T.C. Summary Opinion 2009-140
UNITED STATES TAX COURT
VERNYCE K. MOSLEY, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 5338-08S. Filed September 8, 2009.
Vernyce K. Mosley, pro se.
Marilyn S. Ames, for respondent.
DEAN, 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. 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, subsequent section references
are to the Internal Revenue Code (Code) in effect for the year in
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issue, and all Rule references are to the Tax Court Rules of
Practice and Procedure.
Respondent determined for 2006 a deficiency in petitioner’s
Federal income tax of $3,074.
The issues for decision are: (1) Whether petitioner is
entitled to file as married filing separately after filing a
joint return for the same tax year; (2) whether petitioner is
entitled to dependency exemption deductions; (3) whether
petitioner is entitled to the child tax credit; and (4) whether
petitioner is entitled to the child care credit.
Background
Some of the facts have been stipulated and are so found.
The stipulation of facts and the exhibits received into evidence
are incorporated herein by reference. When the petition was
filed, petitioner resided in Texas.
In 2006 petitioner and her husband resided in the same
household and had two children, ages 17 and 9.
On March 23, 2007, petitioner and her husband timely filed a
joint Federal income tax return for 2006 and claimed two
dependency exemption deductions and the child tax credit and the
child care credit with respect to one of the children.1 On the
joint return, petitioner and her husband reported a tax liability
1
When petitioner and her husband filed their joint Federal
income tax return they were in divorce proceedings. Petitioner
and her husband divorced in 2008.
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of $17,162. Application of Federal tax credits including the
credit for withheld tax, the child tax credit, and the child care
credit resulted in a tax due of $60. Petitioner and her husband
remitted $60 with the joint return.
On April 5, 2007, petitioner filed for 2006 a Federal income
tax return as married filing separately. On that return
petitioner claimed the same two dependency exemption deductions,
the child tax credit, and the child care credit. Respondent
processed the separate 2006 return and sent petitioner a refund
of $3,496.
On December 31, 2007, respondent issued a notice of
deficiency to petitioner disallowing the dependency exemption
deductions and the credits on her married filing separate return
for 2006. In the notice of deficiency, respondent states:
Thank you for your reply received on 01/19/2008, our
records show that you filed two income tax returns for
the 2006 tax year, and claimed the same children on
both returns. Since you have not provided court/legal
documents showing that you were given physical custody
over the two children during the 2006 year, by the tie-
breaker rule the dependent exemptions will be allowed
to the person with the highest adjusted gross income
(AGI) during 2006 year. We are disallowing the
dependent exemptions until you show otherwise.
Discussion
Burden of Proof
In general, the Commissioner’s determination set forth in a
notice of deficiency is presumed correct, and the taxpayer bears
the burden of proving otherwise. Rule 142(a); INDOPCO, Inc. v.
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Commissioner, 503 U.S. 79, 84 (1992); Welch v. Helvering, 290
U.S. 111, 115 (1933). Section 7491(a), however, places the
burden of proof on the Commissioner with regard to certain
factual issues. Because petitioner has not alleged or shown that
section 7491(a) applies, the burden of proof remains on
petitioner.
Joint or Separate Return
Section 6013(a) permits a husband and wife to file a joint
return. Spouses who elect to file a joint return for a tax year
are required to compute their tax on the aggregate income of both
spouses, and both spouses are jointly and severally liable for
all taxes due. See sec. 6013(d)(3); Butler v. Commissioner, 114
T.C. 276 (2000). Where spouses file a joint return with respect
to a tax year, neither spouse may thereafter elect married filing
separately status for that tax year if the time for filing the
tax return of either spouse has expired. See Ladden v.
Commissioner, 38 T.C. 530, 534 (1962); Haigh v. Commissioner,
T.C. Memo. 2009-140; sec. 1.6013-1(a)(1), Income Tax Regs.
Petitioner and her husband timely filed their joint return
for 2006 on March 23, 2007. On April 5, 2007, petitioner timely
filed a separate return for the same tax year. Generally, the
time for filing a tax return is the 15th day of April following
the close of the calendar year. Sec. 6072(a). Since petitioner
filed as married filing separately before the time for either
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spouse to file a return had expired, her separate return is
valid. See sec. 1.6013-1(a)(1), Income Tax Regs. The filing of
petitioner’s separate return, however, is not dispositive of
petitioner’s entitlement to the claimed dependency exemption
deductions and tax credits.
Dependency Exemption Deductions
Deductions and credits are a matter of legislative grace,
and the taxpayer bears the burden of proving entitlement to any
deduction or claimed credit. Rule 142(a); Deputy v. du Pont, 308
U.S. 488, 493 (1940).
Section 151(c) allows a deduction for each dependency
exemption as defined in section 152. Section 152(a) provides
that a dependent means a “qualifying child” or a “qualifying
relative.” Section 152(c)(1) defines a qualifying child as an
individual: (1) Who bears a relationship to the taxpayer, such
as a child of the taxpayer; (2) who has the same principal place
of abode as the taxpayer for more than one-half of the tax year;
(3) who has not attained the age of 19 or is a student who has
not attained the age of 24 as of the close of the calendar year;
and (4) who has not provided over one-half of such individual’s
own support for the calendar year in which the tax year of the
taxpayer begins.
Petitioner argues that because she provided over half of the
support for her two children, she is entitled to dependency
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exemption deductions and tax credits. The problem with this
argument is that the Code provides to the taxpayer for the year
at issue a deduction with respect to a qualifying child.2 Sec.
152(a), (c). The definition of a qualifying child no longer
specifies a support requirement for the taxpayer seeking a
deduction, but rather delineates a relationship, residency, age,
and self-support test for the individual considered to be a
qualifying child. See sec. 152(c)(1).
The Code also provides an objective rule for determining
which taxpayer or parent is entitled to a dependency exemption
deduction in the event that both parents attempt to treat the
same individual as a qualifying child on separately filed
returns. This rule, also referred to as the “tie-breaker rule”,
is codified in section 152(c)(4)(B)(ii). Under section
152(c)(4)(B), “if the parents claiming any qualifying child do
not file a joint return together, such child shall be treated as
the qualifying child of * * * (ii) * * * the parent with the
highest adjusted gross income.”
Respondent argues that petitioner is not entitled to
dependency exemption deductions and tax credits because
2
The Working Families Tax Relief Act of 2004 (Act), Pub. L.
108-311, secs. 201 and 206, 118 Stat. 1169, 1176, amended secs.
151 and 152. These amendments are effective for tax years
beginning after Dec. 31, 2004. Id. sec. 208, 118 Stat. 1178.
Before the Act, the “old support test” defined a “dependent” as
an individual over half of whose support was received from the
taxpayer.
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petitioner’s former husband had the higher adjusted gross income
for 2006. According to respondent, petitioner’s former husband
is, therefore, the only taxpayer entitled to the deductions under
section 151. Petitioner bears the burden of proof, and she has
failed to allege and prove that she had the higher adjusted gross
income for 2006. Therefore, petitioner is not entitled to the
dependency exemption deductions pursuant to section
152(c)(4)(b)(ii).
Child Tax Credit
With respect to the child tax credit for 2006, a taxpayer
may claim a credit against Federal income tax of up to $1,000 for
each qualifying child of the taxpayer. Sec. 24(a). For purposes
of section 24(a) the term “qualifying child” means a qualifying
child of the taxpayer, as defined in section 152(c), who is not
yet 17.
Because the Court has found that petitioner is not entitled
to a dependency exemption deduction for either of her two
children, as qualifying children for 2006, she is not entitled to
the child tax credit for 2006.
Child Care Credit
Section 21(a) allows a taxpayer a credit for a certain
percentage of employment-related expenses incurred to enable the
taxpayer to be employed gainfully, including expenses for the
care of a “qualifying individual”. See sec. 21(a) and (b)(2). A
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qualifying individual must be: (1) The taxpayer’s qualifying
child or qualifying relative under 13; (2) certain of the
taxpayer’s qualifying children or relatives who are unable to
care for themselves; or (3) a spouse of the taxpayer unable to
care for himself or herself who lives with the taxpayer for more
than half of the taxable year.
Because petitioner has no qualifying individuals, she is not
entitled to the child care credit for 2006.
Accordingly, for the foregoing reasons, the Court sustains
respondent’s determination that petitioner is not entitled to
dependency exemption deductions, the child tax credit, and the
child care credit for 2006.
Other arguments made by the parties and not discussed herein
were considered and rejected as irrelevant, without merit, or
moot.
To reflect the foregoing,
Decision will be entered
for respondent.