T.C. Summary Opinion 2009-132
UNITED STATES TAX COURT
DEBORAH A. HARDAWAY, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 14634-07S. Filed August 31, 2009
Deborah A. Hardaway, pro se.
Terra-Lynn Zentara, for respondent.
CARLUZZO, Special Trial Judge: This case was heard
pursuant to the provisions of section 7463.1 Pursuant to section
7463(b), the decision to be entered is not reviewable by any
1
Unless otherwise indicated, section references are to the
Internal Revenue Code of 1986 (Code), as amended, in effect for
the relevant period. Rule references are to the Tax Court Rules
of Practice and Procedure.
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other court, and this opinion shall not be cited as precedent for
any other case.
Respondent determined deficiencies of $2,713 and $3,834,
respectively, in petitioner’s 2004 and 2005 Federal income taxes.
The issues for decision for each year are: (1) Whether
petitioner qualifies as a head of household; (2) whether
petitioner is entitled to a dependency exemption deduction; and
(3) whether petitioner is entitled to an earned income credit,
and, if so, in what amount. For 2005 the parties also dispute
whether petitioner is entitled to an additional child tax credit.
Background
Some of the facts have been stipulated and are so found.
Petitioner was not married during or as of the close of either
year in issue. At the time the petition was filed, she resided
in Florida.
Petitioner and Daryl Smith (Mr. Smith) are the parents of a
daughter, born in 1992 (petitioner’s daughter). Petitioner and
Mr. Smith have never been married to each other; they lived apart
at all times relevant. Mr. Smith had legal custody of
petitioner’s daughter during each year in issue. Petitioner
enjoyed and exercised visitation rights with her daughter during
weekends and summer school recesses, but her daughter lived with
Mr. Smith for the greater portion of each year in issue.
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Petitioner was employed as a substitute teacher during the
years in issue, and her wages from that employment ($9,031 for
2004 and $14,894 for 2005) are reported on her timely filed
Federal income tax return for each of those years. No other
income or source of income is shown on either return. For each
year she filed as a head of household, claimed a dependency
exemption deduction for her daughter, and claimed an earned
income credit computed as though her daughter was a qualifying
child for purposes of that credit. For 2005 she treated her
daughter as a qualifying child for purposes of the additional
child tax credit claimed for that year.
Mr. Smith also claimed a dependency exemption deduction for
petitioner’s daughter on his 2004 and 2005 Federal income tax
returns. He did not provide petitioner with a written
declaration indicating that he would not claim petitioner’s
daughter as a dependent for either of those years.2
Consequently, no such declaration is attached to petitioner’s
return for either year in issue.
For each year respondent changed petitioner’s filing status
from head of household to single and made the appropriate
2
Such declarations can be made on a Form 8332, Release of
Claim to Exemption for Child of Divorced or Separated Parents, or
its equivalent. See sec. 1.152-4T(a), Q&A-3, Temporary Income
Tax Regs., 49 Fed. Reg. 34459 (Aug. 31, 1984).
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adjustment to the standard deduction claimed on each return. For
each year respondent also disallowed: (1) The dependency
exemption deduction claimed for petitioner’s daughter; and (2)
the earned income credit claimed on petitioner’s return. In
addition, for 2005 respondent disallowed the additional child tax
credit petitioner claimed on her return for that year.
Discussion
Respondent’s determinations, having been made in a notice of
deficiency, are presumed correct, and petitioner bears the burden
of proving such determinations to be erroneous.3 See Rule
142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). The issues
in this case are resolved by the application of various Code
sections that changed between 2004 and 2005. See the Working
Families Tax Relief Act of 2004, Pub. L. 108-311, 118 Stat. 1166.
The changes invite a year-by-year analysis, but the underlying
facts for each year relax any such requirement. Instead, we
summarily identify the changes from year to year and dispense
with a detailed discussion of those changes that would have no
consequence to the outcome of any issue here under consideration.
3
Nothing in the record suggests that sec. 7491(a) is
applicable to shift the burden of proof on any issue to
respondent.
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A. Head-of-Household Filing Status
Among other tax advantages and as relevant here, a taxpayer
who qualifies as a head of household is entitled to a greater
standard deduction than a taxpayer whose filing status is single.
See sec. 63(c). For each year respondent changed petitioner’s
filing status from head of household to single and reduced the
standard deduction accordingly.
The definition of a head of household is contained in
section 2(b). As indicated, that definition changed between 2004
and 2005, but it remains that to qualify as a head of household
the taxpayer must maintain, as his or her “home a household which
constitutes for more than one-half of such taxable year the
principal place of abode, as a member of such household, of”:
(1) For tax years ending before January 1, 2005, a daughter
(among other individuals); or (2) for tax years beginning after
December 31, 2004, a qualifying child (as defined in section
152(c)) or any other person for whom the taxpayer is entitled to
a dependency exemption deduction. Because petitioner’s home was
not her daughter’s principal place of abode for more than one-
half of either year in issue, petitioner does not qualify as a
head of household for either of those years. Respondent’s
adjustments resulting from the change of petitioner’s filing
status from head of household to single are sustained.
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B. Dependency Exemption Deductions
In general, a taxpayer is entitled to a dependency exemption
deduction for each of the taxpayer’s dependents. See secs. 151
and 152. While the provisions of each of those sections differ
significantly from the version in effect for 2004 to the version
in effect for 2005, under the circumstances of this case the
applicable provisions operate in the same manner from one year to
the next. Because petitioner and Mr. Smith did not live together
for any period during the last 6 months of either year in issue,
section 152(e), as in effect for each year, applies. Although
section 152(e) itself differs from one year to the next, the
differences are not meaningful here. Suffice it to note that,
with respect to a child’s parents who did not live together
during the last 6 months of either 2004 or 2005, and subject to
certain conditions and exceptions, in general section 152(e)
operates to allow the otherwise allowable dependency exemption
deduction for the child for those years to be claimed by the
child’s custodial parent.
For each year Mr. Smith, rather than petitioner, was the
custodial parent of petitioner’s daughter. Furthermore, he did
not provide petitioner with a Form 8332 for either of those
years. Consequently, no such form, or its equivalent, is
attached to petitioner’s Federal income tax return for either of
those years. That being so, petitioner’s daughter: (1) Is
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treated as having received more than one-half of her support from
Mr. Smith rather than petitioner during 2004 and therefore does
not qualify as petitioner’s dependent for that year, see sec.
152(e)(1) as in effect for tax years beginning before January 1,
2005; and (2) is not treated as petitioner’s qualifying child or
qualifying relative for 2005, see sec. 152(e)(1) as in effect for
tax years beginning after December 31, 2004.
It follows that petitioner is not entitled to a dependency
exemption deduction for her daughter for either year in issue,
and respondent’s disallowances of those deductions are sustained.
C. Earned Income Credit
Subject to various conditions and limitations, section 32(a)
provides that an eligible individual is entitled to an earned
income credit. An individual is an “eligible individual” within
the meaning of section 32(a) if the individual: (1) Has a
qualifying child, see sec. 32(c)(1)(A)(i); or (2) does not have a
qualifying child, does not qualify as the dependent of another
taxpayer, and meets certain residency and age requirements, see
sec. 32(c)(1)(A)(ii). This is true for both years in issue. For
each of those years petitioner claimed an earned income credit
computed by treating her daughter as a qualifying child for
purposes of that credit, and for each year respondent disallowed
the credit.
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Respondent agrees that for both years in issue petitioner is
an eligible individual who does not have a qualifying child
within the meaning of section 32(c)(1)(A)(ii). Respondent now
concedes that petitioner is entitled to a $189 earned income
credit for 2004. Respondent correctly points out, however, that
although petitioner is otherwise an eligible individual without a
qualifying child, her income for 2005, in effect, precludes the
allowance of any earned income credit to her for that year. See
sec. 32(b), (f).
According to respondent, the earned income credit claimed on
petitioner’s return for each year in issue is improperly computed
because petitioner’s daughter is not petitioner’s qualifying
child for either of those years. We agree. Among other
requirements, to be treated as a taxpayer’s qualifying child for
purposes of the earned income credit, the child must have the
same principal place of abode as the taxpayer for more than one-
half of the taxable year. See sec. 32(c)(3)(A)(ii) (as in effect
for tax years ending before January 1, 2005); secs. 32(c)(3)(A),
152(c) (as in effect for tax years beginning after December 31,
2004). Because petitioner and her daughter did not share the
same principal place of abode for more than one-half of either
year in issue, petitioner’s daughter may not be treated as her
qualifying child for purposes of that credit for either year.
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Respondent’s disallowances of the earned income credits here in
dispute are sustained.
D. Additional Child Tax Credit
Petitioner claimed an additional child tax credit on her
2005 return. According to petitioner, her daughter fits within
the definition of her qualifying child for purposes of that
credit. Respondent has determined otherwise, and we agree with
respondent.
In general, and subject to various conditions and
limitations, a taxpayer is allowed an additional child tax credit
with regard to each qualifying child of the taxpayer for whom the
taxpayer is entitled to a dependency exemption deduction. Sec.
24(a), (d).
For reasons discussed above, we have found that petitioner
is not entitled to a dependency exemption deduction for her
daughter for 2005. It follows that petitioner is not entitled to
treat her daughter as a qualifying child for purposes of the
additional child tax credit for that year. Respondent’s
disallowance of that credit for 2005 is sustained.
To reflect the foregoing,
Decision will be
entered under Rule 155.