T.C. Summary Opinion 2007-134
UNITED STATES TAX COURT
CRAIG BRYANT REDDING, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 21794-05S. Filed August 2, 2007.
Craig Bryant Redding, pro se.
Peggy J. Gartenbaum, Sheila Olaksen, and Georgia Graham
(specially recognized), for respondent.
GOEKE, Judge: This case was heard pursuant to the
provisions of section 74631 in effect at the time the petition
1
Unless otherwise indicated, all 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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was filed. Pursuant to section 7463(b), the decision to be
entered is not reviewable by any other court, and this opinion
shall not be treated as precedent for any other case.
Respondent determined a $3,644 deficiency in petitioner’s
Federal income tax for the taxable year 2004. The issues for
decision are whether, for 2004, petitioner is entitled to (1)
dependency exemptions for two of his fiance’s daughters; (2) head
of household filing status; and (3) an earned income credit
(EIC).
Background
At the time he filed his petition, petitioner resided in the
Bronx, New York, with his fiance, Tawana N. Edwards-Jackson (Ms.
Jackson), and her four children from a previous marriage.
Petitioner and Ms. Jackson have never been married, and
petitioner had not, as of the date of trial, adopted any of Ms.
Jackson’s children.
While living with Ms. Jackson in 2004, petitioner paid 50
percent of the rent for 5 months and 50 percent of the
babysitting costs for two of Ms. Jackson’s children for 5 months.
Petitioner also contributed money for other living expenses, such
as food and cable bills, but did not keep records of these
payments. In return for petitioner’s contributions, Ms. Jackson
agreed to release her claim to dependency exemptions for two of
her children and allow petitioner to claim the exemptions.
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On his 2004 Federal income tax return, petitioner listed Ms.
Jackson’s apartment as his residence, claimed dependency
exemptions and the EIC for two of Ms. Jackson’s children, and
filed using head of household filing status. In September 2005,
respondent issued the notice of deficiency to petitioner with
respect to petitioner’s claimed dependency exemptions, EIC, and
head of household filing status. Petitioner timely petitioned
this Court for redetermination.
Discussion
I. Dependency Exemption
Section 151 provides an exemption in computing taxable
income for each of a taxpayer’s dependents. To qualify as a
“dependent” under section 152, an individual must receive over
one-half of his or her support from the taxpayer for the calendar
year in which the applicable tax year begins. Sec. 152(a). It
is the taxpayer’s burden to establish that he or she furnished
over one-half of the support for the individual for whom the
taxpayer claims the exemption during the taxable year. Fearing
v. Commissioner, 315 F.2d 495, 496 (8th Cir. 1963), affg. T.C.
Memo. 1962-148; Rivers v. Commissioner, 33 T.C. 935 (1960). A
taxpayer claiming a deduction must substantiate the claim by
maintaining records necessary to establish he or she is entitled
to the deduction. Sec. 6001; sec. 1.6001-1(a), (e), Income Tax
Regs.
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Petitioner furnished only one-half of the rent and
babysitting costs for a total of 5 months of 2004 and cannot
substantiate any further contribution to the children’s support.
Accordingly, petitioner failed to carry his burden of proving
that he provided more than one-half of the support for Ms.
Jackson’s children for 2004 and is thus ineligible to claim
dependency exemptions for them under section 151.
II. Head of Household Status
For a taxpayer to use head of household filing status,
section 2(b) requires him or her to maintain a home as the
principal place of abode for his or her unmarried son, stepson,
daughter, or stepdaughter, or any other dependent for whom the
taxpayer is entitled to a deduction under section 151. Ms.
Jackson’s children were not petitioner’s sons, stepsons,
daughters, or stepdaughters during the calendar year 2004. Nor
were they petitioner’s dependents pursuant to section 151,
because petitioner did not furnish over one-half the cost of
maintaining the household during that time. Thus, petitioner is
not entitled to use head of household filing status for 2004.
III. Earned Income Credit
Section 32 allows an eligible individual to claim an EIC
against his or her income for the taxable year. The amount of
the credit is calculated as a percentage of the taxpayer’s earned
income, adjusted each year for inflation. To be an “eligible
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individual” under section 32, a taxpayer must either: (1) Have a
qualifying child as defined in section 32(c)(3); or (2) have
attained age 25 but not attained age 65, not be claimed as a
dependent by another taxpayer within the calendar year, and
maintain his or her principal place of abode within the United
States for more than one-half of the taxable year. Sec.
32(c)(1)(A)(i) and (ii).
Section 32(c)(3) defines “qualifying child” as, inter alia,
one who is below the age of 19, shares his or her principal place
of abode with the taxpayer for more than one-half of the taxable
year, and satisfies the following relationship test:
(B) Relationship test.--
(i) In general.--An individual bears a
relationship to the taxpayer described in this
subparagraph if such individual is–-
(I) a son, daughter, stepson, or
stepdaughter, or a descendant of any such
individual,
(II) a brother, sister, stepbrother, or
stepsister, or a descendant of any such
individual, who the taxpayer cares for
as the taxpayers own child, or
(III) an eligible foster child of the
taxpayer.
Petitioner’s affiliation with Ms. Jackson’s children does not
satisfy the relationship test under section 32(c)(3)(B). Thus,
petitioner is not entitled to claim an EIC for having qualifying
children pursuant to section 32(c).
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Petitioner may, however, be eligible for an EIC if he
attained age 25 but not attained age 65, is not claimed as a
dependent by another taxpayer, and maintained his principal place
of abode within the United States for more than one-half of the
taxable year 2004. Sec. 32(c)(1)(A)(ii).
For the taxable year 2004, individuals without a qualifying
child, whose earned income was below $11,490, were eligible for
the EIC. Rev. Proc. 2003-85, Sec. 3.06(1), 2003-2 C.B. 1184,
1187. Petitioner’s earned income for the taxable year 2004 was
$8,878. The instructions for the 2004 Form 1040, U.S. Individual
Income Tax Return, suggest that petitioner qualifies for a
portion of that year’s EIC as an individual without a qualifying
child.
Accordingly, we sustain respondent’s determinations with
respect to the dependency exemptions and the use of head of
household filing status. However, with regard to the EIC,
petitioner may be entitled to claim a portion of the credit as an
individual without a qualifying child, whose earned income is
less than $11,490.
To reflect the foregoing,
Decision will be entered
under Rule 155.