T.C. Summary Opinion 2008-47
UNITED STATES TAX COURT
MICHEAL HOLMES, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 25066-06S. Filed April 29, 2008.
Micheal Holmes, pro se.
Julie A. Jebe, 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. Unless otherwise indicated, all section references, and
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all Rule references are to the Internal Revenue Code in effect
for the year in issue.
Respondent determined a deficiency of $2,811 in petitioner’s
Federal income tax for 2005. The issues for decision are:
(1) Whether petitioner is entitled to a dependency exemption
deduction of $3,200;
(2) whether he is entitled to head of household filing
status; and
(3) whether he is entitled to an earned income credit of
$2,662.
Background
Some of the facts have been stipulated, and the stipulated
facts are incorporated in our findings by this reference.
Petitioner resided in Illinois at the time that he filed his
petition.
During 2005, petitioner resided with Angela Tucker, whom he
married in 2006. Ms. Tucker had received legal guardianship over
her nieces, G.F. and T.F., in 2003. Ms. Tucker was unemployed
during 2005, but she received disability payments that year.
Ms. Tucker also received food stamps and cash from the Department
of Child and Family Services to aid her in caring for the
children.
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Petitioner was not related to T.F. or G.F. Petitioner
purchased clothes and groceries for T.F. in 2005 and gave her
spending money for school if she needed it.
Petitioner claimed a dependency exemption of $3,200 for T.F.
on his 2005 return. He also filed his 2005 return reporting head
of household status and claimed an earned income credit of $2,662
for 2005.
Respondent determined that petitioner was not entitled to
the dependency exemption, changed his filing status to single,
and denied him the earned income credit in full. However,
respondent now concedes that petitioner meets the requirements
for the earned income credit as a taxpayer without a qualifying
child and is entitled to an earned income credit of $159 for
2005.
Discussion
The Internal Revenue Code allows as a deduction an exemption
for each dependent of a taxpayer in computing taxable income.
Sec. 151(c). Section 152(a) defines a dependent as a qualifying
child or a qualifying relative of the taxpayer. In addition to
other requirements, a qualifying child must be a child, brother,
sister, stepbrother, stepsister, or a descendant of such
relatives of the taxpayer. Sec. 152(c). A qualifying relative,
however, may be an individual who, for the year in issue, has the
same principal place of abode as the taxpayer and is a member of
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the taxpayer’s household, and for whom the taxpayer provides over
one-half of the support. Sec. 152(d).
Respondent determined that petitioner was not entitled to
the dependency exemption that petitioner claimed for the year in
issue because he did not establish that either T.F. or G.F. was a
qualifying child or qualifying relative. Because T.F. and G.F.
were not petitioner’s children, brothers, sisters, stepbrothers,
stepsisters, or descendants of any of those relatives during the
year in issue, neither was a qualifying child of petitioner for
that year. See sec. 152(c)(2), (f)(1). However, because T.F.
and G.F. were members of petitioner’s household in 2005, T.F. and
G.F. might have been qualifying relatives of petitioner if he
provided over one-half of the support for either child. See sec.
152(d).
Petitioner argues that he is entitled to claim T.F. as his
dependent because he spent his own money to take care of T.F. and
G.F. during 2005. He testified at trial that he purchased food
and clothing for T.F. in 2005 and gave her spending money for
school, but he could not state how much he spent. Although
petitioner’s testimony is credible, he has not shown that he
provided over one-half of T.F.’s support for 2005. Ms. Tucker
received disability income and food stamps and payments to be
used in providing for the children. Petitioner did not provide
any receipts or other substantiation showing the respective
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contributions to the support of T.F. Thus, he is not entitled to
claim T.F. as his dependent for 2005. See sec. 152(d)(1)(C);
Blanco v. Commissioner, 56 T.C. 512, 514-515 (1971).
Respondent also determined that petitioner’s correct filing
status for 2005 was single rather than head of household.
Section 1(b) establishes a special income tax rate for
individuals filing as head of a household. Section 2(b) provides
the requirements for head of household filing status. In order
to qualify as head of a household, petitioner must have been
unmarried at the end of 2005 and maintained a household that was
the principal place of abode of at least one dependent for more
than one-half of the taxable year. Sec. 2(b)(1)(A)(ii). A
taxpayer is considered as maintaining a household in a given year
only if the taxpayer furnishes over one-half of the cost of
maintaining the household during that year. Sec. 2(b).
Because T.F. was not a dependent of petitioner in 2005 and
petitioner has not shown that he furnished over one-half the cost
of maintaining the household in which he, Ms. Tucker, T.F., and
G.F. resided, petitioner is not entitled to head of household
filing status.
Section 32(a)(1) allows an eligible individual an earned
income credit against the individual’s income tax liability.
Section 32(a)(2) limits the credit allowed through a phaseout,
and section 32(b) prescribes different percentages and amounts
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used to calculate the credit. The limitation amount is based on
the taxpayer’s earned income and whether the taxpayer has any
qualifying children. To be eligible to claim a higher earned
income credit with respect to a child, the taxpayer must
establish that the child meets the definition of “qualifying
child” under section 152(c). Sec. 32(c)(3)(A). Because, for the
reasons stated above, neither T.F. nor G.F. was a qualifying
child of petitioner during the year in issue, his earned income
credit is limited to the amount respondent has conceded.
To reflect the foregoing,
Decision will be entered
under Rule 155.