T.C. Summary Opinion 2009-197
UNITED STATES TAX COURT
DAWN CRYSTAL THOMPSON, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 5555-09S. Filed December 22, 2009.
Dawn Crystal Thompson, pro se.
Anita Gill, for respondent.
RUWE, Judge: This case was heard pursuant to the provisions
of section 74631 of the Internal Revenue Code in effect when the
petition was filed. Pursuant to section 7463(b), the decision to
1
Unless otherwise indicated, all section references are to
the Internal Revenue Code as amended and in effect for the year
in issue, and all Rule references are to the Tax Court Rules of
Practice and Procedure.
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be entered is not reviewable by any other court, and this opinion
shall not be treated as precedent for any other case.
Respondent determined a deficiency of $6,144 in petitioner’s
2007 Federal income tax. The issues for decision are: (1)
Whether petitioner is entitled to dependency exemption deductions
for her nephews, B and R;2 (2) whether petitioner is entitled to
head of household filing status; (3) whether petitioner is
entitled to child tax credits and additional child tax credits
for her nephews B and R; and (4) whether petitioner is entitled
to an earned income tax credit.
Background
Some of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits are
incorporated herein by this reference.
At the time the petition was filed, petitioner resided in
Toledo, Ohio.
Petitioner was not married at the close of 2007. During
2007 petitioner was gainfully employed and maintained her own
home. Petitioner filed her 2007 Federal income tax return as a
head of household and claimed dependency exemption deductions for
her two nephews, B and R, and child tax and earned income tax
credits.
2
The Court refers to minor children by their initials. See
Rule 27(a)(3).
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Sometime during 2007 petitioner’s sister, C, lost her job in
Cleveland, Ohio, and moved to Toledo, Ohio. At the time C moved
to Toledo she had four children, was pregnant, was ill and on
medication, and was suffering from depression. Around the time
that C moved to Toledo, her son, B, who was 11 years old, began
living with petitioner at her residence in Toledo, Ohio. C’s son
R was born in September 2007. At the time of R’s birth, C was
unable to care for him, and he resided at petitioner’s home for
the remainder of 2007. R’s father, who was unemployed, provided
daycare for both B and R. In addition to providing B and R with
a place to reside, petitioner paid some but not all of the
expenses for their support. The total living expenses paid on
behalf of B and R by petitioner and others during 2007 is
unknown.
Discussion
Dependency Exemptions
Section 151 allows an exemption amount for each individual
who qualifies as a dependent 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:
(A) who bears a relationship to the taxpayer, such as a
niece or nephew of the taxpayer;
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(B) who has the same principal place of abode as the
taxpayer for more than one-half of such taxable year (aside from
special rules applicable to divorced or separated parents);
(C) who is under 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
(D) who has not provided over one-half of such individual’s
own support for the calendar year in which the taxable year of
the taxpayer begins.
Petitioner’s nephews meet the requirements of section
152(c)(1)(A) since they are children of petitioner’s sister.
Petitioner’s nephews also meet the age requirements of section
152(c)(1)(C) and they did not provide over one-half of their own
support as required by section 152(c)(1)(D). Petitioner’s nephew
R meets the requirement of section 152(c)(1)(B) because after his
birth in September 2007 and for the remainder of 2007 he resided
with petitioner at her residence.3 Therefore, we hold that
3
We do not understand respondent to be arguing that in
order to meet the requirements of sec. 152(c)(1)(B) R must have
resided with petitioner for more than 182 days. Rather, we
understand respondent’s position to be consistent with the
Commissioner’s instructions for the 2007 Form 1040, U.S.
Individual Income Tax Return, which state that a person can be a
qualifying child if that person was born during the second half
of the taxable year. Page 15 of the instructions states: “If
the child did not live with you for the required time, see
Exception to time lived with you on page 17.” Page 17 of the
instructions states: “Exception to time lived with you. A
person is considered to have lived with you for all of 2007 if
the person was born or died in 2007 and your home was this
person’s home for the entire time he or she was alive.”
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petitioner is entitled to a dependency exemption for R. However,
petitioner has not established exactly when C moved to Toledo or
when B began living at petitioner’s residence and, therefore, has
not proven that B had the same principal place of abode as
petitioner for more than one-half of 2007.
B might also qualify as a dependent if he is a “qualifying
relative” within the definition of section 152(d), which
provides:
SEC. 152(d). Qualifying Relative.--For purposes
of this section--
(1) In general.--The term “qualifying
relative” means, with respect to any taxpayer
for any taxable year, an individual--
(A) who bears a relationship
to the taxpayer described in
paragraph (2),
(B) whose gross income for
the calendar year in which such
taxable year begins is less
than the exemption amount (as
defined in section 151(d)),
(C) with respect to whom the
taxpayer provides over one-half
of the individual’s support for
the calendar year in which such
taxable year begins, and
(D) who is not a qualifying
child of such taxpayer or of
any other taxpayer for any
taxable year beginning in the
calendar year in which such
taxable year begins.
(2) Relationship. For purposes of
paragraph (1)(A), an individual bears a
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relationship to the taxpayer described in
this paragraph if the individual is any of
the following with respect to the taxpayer;
* * * * * * *
(E) A son or daughter of a
brother or sister of the
taxpayer.
Petitioner has not shown that B qualifies under the
requirements of section 152(d)(1)(C) because petitioner has not
established that she provided over one-half of B’s support during
2007. Therefore petitioner is not entitled to a dependency
exemption for B.
Filing Status
Under section 2(b)(1)(A) and (3), an individual may file as
head of household if she is a U.S. citizen or resident, is not
married at the close of her taxable year, and maintains as her
home a household which constitutes for more than one-half of such
taxable year the principal place of abode of a qualifying child
or a qualifying relative.
We have held that R is a qualifying child. We have also
found that R’s principal place of abode from his birth through
the end of 2007 was petitioner’s home4 and that petitioner meets
4
We do not understand respondent to be arguing that in
order to meet the requirements of sec. 2(b) R must have resided
with petitioner for more than 182 days. Rather, we understand
respondent’s position to be consistent with the Commissioner’s
instructions for the 2007 Form 1040, which state that a taxpayer
can qualify for head of household filing status if: “You paid
(continued...)
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all of the other qualifications. Consequently, petitioner is
entitled to head of household filing status for taxable year
2007.
Child Tax Credit and Additional Child Tax Credit
Section 24(a) provides a credit (subject to certain income
limitations) against income tax for each qualifying child of a
taxpayer. The term “qualifying child” means a qualifying child
of the taxpayer (as defined in section 152(c)) who has not
attained age 17. Sec. 24(c)(1).
It is clear from our prior findings that B was not a
qualifying child and that R was a qualifying child under section
152(c) for purposes of section 24. Consequently, petitioner is
entitled to the child tax credit and the additional child tax
credit for R for taxable year 2007.
Earned Income Tax Credit
Petitioner claimed an earned income tax credit on the basis
that both her nephews were qualifying children for taxable year
2007. Respondent disallowed the credit because he determined
that neither B nor R was a qualifying child. Section 32(a)
4
(...continued)
over half the cost of keeping up a home in which you lived and in
which * * * [a qualifying child] also lived for more than half of
the year (if half or less, see Exception to time lived with you
on this page).” The exception states: “Exception to time lived
with you. * * * If the person for whom you kept up a home was
born or died in 2007, you can still file as head of household as
long as the home was that person’s main home for the part of the
year he or she was alive.”
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provides for an earned income tax credit in the case of an
eligible individual. For a taxpayer to be eligible for the
earned income tax credit on the basis of having a qualifying
child, specific requirements listed in section 32(c) must be met
with respect to each qualifying child.
Section 32(c)(1), in pertinent part, defines an “eligible
individual” as an individual who has a qualifying child for the
taxable year. Sec. 32(c)(1)(A)(I). Pursuant to section
32(c)(3)(A), a qualifying child must meet the requirements of
section 152(c).
On the basis of our prior findings, we hold that B was not a
qualifying child and that R was a qualifying child for purposes
of section 152(c). Consequently, petitioner is entitled to the
earned income tax credit based on one qualifying child for
taxable year 2007.
To reflect the foregoing,
Decision will be entered
under Rule 155.