Baker v. Comm'r

T.C. Memo. 2006-60

UNITED STATES TAX COURT

DANIEL AARON BAKER, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 20105-04. Filed March 29, 2006.

Daniel Aaron Baker, pro se.

C. Teddy Li, for respondent.

MEMORANDUM FINDINGS OF FACT AND OPINION

CHIECHI, Judge: Respondent determined a deficiency of

$3,556 in petitioner’s Federal income tax (tax) for his taxable

year 2003.

The issues for decision for petitioner’s taxable year 2003

are:
 - 2 -

(1) Is petitioner entitled under section 1511 to a depend-

ency exemption deduction for his daughter A? We hold that he is

not.

(2) Is petitioner entitled under section 2(b) to head of

household filing status? We hold that he is not.2

(3) Is petitioner entitled under section 32 to the earned

income tax credit? We hold that he is not.

(4) Is petitioner entitled under section 24 to the child tax

credit? We hold that he is not.

(5) Is petitioner entitled under section 24 to the addi-

tional child tax credit? We hold that he is not.

FINDINGS OF FACT

At the time petitioner filed the petition, his mailing

address was in Dover, Delaware.

Petitioner and Deanna Wus (Ms. Wus) have a daughter A and a

son C (collectively, the children). At a time not disclosed by

the record, Ms. Wus purchased a double-wide trailer (trailer)

located at 153 Carnation Drive, Magnolia, Delaware. Ms. Wus,

petitioner, and the children lived in the trailer for an undis-

closed period of time prior to 2003. Sometime in 2002, Ms. Wus

1
All section references are to the Internal Revenue Code in
effect for the year at issue. All Rule references are to the Tax
Court Rules of Practice and Procedure.
2
The Court’s resolution of petitioner’s filing status con-
trols the amount of the standard deduction to which petitioner is
entitled for his taxable year 2003.
 - 3 -

stopped residing in the trailer, but petitioner continued to live

there until around mid-February 2003.3 Petitioner was unable to

afford the payments for the mortgage loan, ground rent, and

utilities with respect to the trailer after Ms. Wus stopped

residing there.

Around mid-February 2003, petitioner moved to a duplex

located at 299 Barney Jenkins Road, Felton, Delaware (Barney

Jenkins Road property), that a friend of his owned. While

residing at the Barney Jenkins Road property, petitioner paid his

friend $300 a month and shared an undisclosed amount of utility

expenses.

Sometime between the end of September or October 2003 and

mid-November 2003, petitioner moved to a house located on 268 Fox

Road, Dover, Delaware (Fox Road property), that his mother owned.

While residing at the Fox Road property in 2003, petitioner paid

his mother, who was living in Florida, $125 a week.

During 2003, petitioner, who worked as a plumber, and Ms.

Wus were not married, lived in separate residences, and had no

custody agreement concerning their daughter A who was four years

old.

During 2003, Ms. Wus received public assistance for A’s

benefit from the State of Delaware, which listed Ms. Wus as the

3
There is no reliable evidence in the record establishing
where the children lived after Ms. Wus stopped residing in the
trailer.
 - 4 -

custodial parent of A. During that year, Medicaid, and not

petitioner, provided healthcare benefits to A. During 2003,

petitioner did not apply for food stamps or any other type of

public assistance for his daughter A.

During 2003, petitioner and Ms. Wus each asked Rosemary

Srase (Ms. Srase) to babysit the children at Ms. Srase’s home.

Ms. Srase was a longtime friend of petitioner and his mother who

used to babysit petitioner when he was a child. Approximately

two to three times a week during 2003, Ms. Srase usually babysat

the children at her home for a few hours during the evenings.

Occasionally during 2003, she babysat them during the daytime and

overnight on weekends. During 2003, petitioner did not pay cash

to Ms. Srase for babysitting the children for him. Instead, he

did work for her at her home. Most of the time during 2003 that

Ms. Srase babysat the children, she provided them with some food

at her own expense. At no time during 2003 before petitioner

moved to the Fox Road property did Ms. Srase babysit the children

at petitioner’s residence or personally observe them at peti-

tioner’s residence. When petitioner moved into the Fox Road

property, Ms. Srase observed the children at that property.

On at least certain days during the period January 2 through

March 31, 2003, the Dover Educational & Community Daycare Center

(Daycare Center) provided daycare for the children. On most, but

not all, of such days, Ms. Wus brought the children to, and
 - 5 -

petitioner picked them up from, the Daycare Center. On certain

other days during the period January 2 through March 31, 2003,

Ms. Wus brought the children to, and also picked them up from,

the Daycare Center. On certain other days during that period,

petitioner brought the children to, and also picked them up from,

the Daycare Center. During the period January 2 through March

31, 2003, the times at which the children were brought to the

Daycare Center ranged from as early as 6:45 a.m. to as late as

4:20 p.m., and the times at which the children were picked up

from that center ranged from 11:00 a.m. to 5:45 p.m. In most

instances, however, the children were brought to the Daycare

Center before 9:00 a.m. and picked up from the Center between

4:30 p.m. and 5:30 p.m. During the period January 2 through

March 31, 2003, both petitioner and Ms. Wus made payments of

undisclosed amounts toward the cost of the children’s daycare at

the Daycare Center.

Petitioner timely filed his tax return for taxable year 2003

(petitioner’s 2003 return). In petitioner’s 2003 return, peti-

tioner reported wages of $14,929, business income of $420 from

Schedule C, Profit or Loss From Business, total income of

$15,349, and adjusted gross income of $15,349. In petitioner’s

2003 return, petitioner claimed (1) a dependency exemption

deduction for his daughter A, (2) head of household filing

status, (3) the earned income tax credit, (4) the child tax
 - 6 -

credit, and (5) the additional child tax credit.

In Ms. Wus’s tax return for her taxable year 2003, Ms. Wus

also claimed a dependency exemption deduction for her daughter A.

OPINION

Respondent, and not petitioner, addresses whether the burden

of proof should shift to respondent under section 7491(a).

Respondent argues that that burden should not shift because

“Petitioner has not provided sufficient credible evidence nor

maintained all required records to substantiate his claims.” On

the record before us, we agree with respondent. See sec.

7491(a)(1) and (a)(2)(A) and (B). We conclude that petitioner

has the burden of proof with respect to each of the issues

presented in this case. Rule 142(a); Welch v. Helvering, 290

U.S. 111, 115 (1933). Thus, petitioner has the burden of estab-

lishing that he is entitled for his taxable year 2003 to a

dependency exemption deduction for his daughter A, head of

household filing status, the earned income tax credit, the child

tax credit, and the additional child tax credit.

In support of his position with respect to each of the

issues presented in this case, petitioner relies on his own

testimony, the testimony of his mother, and the testimony of Ms.

Srase, a longtime family friend who used to babysit petitioner

when he was a child. We found the testimony of petitioner to be

in material respects conclusory, vague, self-serving, and uncor-
 - 7 -

roborated by reliable evidence. We found the testimony of

petitioner’s mother to be in material respects not based upon her

personal knowledge, conclusory, and serving the interests of her

son petitioner. We found the testimony of Ms. Srase to be in

material respects not based upon her personal knowledge,

conclusory, and serving the interests of her longtime friend

petitioner. We are not required to, and we shall not, rely on

the testimonies of petitioner, his mother, and Ms. Srase in order

to establish petitioner’s position with respect to the issues

presented in this case. See, e.g., Tokarski v. Commissioner, 87

T.C. 74, 77 (1986).

Claimed Dependency Exemption Deduction

Section 151(a) permits a taxpayer to deduct an exemption

amount for each dependent as defined in section 152. As perti-

nent here, section 152(a) defines the term “dependent” to include

an individual who receives from the taxpayer over half of such

individual’s support for the calendar year in which the taxable

year of the taxpayer begins and who is the taxpayer’s daughter.

Sec. 152(a)(1). As also pertinent here, if the taxpayer’s

daughter receives over half of her support during the calendar

year from her parents who live apart at all times during the last

six months of such year and if such daughter is in the custody of

one or both of her parents for more than one-half of such year,

the daughter will be treated for purposes of section 152(a) as
 - 8 -

having received over half of her support during the calendar year

from the parent (custodial parent) having custody for the greater

portion of the calendar year. Sec. 152(e)(1). Section 152(a)

also defines the term “dependent” to include an individual who,

for the taxable year of the taxpayer, has as such individual’s

principal place of abode the home of the taxpayer and is a member

of the taxpayer’s household and who received (or is treated as

having received under, inter alia, section 152(e)) from the

taxpayer over half of such individual’s support for the calendar

year in which the taxable year of the taxpayer begins. Sec.

152(a)(9).

In support of his position that he is entitled for his

taxable year 2003 to a dependency exemption deduction for his

daughter A, petitioner contends:

Petitioner and two other witnesses testified that * * *
[A] lived with her father, the petitioner from January
2003 until November 2003, when she went to live with
her mother. They also testified that the mother took
* * * [A] inconsistently on week-ends for those ten
months. Further testimony provided that the petitioner
maintained over half of the child’s support for that
period. * * * [Reproduced literally.]

With respect to whether petitioner is to be treated as the

custodial parent under section 152(e)(1), the record establishes

that petitioner and Ms. Wus had no custody agreement with respect

to either of the children for 2003. However, the State of

Delaware reported to respondent that Ms. Wus, and not petitioner,

was the claimed child’s custodial parent. Moreover, the record
 - 9 -

is devoid of evidence that we find to be reliable establishing

that A lived with her father from January until November 2003 or

that he otherwise had physical custody of A for a portion of 2003

that is greater than the portion of such year during which Ms.

Wus had physical custody of A.

With respect to whether petitioner provided over one-half of

A’s support during 2003, petitioner must show the amount of total

support incurred during that year on behalf of A from all

sources, and he must establish that he provided over half of that

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 provided by all sources during the year in question

must be shown by competent evidence. Blanco v. Commissioner,

supra at 514. Where the amount of total support incurred on

behalf of a child during such year is not shown, and may not

reasonably be inferred from competent evidence, it is not possi-

ble to find that the taxpayer contributed more than one-half of

such child’s total support. Id. at 514-515; Fitzner v. Commis-

sioner, 31 T.C. 1252, 1255 (1959).

Petitioner failed to maintain any records establishing
 - 10 -

(1) the amount of total support incurred on behalf of A during

2003 and (2) the amount of such support that he provided to A

during that year. During 2003, petitioner, who was a plumber,

had total income and adjusted gross income of $15,349. Ms. Wus

received public assistance from the State of Delaware for the

benefit of A. Moreover, A received healthcare benefits under

Medicaid, and not from petitioner. Although for the period

January 2 through March 31, 2003, both petitioner and Ms. Wus

made payments toward the cost of providing A’s daycare, the

record is devoid of evidence establishing the total amount of

such payments or the amount of such payments that petitioner

made. In addition, Ms. Srase, who usually babysat A approxi-

mately two to three times a week during 2003, often provided food

to A at Ms. Srase’s own expense. Finally, as discussed above,

although petitioner claims that A lived with him during all of

2003 except November and December of that year, his claim is not

supported by evidence that we consider to be reliable.

On the record before us, we find that petitioner has failed

to carry his burden of establishing that he is entitled for his

taxable year 2003 to a dependency exemption deduction for his

daughter A.

Claimed Head of Household Filing Status

Section 1(b) provides a special tax rate for any individual

who qualifies as head of a household. As pertinent here, the
 - 11 -

term “head of household” is defined in section 2(b) as an unmar-

ried individual who maintains as his home a household that

constitutes for more than one-half of the taxable year the

principal place of abode for, inter alia, a daughter. Sec.

2(b)(1)(A). An individual is considered as maintaining a house-

hold only if such individual provided over one-half of the cost

of maintaining the household during the taxable year. Sec. 2(b).

We find that the record is devoid of evidence that we

consider to be reliable supporting petitioner’s position that

during his taxable year 2003 he maintained as his home a house-

hold that constituted the principal place of abode, as a member

of such household, of his daughter A for more than one-half of

that year.

On the record before us, we find that petitioner has failed

to carry his burden of establishing that he is entitled for his

taxable year 2003 to head of household filing status.

Claimed Earned Income Tax Credit

Section 32(a)(1) permits an eligible individual an earned

income credit against such individual’s tax liability. The

earned income tax credit is calculated as a percentage of the

individual’s earned income. Sec. 32(a)(1). Section 32(a)(2)

limits the credit allowed. Section 32(b) prescribes different

percentages and amounts that are to be used to calculate the

credit depending on whether the eligible individual has no
 - 12 -

qualifying children, one qualifying child, or two or more quali-

fying children.

As pertinent here, section 32(c)(1)(A)(i) defines the term

“eligible individual” to mean “any individual who has a qualify-

ing child for the taxable year”. The term “qualifying child”

with respect to any taxpayer for any taxable year includes a

daughter of the taxpayer who has the “same principal place of

abode as the taxpayer for more than one-half of such taxable

year”. Sec. 32(c)(3)(A)(i) and (ii) and (B)(i)(I).

It is petitioner’s position that his daughter A is a quali-

fying child for purposes of the earned income tax credit because

she had the same principal place of abode as petitioner for more

than one-half of his taxable year 2003. We found above that

petitioner failed to show that for his taxable year 2003 he

maintained as his home a household that constituted the principal

place of abode, as a member of such household, of his daughter A

for more than one-half of that year. On the record before us, we

find that petitioner has failed to carry his burden of showing

that for his taxable year 2003 A is a qualifying child for

purposes of the earned income tax credit.4

4
Petitioner does not claim that he is entitled to the earned
income tax credit under sec. 32(c)(1)(A)(ii). That section
provides that a taxpayer with no qualifying child may nonetheless
be eligible for the earned income tax credit, subject to the
phase out limitations of sec. 32(a)(2), provided that the re-
quirements of sec. 32(c)(1)(A)(ii) are satisfied. For taxable
(continued...)
 - 13 -

On the record before us, we find that petitioner has failed

to carry his burden of establishing that he is entitled for his

taxable year 2003 to the earned income tax credit.

Claimed Child Tax Credit

Section 24(a) allows a tax credit of a specified amount with

respect to each qualifying child of a taxpayer. The amount of

the credit allowable under section 24(a) is limited by the

taxpayer’s adjusted gross income and may not exceed a taxpayer’s

regular tax liability. Sec. 24(b). As pertinent here, for

purposes of section 24, the term “qualifying child” means a

taxpayer’s daughter for whom the taxpayer is entitled under

section 151 to a dependency exemption deduction and who has not

attained the age of 17 as of the close of the taxable year. Sec.

24(c)(1).

We found above that petitioner failed to show that he is

entitled for his taxable year 2003 to a dependency exemption

deduction for his daughter A. On the record before us, we find

that petitioner has failed to carry his burden of showing that

for his taxable year 2003 A is a qualifying child for purposes of

the child tax credit.

4
(...continued)
year 2003, the earned income tax credit is completely phased out
if the individual who has no qualifying children and who is not
married filing jointly has adjusted gross income that equals or
exceeds $11,230. See sec. 32(b)(1)(A) and (2); Rev. Proc. 2002-
70, 2002-2 C.B. 845, 847-848. The parties agree that petitioner
has adjusted gross income of $15,349 for his taxable year 2003.
 - 14 -

On the record before us, we find that petitioner has failed

to carry his burden of establishing that he is entitled for his

taxable year 2003 to the child tax credit.

Claimed Additional Child Tax Credit

Where a taxpayer is eligible for a child tax credit, but

such taxpayer’s regular tax liability is less than the amount of

the child tax credit potentially available to such taxpayer, the

taxpayer will be entitled to a refundable credit known as an

additional child tax credit if certain requirements are met.

Sec. 24(d). We found above that petitioner failed to show that

he is entitled for his taxable year 2003 to the child tax credit.

On the record before us, we find that petitioner has failed

to carry his burden of establishing that he is entitled for his

taxable year 2003 to the additional child tax credit.

To reflect the foregoing,

Decision will be entered for

respondent.