Lynn v. Comm'r

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.
 - 8 -

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).
 - 9 -

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.