance coverage with his
employer also included the child, the cost of which did not
require payment of any additional premium by petitioner. The
total monetary support provided by petitioners during 2002 was
approximately $5,502.
3
Throughout the opinion, references to “the child” are to
this child and not the child as to whom respondent conceded the
dependency exemption deduction and child care credit adjustments.
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On their Federal income tax return for 2002, petitioners
claimed a dependency exemption deduction for the child and the
section 24 child care credit. In the notice of deficiency,
respondent disallowed the dependency exemption deduction and the
child care credit.
Petitioners did not attach to their 2002 income tax return a
consent from the child’s mother, Form 8332, Release of Claim to
Exemption for Child of Divorced or Separated Parents, or a Form
2120, Multiple Support Agreement, wherein the grandparents and
the mother of the child consented to petitioners’ claiming the
child as a dependent on their 2002 Federal income tax return.4
Petitioners nevertheless claimed the child as a dependent on
their 2002 Federal income tax return. Respondent disallowed the
dependency exemption deduction for the reason that petitioners
had not established they were entitled to the exemption because
4
The Form 2120 is an acknowledgment by a group of
contributors who have collectively provided over one-half of a
dependent’s support for a calendar year and who may annually
designate one of their number to claim the dependency exemption
deduction for the dependent. The taxpayer who is designated as
entitled to claim the dependency exemption deduction must attach
a statement to his return identifying each member of the
supporting group and, in general, comply with sec. 1.152-3,
Income Tax Regs. Petitioners testified that they had solicited a
multiple support agreement from the grandparents and the mother
to allow petitioners the dependency exemption deduction for 2002;
however, the grandparents and the mother declined. Petitioners
also solicited a consent from the mother to allow petitioners the
dependency exemption deduction, and she also declined that
request.
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the mother of the child, pursuant to the court decree, had
primary physical custody of the child.
Section 151(c) allows taxpayers to deduct an annual
exemption amount for each dependent as defined in section 152.
Under section 152(a), the term “dependent” means certain
individuals, such as a son, daughter, stepson, or stepdaughter,
“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 section (c) or (e) as received from
the taxpayer)”.
The support test in section 152(e)(1) applies if: (1) A
child receives over half of his support during the calendar year
from his parents; (2) the parents are separated under a written
separation agreement or live apart at all times during the last 6
months of the calendar year; and (3) such child is in the custody
of one or both of his parents for more than one-half of the
calendar year. If these requirements are satisfied, the “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 (* * *
referred to as the ‘custodial parent’)”, sec. 152(e)(1)(B), thus
allowing the dependency exemption deduction to be claimed by the
“custodial parent”.
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Section 1.152-4(b), Income Tax Regs., provides that custody
is determined by the terms of the most recent decree of divorce
or separate maintenance, or subsequent custody decree, or, if
none, a written separation agreement. Since petitioner and the
mother were never married, there was no decree of divorce or
separate maintenance severing their relationship. However, in a
subsequent court decree, the mother was decreed as having
principal custody of the child. Under section 1.152-4(b), Income
Tax Regs., the mother was the child’s custodial parent.
Therefore, the mother was entitled to the dependency exemption
under section 152(e)(1), if she and petitioner provided more than
one-half of the child’s support, unless petitioners met one of
the exceptions set forth in section 152(e).
The first exception, section 152(e)(2), allows the
noncustodial parent the dependency exemption if, among other
requirements not at issue here, the custodial parent signs a
written declaration that such parent will not claim the child as
a dependent for such taxable year. The appropriate vehicle for
that purpose is Form 8332. Petitioners sought but were not
successful in obtaining such a release from the mother. The
other relevant exception, section 152(e)(4), requires a multiple
support agreement (see supra note 4) whereby petitioners would
have been allowed the dependency exemption deduction by the other
parties providing support to the child. The other parties who
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provided support were the child’s mother and her parents. That
also was not agreed to by the child’s mother and her parents.
One of the express conditions of section 152(e)(1) is that
the child claimed as a dependent receive over half of his support
during the calendar year from his parents, among other
requirements not pertinent here. As noted above, the child,
during the year in question, lived with the grandparents along
with his mother. There was no evidence offered to show the
amount of support the grandparents provided or the amount of
support the mother provided. Although petitioners provided
$5,502 in support, petitioners have not established that this
amount constituted more than one-half of the total support
provided to the child that year by petitioners, the child’s
mother, and the child’s grandparents.
Section 1.152-1(a)(2)(i), Income Tax Regs., provides that,
in determining whether an individual received over half of his
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, including support which the individual himself
supplied.” In Blanco v. Commissioner, 56 T.C. 512, 514-515
(1971), this Court held that, in establishing that more than one-
half of a dependent’s support has been provided, a prerequisite
to such a showing is the demonstration by competent evidence of
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the total amount of the dependent’s support from all sources for
that year. If the amount of total support is not established and
cannot be reasonably inferred from competent evidence available
to the Court, it is not possible to conclude that the taxpayer
claiming the exemption provided more than one-half of the support
of the claimed dependent. Batson v. Commissioner, T.C. Memo.
2000-172.
Petitioner did not meet any of the exceptions to section
152(e)(1). Therefore, assuming that petitioner and the mother
together provided over one-half of the child’s support, the
mother is entitled to the dependency exemption for the child
pursuant to section 152(e)(1) as the custodial parent. In the
event that petitioner and the mother did not provide over one-
half of the child’s support (e.g., such support was provided by
the grandparents), it follows that petitioners are not entitled
to deduct the dependency exemption for the child pursuant to
section 152(a). Although petitioner provided $5,502 in support,
petitioners have not established that this amount constituted
more than one-half of the total support provided to the child by
petitioner, the child’s mother, and the child’s grandparents.
The second issue is respondent’s disallowance of the child
tax credit claimed by petitioners under section 24. Section 24
allows a credit against the tax for any qualifying child under
the age of 17. However, a qualifying child is an individual for
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whom the taxpayer can claim a dependency exemption deduction and
is the son or daughter of the taxpayer. Since petitioners are
not entitled to the dependency exemption deduction for the child
for the year at issue, it follows that they are not entitled to
the section 24 child tax credit.
Reviewed and adopted as the report of the Small Tax Case
Division.
Decision will be entered
under Rule 155.