T.C. Summary Opinion 2006-180
UNITED STATES TAX COURT
JERRY JEFFERSON KIRKEBY AND YING WANG, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 21371-05S. Filed November 6, 2006.
Jerry Jefferson Kirkeby and Ying Wang, pro sese.
Jonathan A. Neumann, 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, subsequent section references are to
the Internal Revenue Code as in effect for the year at 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 petitioners’ Federal
income tax of $1,058 for 2003. The issues for decision are
whether petitioners are entitled to claim: (1) A dependency
exemption deduction, and (2) a child tax credit.
Background
The stipulation of facts and the exhibits received into
evidence are incorporated herein by reference. At the time the
petition in this case was filed, petitioners resided in Santa
Rosa, California.
Petitioner Ying Wang (Ms. Wang) and James Hammer (Mr.
Hammer) are the biological parents of JJH.1 Ms. Wang and Mr.
Hammer divorced around 1989, and Ms. Wang was awarded custody of
JJH. JJH has lived with Ms. Wang at all times since the divorce.
Petitioners filed a Form 1040, U.S. Individual Income Tax
Return, for 2003, claiming for JJH a dependency exemption
deduction and a child tax credit. Respondent issued to
petitioners a statutory notice of deficiency, determining that
they are not entitled to claim JJH as a dependent because Ms.
Wang executed a Form 8332, Release of Claim to Exemption for
Child of Divorced or Separated Parents, in favor of Mr. Hammer
for 1988 and all years thereafter.
1
The Court will refer to the minor child by her initials.
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Discussion
The Commissioner’s determinations are presumed correct, and
generally taxpayers bear the burden of proving otherwise.2 Rule
142(a)(1); Welch v. Helvering, 290 U.S. 111, 115 (1933).
Dependency Exemption
Section 151(c)(1) allows a taxpayer to claim an exemption
deduction for each qualifying dependent. A child of the taxpayer
is considered a “dependent” so long as the child has not attained
the age of 19 at the close of the calendar year in which the
taxable year of the taxpayer begins and more than half the
child’s support for the taxable year was received from the
taxpayer. Secs. 151(c)(1)(B), 152(a)(1). The age limit is
increased to 24 if the child is a student as defined by section
151(c)(4). Sec. 151(c)(1)(B).
In the case of a child whose parents are divorced or legally
separated and together provide over half of the support for the
child, section 152(e)(1) provides that the parent having custody
for a greater portion of the calendar year (custodial parent)
generally shall be treated as providing over half of the support
for the child. A noncustodial parent may be treated as providing
2
Petitioners have not raised the issue of sec. 7491(a),
which shifts the burden of proof to the Commissioner in certain
situations. This Court concludes that sec. 7491 does not apply
because petitioners have not produced any evidence that
establishes the preconditions for its application.
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over half of the support if the requirements under section
152(e)(2) are satisfied. Section 152(e)(2) provides:
(2) Exception where custodial parent releases
claim to exemption for the year.--A child * * * 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.
To release a claim to a dependency exemption deduction
properly, the custodial parent must sign a written declaration
with an express statement that such custodial parent will not
claim that child as a dependent. Sec. 152(e)(2); Miller v.
Commissioner, 114 T.C. 184, 190-191 (2000); Bramante v.
Commissioner, T.C. Memo. 2002-228. A validly executed Form 8332
satisfies the written declaration requirement. King v.
Commissioner, 121 T.C. 245, 249 (2003); Brissett v. Commissioner,
T.C. Memo. 2003-310.
It is not disputed that Ms. Wang was the custodial parent of
JJH during 2003. Respondent argues that petitioners are not
entitled to claim JJH as a dependent because Ms. Wang executed a
Form 8332 in favor of Mr. Hammer. In the Form 8332, Ms. Wang
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agreed not to claim an exemption for JJH for 1988 and “all future
years”.
Ms. Wang argues that the Form 8332 is not a valid release
because it is “fraudulent”, and she could not recall signing the
form. Ms. Wang nevertheless admitted at trial that she
recognized the signature on the Form 8332 as hers. Ms. Wang
further argues that even if she had signed the Form 8332, Mr.
Hammer took advantage of her minimal command of English and
deceived her as to the legal consequences of signing the form.
She noted that the Form 8332 contained several different
handwritings and suggested an inference that the form was blank
at the time she signed it, and the remaining information was
filled in by Mr. Hammer at a later time.
The signature of the custodial parent confirms the custodial
parent’s intention to release the dependency exemption to the
noncustodial parent and signifies an agreement not to claim the
dependency exemption. Miller v. Commissioner, supra at 193.
By signing the form, Ms. Wang affirmatively consented to the
release of the dependency exemption deduction for JJH to Mr.
Hammer. Even if the Form 8332 contained different handwritings,
without more, they fail to support one way or the other what Ms.
Wang’s intent was at the time she signed the form. Petitioners
have the burden of proof, and they have failed to offer any other
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evidence to show that Ms. Wang did not have the intent to release
her right to claim JJH as a dependent.
Ms. Wang had a duty to make the appropriate inquiries before
she signed the Form 8332 permanently releasing her claim to
exemption deductions for JJH. See King v. Commissioner, supra at
253. The Court will not ignore the properly executed form. For
section 152(e) to operate as intended by Congress, strict
adherence to the requirements of section 152(e) must be observed.
Miller v. Commissioner, supra at 196; Bramante v. Commissioner,
supra; Cafarelli v. Commissioner, T.C. Memo. 1994-265.
Therefore, petitioners are not entitled to claim for 2003 a
dependency exemption deduction for JJH under section 151.
Child Tax Credit
Section 24(a) authorizes a child tax credit with respect to
each qualifying child of the taxpayer. The term “qualifying
child” is defined in section 24(c). A “qualifying child” means
an individual with respect to whom the taxpayer is allowed a
deduction under section 151, who has not attained the age of 17
as of the close of the taxable year and who bears a relationship
to the taxpayer as prescribed by section 32(c)(3)(B). Sec.
24(c)(1).
Since petitioners are not allowed a deduction with respect
to JJH as a dependent under section 151, JJH is not a qualifying
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child. In the absence of a qualifying child in 2003, petitioners
are not entitled to claim a child tax credit.
Reviewed and adopted as the report of the Small Tax Case
Division.
To reflect the foregoing,
Decision will be entered
for respondent.