T.C. Summary Opinion 2007-11
UNITED STATES TAX COURT
JORGE MALIABO BALUMBA, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 5501-06S. Filed January 18, 2007.
Jorge Maliabo Balumba, pro se.
Roger W. Bracken, for respondent.
PANUTHOS, Chief 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.
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Respondent determined a $4,648 deficiency in petitioner’s
2004 Federal income tax. The issues for decision are: (1)
Whether petitioner is entitled to deductions for dependency
exemptions; (2) whether petitioner is entitled to a child tax
credit; (3) whether petitioner qualifies as a head of household;
and (4) whether petitioner is entitled to an earned income
credit.
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. At the time the petition
was filed, petitioner resided in Silver Spring, Maryland.
From January through May 2004, petitioner lived in
Gaithersburg, Maryland, with his mother, his aunt, and six
siblings. Petitioner worked during 2004, as did his mother, his
aunt, and one of his sisters. Petitioner earned $11,015, and his
mother earned approximately $13,000. The record does not
disclose how much petitioner’s aunt or sister earned. The four
family members who worked each contributed toward the family’s
monthly expenses, such as food, clothing, mortgage, and utility
costs.
On or about June 1, 2004, petitioner moved to Washington,
D.C. Petitioner rented a room with his girlfriend, Hafiza
Olatunde, and continued to live there until sometime in 2005.
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Petitioner’s mother, aunt, and siblings remained in Gaithersburg
during this time.
Petitioner filed his 2004 Federal income tax return as a
“head of household”. He also claimed deductions for dependency
exemptions, child tax credits, and an earned income credit with
respect to two of his sisters, FM and MM.1 Respondent issued
petitioner a notice of deficiency in February 2006 denying the
claimed deductions and credits. Respondent also changed
petitioner’s filing status to single.
Discussion
In general, the Commissioner’s determinations set forth in a
notice of deficiency are presumed correct, and the taxpayer bears
the burden of showing that the determinations are in error. Rule
142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). Deductions
and credits are a matter of legislative grace, and the taxpayer
bears the burden of proving entitlement to any deduction or
credit claimed on a return. See INDOPCO, Inc. v. Commissioner,
503 U.S. 79 (1992); Wilson v. Commissioner, T.C. Memo. 2001-139.
Pursuant to section 7491(a), the burden of proof as to
factual matters shifts to the Commissioner under certain
circumstances. Petitioner has neither alleged that section
7491(a) applies nor established his compliance with the
requirements of section 7491(a)(2)(A) and (B) to substantiate
1
The Court uses only the minor children’s initials.
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items, maintain records, and cooperate fully with respondent’s
reasonable requests. Petitioner therefore bears the burden of
proof.
I. Deductions for Dependency Exemptions
A taxpayer may be entitled to claim as a deduction an
exemption amount for each of his or her dependents. Sec. 151(c).
An individual must meet the following five tests in order to
qualify as a dependent of the taxpayer: (1) Support test; (2)
relationship or household test; (3) citizenship or residency
test; (4) gross income test; and (5) joint return test. Secs.
151 and 152. If the individual fails any of these tests, he or
she does not qualify as a dependent.
For a claimed dependent to satisfy the support test a
taxpayer generally must provide more than half of the claimed
dependent’s support for the calendar year in which the taxable
year of the taxpayer begins. Sec. 152(a). The taxpayer must
initially demonstrate, by competent evidence, the total amount of
the support furnished by all sources for the taxable year at
issue. Blanco v. Commissioner, 56 T.C. 512, 514 (1971); Cotton
v. Commissioner, T.C. Memo. 2000-333. If the total amount of
support is not established, then it is generally not possible to
conclude that the taxpayer provided more than half of the support
to the claimed dependent. Blanco v. Commissioner, supra at 514-
515; Cotton v. Commissioner, supra. Support includes “food,
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shelter, clothing, medical and dental care, education, and the
like.” Sec. 1.152-1(a)(2)(i), Income Tax Regs.
Petitioner credibly testified that he contributed money
toward his family’s expenses. Petitioner failed, however, to
establish the total amount of support that FM and MM received in
2004 or the amount of support that he provided. Accordingly,
petitioner has not demonstrated that he provided more than half
of FM’s or MM’s support. See Blanco v. Commissioner, supra at
514-515.
Petitioner contends that he and his mother agreed that
petitioner would be financially responsible for FM and MM.
Petitioner therefore believes he should be able to claim FM and
MM as dependents. Although it is not entirely clear, petitioner
may be arguing that there was a multiple support agreement with
respect to FM and MM.
Section 152(c) provides:
SEC. 152(c). Multiple Support Agreements.--For
purposes of subsection (a), over half of the support of
an individual for a calendar year shall be treated as
received from the taxpayer if—
(1) no one person contributed over half of
such support;
(2) over half of such support was received
from persons each of whom, but for the fact that
he did not contribute over half of such support,
would have been entitled to claim such individual
as a dependent for a taxable year beginning in
such calendar year;
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(3) the taxpayer contributed over 10 percent
of such support; and
(4) each person described in paragraph (2)
(other than the taxpayer) who contributed over 10
percent of such support files a written
declaration (in such manner and form as the
Secretary may by regulations prescribe) that he
will not claim such individual as a dependent for
any taxable year beginning in such calendar year.
Petitioner has failed to demonstrate that no one person
contributed over half of the support for FM or MM in 2004.
Furthermore, neither petitioner’s mother nor any other member of
his family filed a written declaration allowing petitioner to
claim FM or MM as a dependent. Accordingly, we conclude there
was no multiple support agreement with respect to FM or MM. See
sec. 152(c)(1), (4). Petitioner therefore is not entitled to the
claimed deductions, and respondent’s determination is sustained.
II. Child Tax Credits
Section 24(a) provides for a “credit against the tax * * *
for the taxable year with respect to each qualifying child of the
taxpayer”. The term “qualifying child” means any individual if
three requirements are met, one of which is that the taxpayer be
allowed a deduction under section 151 with respect to such
individual for the taxable year. Sec. 24(c)(1). Because we
conclude that petitioner is not entitled to a dependency
exemption deduction with respect to FM or MM, they are not
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qualifying children and petitioner is not entitled to child tax
credits. Respondent’s determination is sustained.
III. Head of Household
Section 1(b) imposes a special income tax rate on a taxpayer
filing as head of household. To qualify as a head of household
the taxpayer must, inter alia, maintain as his or her home a
household that is the principal place of abode for an individual
who qualifies as the taxpayer’s dependent under section 151.
Sec. 2(b)(1)(A)(ii); Toney v. Commissioner, T.C. Memo. 2004-165.
Because we conclude that neither FM nor MM qualifies as
petitioner’s dependent under section 151, he is not entitled to
head-of-household filing status. Respondent’s determination is
sustained.
IV. Earned Income Credit
Subject to limitations, an eligible individual is allowed a
credit which is calculated as a percentage of the individual’s
earned income. Sec. 32(a)(1). Section 32(c)(1)(A)(i), in
pertinent part, defines an “eligible individual” as “any
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).
To satisfy the residency test, the individual must have the
same principal place of abode as the taxpayer for more than one-
half of the taxable year. Sec. 32(c)(3)(A)(ii). As mentioned
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above, petitioner resided with Ms. Olatunde in Washington, D.C.,
for the last 7 months of 2004. Accordingly, petitioner’s
residence was not FM’s or MM’s principal place of abode for more
than one-half of the taxable year. Petitioner therefore is not
entitled to an earned income credit, and respondent’s
determination is sustained.
Reviewed and adopted as the report of the Small Tax Case
Division.
To reflect the foregoing,
Decision will be entered for
respondent.