T.C. Summary Opinion 2009-2
UNITED STATES TAX COURT
REGINA LYNN, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 503-07S. Filed January 6, 2009.
Regina Lynn, pro se.
Charles J. Graves, for respondent.
ARMEN, Special Trial 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
1
Unless otherwise indicated, all subsequent section
references are to the Internal Revenue Code in effect for 2005,
the taxable year at issue, and all Rule references are to the Tax
Court Rules of Practice and Procedure.
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other court, and this opinion shall not be treated as precedent
for any other case.
Respondent determined a deficiency of $5,261 in petitioner’s
Federal income tax for 2005.
The issues for decision are as follows:
(1) Whether petitioner is entitled to dependency exemption
deductions for her adult friend and her adult friend’s
grandchild. We hold that she is not.
(2) Whether petitioner is entitled to an earned income
credit. We hold that she is not.
(3) Whether petitioner is entitled to the additional child
tax credit. We hold that she is not.
(4) Whether petitioner’s filing status is head of household
(as claimed on the return) or single (as determined in the notice
of deficiency). We hold that petitioner’s filing status is
single.
The adjustment made by respondent to the amount of the
standard deduction is a purely mechanical matter that is solely
dependent on petitioner’s proper filing status.
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Background
All of the facts have been stipulated, and they are so
found.2 We incorporate by reference the parties’ stipulation of
facts and attached exhibits.
At the time the petition was filed, petitioner resided in
the State of Kansas.
Petitioner timely filed a Form 1040A, U.S. Individual Income
Tax Return, for 2005. On her return, petitioner listed her
occupation as “custodian” and reported total income (also,
adjusted gross income) of $13,323, all of which was attributable
to wages received from Temporary Employment Corp. of Topeka,
Kansas.
On her return, petitioner claimed dependency exemption
deductions for two individuals, Kim Holter (Ms. Holter), who
petitioner described as her “fosterchild”, and Z.S., who
petitioner also described as her “fosterchild”.3 In actuality,
Ms. Holter is an unrelated friend of petitioner; Ms. Holter, who
was born in 1955, was not determined to be disabled in 2005 by
2
When this case was called from the calendar for trial,
petitioner did not appear, nor was her absence excused. Counsel
for respondent sought to move to dismiss for lack of prosecution.
The Court, however, declined to entertain such a motion because
the parties had previously executed a stipulation of facts.
Essentially, the Court regards this case as one submitted without
trial pursuant to Rule 122(a).
3
The Court identifies minors only by their initials. Rule
27(a)(3). On her return, petitioner identified Z.S. by the
child’s complete name.
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Kansas Social & Rehabilitation Services. Z.S., who was born in
1997, is Ms. Holter’s grandchild; Z.S. is unrelated to petitioner
and has not been legally adopted by her.
Also on her return, petitioner claimed an earned income
credit of $4,400 and an additional child tax credit of $348. In
support of the earned income credit, petitioner attached Schedule
EIC, Earned Income Credit, on which she identified Ms. Holter and
Z.S. as her qualifying children; petitioner also checked the box
indicating that Ms. Holter was “permanently and totally disabled”
during some part of 2005. In support of the additional child tax
credit, petitioner attached Form 8812, Additional Child Tax
Credit; only Z.S. was identified as a qualifying child.
Finally, petitioner filed her return as a head of household
and claimed the standard deduction in the amount consistent with
that filing status.
During 2005, Ms. Holter received $3,222 in food stamps and
$3,156 in cash benefits from the State of Kansas for herself and
Z.S.
During 2005, petitioner paid cash rent of $163 per month.
The balance of her rent, $200 per month, was satisfied by work
performed at the apartment complex.
In the notice of deficiency, respondent disallowed
petitioner’s two dependency exemption deductions, the earned
income credit, and the additional child tax credit; respondent
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also changed petitioner’s filing status to single and adjusted
the amount of the standard deduction accordingly.
Discussion
I. Burden of Proof
We begin by noting that the submission of a case fully
stipulated does not alter the burden of proof, the requirements
otherwise applicable with respect to adducing proof, or the
effect of failure of proof. Rule 122(b).
Generally, the Commissioner’s determinations are presumed
correct, and the taxpayer bears the burden of proving that those
determinations are erroneous. Rule 142(a). This principle was
firmly established by the United States Supreme Court as early as
1933 and has been reaffirmed by the Supreme Court as recently as
1992. See INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992);
Welch v. Helvering, 290 U.S. 111, 115 (1933).
Although section 7491(a) may serve to shift the burden of
proof to the Commissioner, that section has no application to the
present case in view of the fact that: (1) Petitioner has not
asserted its applicability; (2) petitioner has failed to
demonstrate that she maintained all requisite records and that
she cooperated fully with reasonable requests by respondent, see
sec. 7491(a)(2); and (3) petitioner failed to introduce credible
evidence sufficient to establish a prima facie case, see sec.
7491(a)(1).
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Further, deductions and credits are a matter of legislative
grace, and the taxpayer bears the burden of proving that he or
she is entitled to any deduction or credit claimed. Rule 142(a);
Deputy v. du Pont, 308 U.S. 488, 493 (1940); New Colonial Ice Co.
v. Helvering, 292 U.S. 435, 440 (1934). Likewise, the taxpayer
is obliged to demonstrate entitlement to an advantageous filing
status, such as head of household. Smith v. Commissioner, T.C.
Memo. 2008-229.
II. Dependency Exemption Deductions
Section 151(c) authorizes an exemption for each individual
who is a dependent of the taxpayer for the taxable year.
The term “dependent” is defined in section 152. Generally,
the term means a “qualifying child” or a “qualifying relative”.
See sec. 152(a) and (b).
An individual is a qualifying child if a number of specific
requirements are satisfied. See sec. 152(c). Among those
requirements are the relationship requirement, sec. 152(c)(2),
(f)(1), and the age requirement, sec. 152(c)(3).
The relationship requirement is satisfied if the individual
is either a child of the taxpayer or a descendant of such a
child, sec. 152(c)(2)(A), or a sibling or step-sibling of the
taxpayer or a descendant of such a sibling or step-sibling, sec.
152(c)(2)(B).
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The age requirement is satisfied if the individual has not
attained the age of 19 or is a student who has not attained the
age of 24. Sec. 152(c)(3)(A). The age requirement is deemed to
be satisfied in the case of an individual who is permanently and
totally disabled at any time during the taxable year. Sec.
152(c)(3)(B).4
An individual is a qualifying relative if a number of
specific requirements are satisfied. As relevant herein, an
individual is a qualifying relative if: (1) The individual,
although unrelated by blood or marriage to the taxpayer, has the
same principal place of abode as the taxpayer and is a member of
the taxpayer’s household for the entire taxable year; (2) the
individual’s gross income for the taxable year is less than the
exemption amount ($3,200 for 2005); (3) the individual receives
over half of his or her support from the taxpayer for the taxable
4
Sec. 152(c)(3)(B) incorporates the definition of
permanent and total disability as set forth in sec. 22(e)(3).
The latter section defines that term as follows:
An individual is permanently and totally disabled if he
is unable to engage in any substantial gainful activity
by reason of any medically determinable physical or
mental impairment which can be expected to result in
death or which has lasted or can be expected to last
for a continuous period of not less than 12 months. An
individual shall not be considered to be permanently
and totally disabled unless he furnishes proof of the
existence thereof in such form and manner, and at such
times, as the Secretary may require.
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year; and (4) the individual is not a qualifying child of any
other taxpayer.
Clearly, Ms. Holter was not a qualifying child of petitioner
in 2005. As an unrelated individual born in 1955 who was not
shown to be disabled, Ms. Holter did not satisfy either the
relationship requirement or the age requirement of section
152(c). And neither was Z.S. a qualifying child of petitioner in
2005. As an unrelated individual not legally adopted by
petitioner, Z.S. did not satisfy the relationship requirement of
section 152(c).5
On the basis of the limited record before us, it appears
that Z.S. may have been a qualifying child of Ms. Holter in 2005.
If so, then Z.S. could not be a qualifying relative of petitioner
for that year. See sec. 152(d)(1)(D).
We consider next whether Ms. Holter was a qualifying
relative of petitioner in 2005.
The record demonstrates that Ms. Holter received welfare
benefits for herself and Z.S. in 2005. This does not prove,
however, that Ms. Holter had no gross income or had gross income
in an amount less than $3,200 for that year. See sec.
152(d)(1)(B). Similarly, petitioner did not prove that she
5
There is nothing in the record to suggest that Z.S. was
petitioner’s foster child; i.e., that Z.S. had been placed with
petitioner by an authorized placement agency or by judgment,
decree, or other order of any court of competent jurisdiction.
See sec. 152(f)(1)(A)(ii), (C).
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provided more than half of Ms. Holter’s support in 2005. See
sec. 152(d)(1)(C). Thus, Ms. Holter was not a qualifying
relative of petitioner in 2005.
In conclusion, we hold that petitioner is not entitled to a
dependency exemption deduction for either Ms. Holter or Z.S. for
2005. Respondent’s determination is therefore sustained.
III. Earned Income Credit
In the case of an eligible individual, section 32(a)(1)
allows an earned income credit. An “eligible individual”
includes an individual who has a qualifying child for the taxable
year. See sec. 32(c)(1)(A)(i).6 As relevant herein, a
“qualifying child” means a qualifying child as defined in section
152(c). Sec. 32(c)(3). However, as we have just concluded,
petitioner did not have a qualifying child as defined in section
152(c) in 2005. Accordingly, we hold that petitioner is not
entitled to an earned income credit for 2005. Respondent’s
determination is therefore sustained.
6
An eligible individual also includes an individual who
does not have a qualifying child. See sec. 32(c)(1)(A)(ii).
However, an earned income credit is available to such an
individual only if his or her adjusted gross income is less than
$11,750. See Rev. Proc. 2004-71, sec. 3.06, 2004-2 C.B. 970,
973. Because petitioner’s adjusted gross income exceeded that
amount in 2005, petitioner is not entitled to an earned income
credit for that year without a qualifying child.
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IV. Additional Child Tax Credit
Section 24(a) allows a child tax credit with respect to each
qualifying child of the taxpayer. Section 24(d) provides that a
portion of the credit may be refundable, which portion is
commonly referred to as the additional child tax credit.
As just stated, the child tax credit under section 24 is
allowed with respect to each qualifying child. As relevant
herein, the term “qualifying child” is defined by section
24(c)(1) to mean a qualifying child of the taxpayer as defined in
section 152(c) who has not attained age 17. However, as we have
previously concluded, petitioner did not have a qualifying child
as defined in section 152(c) in 2005. Accordingly, we hold that
petitioner is not entitled to an additional child tax credit for
2005. Respondent’s determination is therefore sustained.
V. Filing Status
Section 2(b) defines “head of household” for filing status
purposes. As relevant herein, an individual is considered a head
of a household if the individual maintains as his or her home a
household that constitutes for more than half of the taxable year
the principal place of abode, as a member of such household, of
either (1) a qualifying child of the individual, as defined in
section 152(c), or (2) any other person who is a dependent of the
taxpayer, but only if the taxpayer is entitled to a dependency
exemption deduction for such person.
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As previously discussed, neither Ms. Holter nor Z.S. was
either a qualifying child or a qualifying relative of petitioner
in 2005. In short, petitioner lacks a qualifying child, and she
has not shown that there is any other person who is her dependent
such that she would be entitled to a deduction for such person
under section 151. Accordingly, we hold that petitioner is not
entitled to head of household filing status for 2005.
Respondent’s determination of single filing status is therefore
sustained.
VI. Conclusion
To reflect our disposition of the disputed issues,
Decision will be entered
for respondent.