T.C. Summary Opinion 2007-211
UNITED STATES TAX COURT
PAUL MARCILLESE SHELTON AND FELICIA LAVERNE GRAHAM, Petitioners
v. COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 18901-05S. Filed December 17, 2007.
Paul Marcillese Shelton and Felicia Laverne Graham, pro se.
Melinda K. Fisher, for respondent.
COHEN, Judge: This case was heard pursuant to the
provisions of section 7463 of the Internal Revenue Code in effect
when the petition 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. The trial was conducted by Special Trial Judge Carleton D.
Powell, who died after the case was submitted. The parties have
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declined the opportunity for a new trial or for supplementation
of the record, and the case has, therefore, been reassigned for
opinion and decision. 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.
Respondent determined a deficiency of $4,230 in petitioners’
Federal income tax for 2003. After concessions by respondent,
the issues for decision are whether petitioners are entitled to
claim a dependency exemption deduction for one child of Paul
Marcillese Shelton (petitioner) by a prior marriage to Tanya
Clark (Clark) and whether petitioners are entitled to a child tax
credit with respect to that child.
Background
All of the material facts have been stipulated. Petitioners
resided in Maryland at the time they filed their petition.
Petitioner was previously married to Clark, with whom he has
a daughter. On July 26, 1993, the Circuit Court for Prince
George’s County, Maryland, issued a consent order awarding sole
custody of the child to Clark but permitting petitioner to claim
the child as a dependent for personal Federal income tax purposes
for as long as petitioner complied with timely payments of child
support. The consent order also requires Clark, if requested, to
execute any waivers necessary to effect the provision for the
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dependency exemption if child support obligations have been met.
The consent order mentions the names of petitioner, Clark, and
their child, but does not contain any Social Security numbers.
It does not mention the years for which any dependency exemption
is purportedly waived. The consent order is signed by Clark’s
and petitioner’s respective attorneys and by the judge presiding
over their divorce case. It is not signed by Clark or
petitioner.
Petitioner was compliant in paying his child support
obligations during the year in issue. Although petitioner
requested that Clark execute a specific waiver to allow
petitioner to claim the child as his dependent, Clark refused to
sign a waiver as required by the consent order. Petitioners
claimed a dependency exemption deduction and child tax credit
with respect to petitioner’s child by Clark as well as dependency
exemption deductions and child tax credits with respect to
petitioners’ other three children on their Federal income tax
return for 2003. Petitioners did not attach a copy of the
consent order to their return. Respondent disallowed their
claims with regard to petitioner’s child by Clark because
petitioners failed to attach a Form 8332, Release of Claim to
Exemption for Child of Divorced or Separated Parents, to their
return. Respondent also disallowed in the notice of deficiency
the claimed deductions and credits related to petitioners’ other
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three children due to lack of substantiation, but respondent has
now conceded that petitioners are entitled to a dependency
exemption deduction and child tax credit for each of their other
three children.
Discussion
The Internal Revenue Code allows as a deduction an exemption
for each dependent of a taxpayer in computing taxable income.
Sec. 151(c). A child of a taxpayer is generally a qualified
dependent only if the taxpayer provides over half of the child’s
support during the taxable year. Sec. 152(a). However, section
152(e)(1) limits the dependency exemption where the child’s
parents live apart, as follows:
SEC. 152(e). Support Test in Case of Child of
Divorced Parents, Etc.--
(1) Custodial parent gets exemption.--Except
as otherwise provided in this subsection, if--
(A) a child (as defined in section
151(c)(3)) receives over half of his support
during the calendar year from his parents--
(I) who are divorced or legally
separated under a decree of divorce or
separate maintenance,
(ii) who are separated under a
written separation agreement, or
(iii) who live apart at all times
during the last 6 months of the calendar
year, and
(B) such child is in the custody of one
or both of his parents for more than one-half
of the calendar year,
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such child shall be treated, for purposes of
subsection (a), as receiving over half of his
support during the calendar year from the parent
having custody for a greater portion of the
calendar year (hereinafter in this subsection
referred to as the “custodial parent”).
Petitioner is not the custodial parent of his child by
Clark. His entitlement to the deduction (and related child tax
credit) depends on the applicability of section 152(e)(2), which
provides:
SEC. 152(e). Support Test in Case of Child of
Divorced Parents, Etc.--
* * * * * * *
(2) Exception where custodial parent releases
claim to exemption for the year.–-A child of
parents described in paragraph (1) 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.
For purposes of this subsection, the term
“noncustodial parent” means the parent who is not
the custodial parent.
The form prescribed for the waiver described in section 152(e)(2)
is Form 8332, which form must be executed by the custodial parent
and attached to the Federal income tax return of the noncustodial
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parent in order for the noncustodial parent to receive the
dependency exemption. Miller v. Commissioner, 114 T.C. 184, 190-
191 (2000), affd. sub nom. Lovejoy v. Commissioner, 293 F.3d 1208
(10th Cir. 2002).
Petitioners did not attach the required waiver form to their
2003 Federal income tax return, and petitioner was not able to
obtain a form executed by Clark. Petitioners argue that the
consent order granting the dependency exemption to petitioner is
sufficient to substitute for Form 8332 and to permit them to take
the deduction and the related child tax credit. Regulations
promulgated with respect to section 152(e) as amended provide
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 for the taxable year beginning
in such calendar year.” Sec. 1.152-4T(a), Q&A-3, Temporary
Income Tax Regs., 49 Fed. Reg. 34459 (Aug. 31, 1984). The
declaration required under section 152(e)(2) must be made either
on a completed Form 8332 or on a statement conforming to the
substance of Form 8332. Miller v. Commissioner, supra.
Form 8332 requires a taxpayer to provide (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
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the custodial parent confirming his or her consent, (4) the
Social Security number of the custodial parent, (5) the date of
the custodial parent’s signature, and (6) the name and the Social
Security number of the parent claiming the exemption. Miller v.
Commissioner, supra.
Although the consent order does state the names of
petitioner, Clark, and their child, it does not contain any of
the other required elements to conform substantially to a waiver
under Form 8332. It does not state the years for which the
exemption is purportedly released or that the exemption is
unequivocally released by the terms of the consent order. It
contains neither Clark’s signature nor the Social Security
numbers of petitioner and Clark.
The release of the dependency exemption in the consent order
is also subject to a stipulation that petitioner fulfill his
child support obligations before Clark would be obligated to
provide a waiver of her right to claim the dependency exemption
for Federal income tax purposes. Petitioner complied with his
child support obligations throughout 2003, and it appears that he
was entitled under the consent order to receive a waiver of
Clark’s right to claim a dependency exemption for that year upon
request. We do not, however, have the jurisdiction to compel
Clark’s compliance with the consent order. Because the consent
order explicitly references Clark’s completion of a waiver at
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some point in the future, it was not intended by the parties to
function as a substitute for the waiver itself and, regardless of
intent, is not sufficient to serve that purpose. See Brissett v.
Commissioner, T.C. Memo. 2003-310.
Because the consent order does not meet the requirements of
section 152(e)(2) and the applicable regulation, it does not
qualify as an effective release of Clark’s entitlement to claim
the dependency exemption for the child. Because petitioners are
not entitled to claim the child as a dependent for Federal income
tax purposes, they do not satisfy the “qualifying child”
requirements of the child tax credit under section 24 with
respect to the child and are not entitled to the child tax credit
claimed with respect to that child for the year in issue. See
sec. 24(c)(1); Smith v. Commissioner, T.C. Memo. 2006-163.
Because of respondent’s concession that petitioners may
claim dependency exemption deductions and associated child tax
credits with respect to petitioners’ other three children,
Decision will be entered
under Rule 155.