T.C. Memo. 2007-239
UNITED STATES TAX COURT
JAMES C. HARRIS, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 5028-06. Filed August 22, 2007.
James C. Harris, pro se.
Donald E. Edwards, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
GOEKE, Judge: Respondent determined a $1,363 deficiency in
petitioner’s Federal income tax for the taxable year 2003. The
issue for decision is whether petitioner is entitled to claim a
dependency exemption and a child tax credit for his minor child
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for the taxable year 2003, pursuant to sections 1511 and 24,
respectively. We hold that petitioner is not entitled to claim
the dependency exemption or the child tax credit, because (1)
petitioner is not the child’s custodial parent pursuant to
section 152(e); (2) petitioner’s ex-spouse did not release her
claim to the dependency exemption for their minor child for the
taxable year in question; and (3) petitioner’s claim that section
152 violates the Equal Protection Clause of the 14th Amendment to
the Constitution is without merit.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts and accompanying exhibits are
incorporated herein by this reference. At the time of his
petition, petitioner resided in Newalla, Oklahoma.
Petitioner was divorced from his ex-spouse in December 1997.
Petitioner and his ex-spouse had two children by their marriage,
one of whom was still a minor during the taxable year 2003. The
terms of the divorce decree granted custody of both children to
petitioner’s ex-spouse, subject to petitioner’s rights of
visitation. It further established that petitioner would pay
76.6 percent of the child support for both children, based on the
1
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the year in issue.
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child support guideline computation for the State of Oklahoma.
In the calendar year 2003, both children resided with petitioner
for 139 days and with their mother for 226 days.
Petitioner claimed a dependency exemption and child tax
credit for his minor child on his Federal income tax return for
the taxable year 2003. Petitioner’s ex-spouse did not sign an
Internal Revenue Service (IRS) Form 8332, Release of Claim to
Exemption for Child of Divorced or Separated Parents, for the
taxable year 2003. Petitioner did not affix any other written
declaration to his 2003 Federal income tax return that conformed
to the substance of a Form 8332.
In December 2005, respondent issued a $1,363 notice of
deficiency to petitioner with respect to the dependency exemption
and child tax credit claimed for the taxable year 2003.
Petitioner timely petitioned this Court for redetermination.
OPINION
Section 151 provides a tax exemption as a deduction in
computing taxable income for a taxpayer’s dependents. Section
152(a) defines “dependent” to include the son or daughter of a
taxpayer, for whom the taxpayer furnished more than one-half the
support for the calendar year in which the taxable year begins.
Section 24 provides a credit against income tax for each
qualified child of a taxpayer who is under 17 years of age and
for whom the taxpayer may claim a deduction under section 151.
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Sec. 24(c)(1)(A) and (B). Thus, a taxpayer is ineligible for the
child tax credit under section 24 unless he or she is eligible
for the dependency exemption under section 151.
Where the parents of a dependent child are divorced or
legally separated, section 152(e)(1) confers the dependency
exemption onto the parent having custody of the child for the
greater portion of the calendar year (custodial parent). As an
exception to the general rule, a noncustodial parent may claim
the exemption where the custodial parent executes a valid written
declaration releasing his or her claim to the exemption, and the
noncustodial parent attaches that declaration to his or her
Federal income tax return for the taxable year. Sec. 152(e)(2);
sec. 1.152-4T(a), Q&A-3, Temporary Income Tax Regs., 49 Fed. Reg.
34459 (Aug. 31, 1984).
Petitioner does not contend that he complied with the
provisions of section 152 for the taxable year 2003.
Petitioner’s children were in the custody of his ex-spouse for
more than one-half the calendar year; she did not execute a valid
written declaration releasing her claim to the dependency
exemption for the taxable year; and petitioner did not attach
such a declaration to his Federal income tax return. Instead,
petitioner argues that section 152(e) denies noncustodial parents
equal protection under the 14th Amendment to the Constitution by
granting the dependency exemption to a custodial parent by
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default, regardless of the percentage of support furnished by
each parent. Petitioner’s claim is without merit.
All deductions, including dependency exemptions, are allowed
as a matter of legislative grace. New Colonial Ice Co. v.
Helvering, 292 U.S. 435, 440 (1934). Congress has the power to
condition, limit, or deny deductions in arriving at the net
income it chooses to tax. Helvering v. Indep. Life. Ins. Co.,
292 U.S. 371, 381 (1934). Congress may make distinctions among
taxpayers as long as they are not arbitrary or capricious.
Hamilton v. Commissioner, 68 T.C. 603, 608 (1977).
The 14th Amendment to the Constitution of the United States
does not apply to Federal statutes. Labay v. Commissioner, 55
T.C. 6, 14 (1970), affd. 450 F.2d 280 (5th Cir. 1971); Cole v.
Commissioner, T.C. Memo. 1975-144. With regard to Federal
statutes, the Due Process Clause of the 5th Amendment embraces
the principles of the Equal Protection Clause of the 14th
Amendment. Johnson v. Robison, 415 U.S. 361, 364-365 n.4 (1974);
Caputi v. Commissioner, T.C. Memo. 2004-283. Under the Fifth
Amendment, a statutory classification generally is valid if it
bears a rational relation to a legitimate Government interest and
it does not implicate a suspect classification or interfere with
a fundamental right, and legislatures have especially broad
latitude in creating classifications and distinctions in tax
statutes. Regan v. Taxation With Representation of Wash., 461
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U.S. 540, 547 (1983). The rational basis standard dictates that
a statutory provision does not violate equal protection “if any
state of facts rationally justifying it is demonstrated to or
perceived by the courts.” United States v. Md. Savings-Share
Ins. Corp., 400 U.S. 4, 6 (1970). Moreover, a classification
that has some reasonable basis does not violate the Constitution
simply because it “is not made with mathematical nicety, or
because in practice it results in some inequality.” Lindsley v.
Natural Carbonic Gas Co., 220 U.S. 61, 78 (1911); Bryant v.
Commissioner, 72 T.C. 757, 764 (1979). This case does not
involve a fundamental right or suspect class.
Prior to 1984, a noncustodial parent could claim a
dependency exemption pursuant to section 152(e) if he or she
provided $1,200 or more for the support of a child and the
custodial parent could not clearly establish that he or she
provided more support than the noncustodial parent. This
provision required the IRS to wade into disputes between parents
“who both [claimed] the dependency exemption based on providing
support over the applicable thresholds.” H. Rept. 98-432 (Part
1), at 197 (1984). Thus, Congress added the written declaration
requirement to section 152(e) to eliminate the role of the IRS as
mediator between divorced or separated parents, provide more
certainty to the “often subjective and * * * difficult problems
of proof and substantiation” that accompanied dependency
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exemption disputes, and clarify which of two divorced parents
would receive the dependency exemption. Knight v. Commissioner,
T.C. Memo. 1992-710, affd. 29 F.3d 632 (9th Cir. 1994); H. Rept.
98-432 (Part 2), supra at 1498. Because section 152(e) eases the
administrative burden of the IRS and thereby advances enforcement
of the statute in a rational way, it furthers a legitimate
congressional purpose. Knight v. Commissioner, supra.
Therefore, section 152(e) does not violate the Due Process Clause
of the Fifth Amendment to the Constitution of the United States.
Id. Accordingly, we hold that petitioner is not eligible for a
dependency exemption or a child tax credit for the taxable year
2003.
To reflect the foregoing,
Decision will be entered
for respondent.