T.C. Summary Opinion 2008-115
UNITED STATES TAX COURT
CARLOS MARTINEZ OLIVIO, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 311-07S. Filed September 8, 2008.
Carlos Martinez Olivio, pro se.
Steven D. Tillem and Maria T. Stabile, for respondent.
THORNTON, Judge: This case was heard pursuant to the
provisions of section 7463 of the Internal Revenue Code in effect
when the petition was filed.1 Pursuant to section 7463(b), the
decision to be entered is not reviewable by any other court, and
1
Unless otherwise indicated, section references are to the
Internal Revenue Code of 1986, as amended and in effect for the
year at issue, and Rule references are to the Tax Court Rules of
Practice and Procedure.
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this opinion shall not be treated as precedent for any other
case.
Respondent determined a $4,043 deficiency in petitioner’s
2005 Federal income tax. The issues for decision are:
(1) Whether petitioner is entitled to a dependency exemption
deduction for his cousin; (2) whether petitioner is entitled to
an earned income tax credit; and (3) whether petitioner is
entitled to a child tax credit.
Background
The parties have stipulated some facts, which we incorporate
herein. When he petitioned the Court, petitioner resided in New
York.
During 2005 petitioner turned 22 years old. He worked in a
garage in New York City. He lived in an apartment in New York
City with his mother, grandmother, grandfather, sister, and
cousin, M.M.,2 who was 9 years old. M.M.’s parents lived in the
Dominican Republic.
Petitioner was the only one in his household who had a job.
In addition to contributing to the household expenses, petitioner
paid for most of M.M.’s personal expenses including school
supplies, clothing, and a trip to Santo Domingo for the child to
visit his parents.
2
The Court uses initials when referring to a minor child.
Rule 27(a)(3).
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For taxable year 2005 petitioner timely filed his income tax
return as a head of household. Petitioner claimed his mother and
M.M. as dependents and also claimed the earned income tax credit
and the child tax credit.
In the notice of deficiency respondent disallowed both of
petitioner’s claimed dependency exemption deductions, the earned
income credit, and the child tax credit, and determined
petitioner’s filing status to be single rather than head of
household, thus determining a $4,043 deficiency in his 2005
Federal income tax. Before trial respondent conceded the
dependency exemption for petitioner’s mother and also conceded
petitioner’s filing status as head of household.
Discussion
1. Dependency Exemption
A taxpayer is entitled to claim a dependency exemption only
if the claimed dependent is a “qualifying child” or a “qualifying
relative” as defined under section 152(c) and (d). Sec. 152(a).
A qualifying child is defined as the taxpayer’s child,
brother, sister, stepbrother, or stepsister, or a descendant of
any of them. Sec. 152(c)(2). Because he is petitioner’s cousin,
M.M. is not a qualifying child within the meaning of section
152(c)(2).
An individual who is not a qualifying child may still, under
certain conditions, qualify as a dependent if he or she is a
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qualifying relative. Sec. 152(a). Under section 152(d)(1), a
qualifying relative is an individual: (A) Who bears a qualifying
relationship to the taxpayer; (B) whose gross income for the year
is less than the section 151(d) exemption amount ($2,000 for
2005); (C) who receives over one-half of his support from the
taxpayer for the taxable year; and (D) who is not a qualifying
child of the taxpayer or of any other taxpayer for the taxable
year.
Section 152(d)(2) lists eight types of qualifying
relationships, seven of which involve various familial
relationships that do not include cousins. Sec. 152(d)(2)(A)-
(G). The eighth type of qualifying relationship applies to an
individual, other than the taxpayer’s spouse, who has the same
principal place of abode as the taxpayer and is a member of the
taxpayer’s household for the taxable year. Sec. 152(d)(2)(H).
In order for an individual to be considered a member of a
taxpayer’s household, the taxpayer must maintain the household,
and both the taxpayer and the individual must occupy the
household for the entire taxable year. Sec. 1.152-1(b), Income
Tax Regs. A taxpayer maintains a household if he or she
furnishes more than one-half of the household’s expenses. See
sec. 2(b); Rev. Rul. 64-41, 1964-1 C.B. (Part 1) 84.
Respondent has conceded that petitioner qualifies for head
of household status and thereby has effectively conceded that
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petitioner maintained the household for 2005. There is no
dispute that M.M. occupied the household for all of 2005.
Accordingly, M.M. satisfies the qualifying relationship test
pursuant to section 152(d)(2)(H).
In addition, we conclude that petitioner provided over one-
half of M.M.’s support for 2005. As suggested by the previous
discussion, in conceding that petitioner qualifies for head of
household filing status respondent has effectively conceded that
petitioner provided over one-half of the household’s expenses.
M.M., as a member of the household, is considered to have
received an equal part of these contributions as his support.
See De La Garza v. Commissioner, 46 T.C. 446 (1966), affd. per
curiam 378 F.2d 32 (5th Cir. 1967). Moreover, we have found that
petitioner paid for most of M.M’s personal expenses.
Finally, respondent does not contend and the record does not
suggest that M.M.’s income for 2005 was $2,000 or more. As
previously discussed, M.M. was not a qualifying child of
petitioner; respondent does not contend and the record does not
suggest that he was a qualifying child of any other taxpayer for
2005.
We conclude that for 2005 M.M. was a qualifying relative of
petitioner within the meaning of section 152(d) and thus
petitioner’s dependent under section 152(a)(2). Accordingly,
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petitioner is entitled to a dependency exemption deduction for
M.M. for 2005.
2. Earned Income Credit
Section 32(a) permits an “eligible individual” to claim an
earned income credit against his income tax liability. An
eligible individual is defined in section 32(c)(1)(A) as either
(1) any individual who has a qualifying child for the taxable
year, or (2) any other individual who does not have a qualifying
child for the taxable year if the individual’s principal place of
abode is in the United States for more than one-half of the
taxable year, the individual is between 25 and 65 years old
before the end of the taxable year, and the individual is not a
dependent for whom a deduction is allowable under section 151 to
another taxpayer.
As discussed above, petitioner did not have a qualifying
child for taxable year 2005. Moreover, during the year at issue
petitioner turned 22 years old and so did not meet the age
requirement of section 32(c)(1)(A)(ii)(II). Therefore,
petitioner does not qualify for the earned income credit.
Respondent’s determination on this issue is sustained.
3. Child Tax Credit
Section 24(a) allows a tax credit for each qualifying child
of a taxpayer. For this purpose, a qualifying child means an
individual under age 17 who is a qualifying child of the taxpayer
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as defined in section 152(c). Sec. 24(c)(1). As discussed
above, M.M. is not a qualifying child of petitioner under section
152(c). Therefore petitioner is not entitled to the child tax
credit for M.M. for taxable year 2005. Respondent’s
determination on this issue is sustained.
To reflect the foregoing and concessions by respondent,
Decision will be entered
under Rule 155.