T.C. Summary Opinion 2007-153
UNITED STATES TAX COURT
SEAN MICHAEL BEARS AND GRETA BEARS, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 11980-06S. Filed September 5, 2007.
Sean Michael Bears and Greta Bears, pro sese.
Micheal J. Proto, for respondent.
DEAN, Special Trial Judge: This case was heard pursuant to
the provisions of section 7463 of the Internal Revenue Code in
effect at the time that the petition was filed. 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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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 $1,465 deficiency in petitioners’
2004 Federal income tax. The issues for decision are whether
petitioners are entitled to a: (1) Dependency exemption
deduction; and (2) $1,000 child tax credit.
Background
Some of the facts have been stipulated and are so found.
The stipulation of facts and the exhibits received into evidence
are incorporated herein by reference. At the time the petition
was filed, Sean Michael Bears (petitioner) resided in Pawtucket,
Rhode Island, and Greta Bears resided in Methuen, Massachusetts.
Petitioner fathered a child with Kristen Mutter Rodenbaugh
(child’s mother). A Judgment of Support was rendered by the
Probate Family Court Department of the Commonwealth of
Massachusetts. Petitioner was ordered to pay $156 per week as
child support. He was also required to secure and maintain
health care coverage for his child. And if he was current on his
obligations, “he may take the child as his dependent for state
and federal income tax purposes.”
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Petitioners filed a joint Federal income tax return for
2004. On the return, petitioners claimed a dependency exemption
deduction and a $1,000 child tax credit. Petitioners did not
attach a Form 8332, Release of Claim to Exemption for Child of
Divorced or Separated Parents, or its equivalent to their return.
At the time they filed their return, petitioners were unaware
that they were required to attach Form 8332 or its equivalent to
the return.
Respondent issued a notice of deficiency to petitioners.
Respondent denied petitioners’ dependency exemption deduction and
the $1,000 child tax credit since petitioners did not attach a
Form 8332 or its equivalent to the return. The denials resulted
in a $1,465 deficiency. Respondent does not dispute that
petitioner has satisfied the conditions of the Judgment of
Support.
Discussion
Respondent urges us to sustain the disallowance of
petitioners’ dependency exemption deduction and the $1,000 child
tax credit because petitioners did not attach Form 8332 or its
equivalent to their 2004 joint Federal income tax return as
required by section 152(e)(2) and section 1.152-4T(a), Q&A-3,
Temporary Income Tax Regs., 49 Fed. Reg. 34459 (Aug. 31, 1984).
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The Commissioner’s determinations in a notice of deficiency
are presumed correct, and the burden of proof is on the taxpayer
to prove that the determinations are in error. Rule 142(a);
Welch v. Helvering, 290 U.S. 111, 115 (1933). Pursuant, however,
to section 7491(a)(1), the burden of proof on factual issues that
affect a taxpayer’s tax liability may be shifted to the
Commissioner where the “taxpayer introduces credible evidence
with respect to * * * such issue”. In this case, there is no
dispute as to any factual issue. Accordingly, the case is
decided by the application of law to the undisputed facts, and
section 7491(a) is inapplicable.
1. Dependency Exemption Deduction
Section 151(c), in pertinent part, allows a taxpayer to
claim as a deduction the exemption amount for each individual who
is a “dependent” of the taxpayer as defined in section 152, and
who is the taxpayer’s child and satisfies certain age
requirements.
Section 152(a) defines “dependent”, in pertinent part, to
include a “son or daughter of the taxpayer” over half of whose
support is received from the taxpayer for the calendar year in
which the taxable year of the taxpayer begins, or is treated
under section 152(c) or (e) as received from the taxpayer.
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Section 152(e)(1)1 provides a general rule that limits the
dependency exemption deduction as follows: If the child received
over half of his support during the calendar year from his
parents who lived apart at all times during the last 6 months of
the calendar year and is in the custody of one or both parents
for more than one-half of the calendar year, then the child is
treated as receiving over half of his support during the calendar
year from the parent having custody for a greater portion of the
calendar year (the custodial parent).2
But section 152(e)(2) provides an exception to the general
rule of section 152(e)(1): “If * * * the custodial parent signs
a written declaration (in such manner and form as the Secretary
may by regulations prescribe)” that he will not claim the child
as a dependent and the noncustodial parent attaches the written
declaration to his return for the taxable year, then the
noncustodial parent is entitled to the dependency exemption
1
Sec. 152(e)(1) applies to both married parents and parents
who have never been married to each other. King v. Commissioner,
121 T.C. 245, 251 (2003).
2
In the present case, the exceptions in sec. 152(e)(3) and
(4) do not apply. There was no multiple support agreement as
defined in sec. 152(c) and, since the Judgment of Support was
entered in 2001, there is no pre-1985 instrument. Thus,
petitioner is entitled to the dependency exemption only if the
requirements of sec. 152(e)(2) are met.
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deduction. For purposes of section 152(e)(2), the term
“noncustodial parent” means the parent who is not the custodial
parent. Sec. 152(e)(2). The temporary regulation states that a
noncustodial parent may claim the exemption for a dependent child
“only if the noncustodial parent attaches to his/her income tax
return for the year of the exemption a written declaration from
the custodial parent stating that he/she will not claim the child
as a dependent”. Sec. 1.152-4T(a), Q&A-3, Temporary Income Tax
Regs., supra.
The written declaration may be made on a form provided by
the Service or a document that conforms to its substance. Miller
v. Commissioner, 114 T.C. 184, 190-191 (2000) (citing sec. 1.152-
4T(a), Q&A-3, Temporary Income Tax Regs., supra); see also Neal
v. Commissioner, T.C. Memo. 1999-97. The written declaration is
embodied in Form 8332, and it incorporates the requirements of
section 152(e)(2). Miller v. Commissioner, supra at 190.3
In Miller v. Commissioner, supra, the Court stated that in
order for the noncustodial parent to claim the dependency
3
Form 8332 requires a taxpayer to furnish: (1) The names of
the children for which exemption claims were released, (2) the
years for which the claims were released, (3) the signature of
the custodial parent, (4) the custodial parent’s Social Security
number, (5) the date of the custodial parent’s signature, and (6)
the noncustodial parent’s name and Social Security number.
Miller v. Commissioner, 114 T.C. 184, 190 (2000).
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exemption, section 152(e)(2) clearly required the custodial
parent’s release of the dependency exemption by signing a written
declaration to that effect. Id. at 195. Simply attaching to the
return of the noncustodial parent a State court order that was
not signed by the custodial parent did not satisfy the express
statutory requirements of section 152(e)(2). Id. at 198. The
mere fact that the State court granted the taxpayer the right to
claim the dependency exemption was immaterial because a State
court cannot determine issues of Federal tax law. Id. (citing
Kenfield v. United States, 783 F.2d 966, 969 (10th Cir.1986);
White v. Commissioner, T.C. Memo. 1996-438 (citing with approval
Commissioner v. Tower, 327 U.S. 280, 287-288 (1946)).
The parties agree that the child’s mother is the “custodial
parent” as defined in section 152(e)(1). Because petitioners,
the noncustodial parents, did not attach Form 8332 or its
equivalent to their return, they are not entitled to a dependency
exemption deduction. Accordingly, we sustain respondent’s
disallowance of the dependency exemption deduction.
2. Child Tax Credit
Section 24(a) provides a credit against income tax for each
“qualified child” of a taxpayer who is under 17 years of age.
The statutory definition of a “qualified child” is one for whom a
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taxpayer may claim a deduction under section 151. Sec.
24(c)(1)(A). Thus, a taxpayer is ineligible for the child tax
credit under section 24(a) unless the taxpayer is eligible for
the dependency exemption under section 151. Having determined
that petitioners are not entitled to the dependency exemption
deduction, it follows that they are not entitled to the child tax
credit. Accordingly, we sustain respondent’s disallowance of the
child tax credit.
To reflect the foregoing,
Decision will be
entered for respondent.