T.C. Summary Opinion 2006-103
UNITED STATES TAX COURT
ELLA M. ROYSTER, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 20407-03S. Filed July 12, 2006.
Ella M. Royster, pro se.
Aaron Gregory, for respondent.
WELLS, 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. All subsequent section references are to
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the Internal Revenue Code in effect for the years in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
Respondent determined deficiencies in petitioner’s Federal
income taxes of $4,898 and $5,306 for 2001 and 2002,
respectively. The issues we must decide are:
1. Whether petitioner is entitled to head of household
filing status for taxable years 2001 and 2002;
2. whether petitioner is entitled to claim two dependency
exemption deductions for her minor children for taxable years
2001 and 2002;
3. whether petitioner is entitled to claim the earned
income credit as an individual with two qualifying children for
taxable years 2001 and 2002; and
4. whether petitioner is entitled to claim the child tax
credit and the additional child tax credit for taxable years 2001
and 2002.
Background
At the time of filing the petition, petitioner resided in
Chesapeake, Virginia. Petitioner and Kenneth D. Royster, Sr.
(Mr. Royster), were married on February 25, 1989, and had two
children during their marriage. The couple separated during
March 1997. On May 29, 1998, the Juvenile and Domestic Relations
District Court for the City of Chesapeake, Virginia, issued an
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order granting primary physical custody of the two children to
Mr. Royster and liberal visitation to petitioner.1 Petitioner
and Mr. Royster were divorced on March 30, 2002. The divorce
decree ordered petitioner to pay Mr. Royster $278.48 per month
for child support.
Petitioner timely filed Forms 1040, U.S. Individual Income
Tax Return, for taxable years 2001 and 2002. On her 2001 and
2002 returns, petitioner filed as a head of household and claimed
two dependency exemptions for her two minor children, the earned
income credit, and the additional child tax credit. On her 2002
return, petitioner also claimed the child tax credit. Petitioner
did not attach to either return a Form 8332, Release of Claim to
Exemption for Child of Divorced or Separated Parents, or other
written declaration by Mr. Royster.
Respondent determined that petitioner was not eligible for
head of household filing status because her children did not live
with her for over half of each taxable year in issue, and that
she was not eligible for any of the other claimed exemptions and
credits. Accordingly, respondent determined a $4,8982 deficiency
1
According to the May 29, 1998, order, liberal visitation
includes every other weekend and every other holiday.
2
The Form 4549, Income Tax Examination Changes, attached to
the notice of deficiency for taxable year 2001 shows that
respondent applied a $4,489 overpayment from a subsequent tax
year against petitioner’s 2001 deficiency.
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in tax for petitioner’s 2001 taxable year and a $5,3063
deficiency in tax for petitioner’s 2002 taxable year and sent
petitioner notices of deficiency on September 26 and August 22,
2003, respectively. Petitioner timely petitioned this Court,
denying that she owed the deficiencies in taxes and requesting
the refund of overpayments from subsequent tax years which
respondent had used to offset her 2001 and 2002 tax liabilities.
Discussion
As a general rule, the Commissioner’s determinations in the
notice of deficiency are presumed correct and the burden of
proving an error is on the taxpayer.4 Rule 142(a); Welch v.
Helvering, 290 U.S. 111, 115 (1933).
Custody is determined by the most recent divorce or custody
decree. Sec. 1.152-4(b), Income Tax Regs. A noncustodial parent
may be entitled to a dependency exemption deduction under section
151 if the noncustodial parent attaches to his or her tax return
3
The amount stated in the notice of deficiency for taxable
year 2002 was based on respondent’s determination that
petitioner’s correct filing status was married filing separately.
Respondent now concedes that petitioner’s correct filing status
is single and that the correct amount of the deficiency for
taxable year 2002 is $5,186.
The Form 4549, Income Tax Examination Changes, attached to
the notice of deficiency for taxable year 2002 shows that
respondent applied a $4,027 overpayment from a subsequent tax
year against petitioner’s 2002 deficiency.
4
Sec. 7491(a)(1) does not apply in the instant case because
petitioner did not comply with the substantiation and document
production requirements. See sec. 7491(a)(2).
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a Form 8332 or similar written declaration, signed by the
custodial parent, stating that the custodial parent will not
claim the child as a dependent for the calendar year. Sec.
152(e)(2); Miller v. Commissioner, 114 T.C. 184 (2000). The
divorce decree incorporated the May 29, 1998, custody order that
granted primary physical custody to Mr. Royster. Petitioner, as
the noncustodial parent, did not attach to her 2001 or 2002
return a Form 8332 or similar written declaration by Mr. Royster
stating that he would not claim the children as dependents.
Accordingly, we hold petitioner is not entitled to dependency
exemption deductions for her children for taxable years 2001 and
2002.
In general, in order to qualify for head of household filing
status, the earned income credit, the child tax credit, and the
additional child tax credit, the taxpayer must show that she was
entitled to a dependency exemption deduction for her child and/or
the child lived with the taxpayer for over half of the taxable
year. See secs. (2)(b)(1)(A), 32(a), (c), 24(a), (c).
Petitioner did not provide credible evidence that her children
lived with her for over half of each taxable year in issue5, and,
as noted above, petitioner is not entitled to dependency
exemption deductions for her children for each taxable year in
5
At trial, petitioner admitted that she did not have any
evidence proving that her children lived with her for over half
of each year in issue.
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issue. Accordingly, we hold petitioner is not entitled to file
as a head of household or claim the earned income credit, the
child tax credit, and the additional child tax credit for taxable
years 2001 and 2002.
To reflect the foregoing,
Decision will be entered
for respondent.