T.C. Summary Opinion 2011-53
UNITED STATES TAX COURT
FRANCISCO MARTINEZ CAMARILLO, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 22992-09S. Filed April 18, 2011.
Francisco Martinez Camarillo, pro se.
Kevin W. Coy, 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 a deficiency of $5,895 in petitioner’s
Federal income tax for 2008. After concessions,1 the issues for
decision are whether petitioner is entitled to the earned income
tax credit (EITC) and the additional child 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 reference. Petitioner resided in
California when he filed his petition.
At the time of trial petitioner had lived with his
girlfriend (Ms. Alejandre) for 12 years, which included the year
at issue. Ms. Alejandre is the biological mother of D.Z. and
J.L. The children have lived with petitioner since they were
“very young”. Petitioner is not the biological father of D.Z. or
J.L., nor has petitioner adopted either child.
Petitioner electronically filed his Federal income tax
return for 2008. He reported business income of $13,938 on the
return, and his adjusted gross income was $12,953. On his return
petitioner claimed the EITC and the additional child tax credit.
Respondent disallowed both credits.
1
Respondent concedes that petitioner is entitled to
dependency exemption deductions for D.Z. and J.L. The Court
redacts the names of minor children. See Rule 27(a)(3).
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Discussion
I. Burden of Proof
Generally, the Commissioner’s determinations are presumed
correct, and the taxpayer bears the burden of proving that those
determinations are erroneous.2 Rule 142(a); see INDOPCO, Inc. v.
Commissioner, 503 U.S. 79, 84 (1992); Welch v. Helvering, 290
U.S. 111, 115 (1933).
Deductions and credits are a matter of legislative grace,
and the taxpayer bears the burden of proving that he 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).
II. EITC
Section 32(a)(1) allows an “eligible individual” an EITC
against that individual’s income tax liability. Section 32(a)(2)
provides limitations on the amount of the allowable credit based
on certain percentages and amounts (as determined by section
32(b)). Generally, the limitation amount is based on the amount
of the taxpayer’s earned income and whether the taxpayer has no
qualifying children, one qualifying child, or two or more
qualifying children, as defined in section 152(c). Sec. 32(a),
(b), and (c).
2
Petitioner has not claimed or shown that he meets the
requirements under sec. 7491(a) to shift the burden of proof to
respondent as to any factual issue relating to his tax liability.
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Under section 152(c)(1)(A) the term “qualifying child” means
an individual “who bears a relationship to the taxpayer described
in paragraph (2)”.3 An individual bears a relationship to a
taxpayer for purposes of section 152(c)(1)(A) if the individual
is “a child of the taxpayer or a descendant of such a child” or
“a brother, sister, stepbrother, or stepsister of the taxpayer or
a descendant of any such relative.” Sec. 152(c)(2).
At trial petitioner testified that although the children had
lived with him since they were “very young”, he had taken no
steps to adopt or otherwise legally recognize the children as
his. Under the Code, D.Z. and J.L. do not bear a relationship to
petitioner. Therefore, D.Z. and J.L. are not petitioner’s
qualifying children for purposes of the EITC under section
32(a)(1).
Individuals without qualifying children, however, may be
eligible for an EITC if their earned income is no greater than
the amount that the Code permits. Sec. 32(a)(1), (b)(2), (j)(1);
see Rowe v. Commissioner, 128 T.C. 13, 15 (2007). Earned income
for purposes of the EITC includes wages and net earnings from
self-employment. Sec. 32(c)(2); sec. 1.32-2(c)(2), Income Tax
Regs.
3
The children’s relationship to petitioner is the only
factor of the qualifying child test at issue.
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Rev. Proc. 2007-66, sec. 3.07, 2007-2 C.B. 970, 973, lists
the amounts used to determine the EITC for 2008 under section
32(b). The revenue procedure lists $12,880 as the completed
phaseout amount. Id. The “completed phaseout amount” is the
amount of adjusted gross income (or, if greater, earned income)
at or above which no credit is allowed. Id. Petitioner’s
adjusted gross income and earned income both exceeded the
phaseout amount of $12,880 for 2008. Accordingly, he is
ineligible to claim an EITC under section 32(c)(1)(A)(ii) as an
individual without a qualifying child for 2008. Respondent’s
determination is sustained.
III. Additional Child Tax Credit
Subject to limitations based on adjusted gross income,
section 24(a) provides a credit with respect to each qualifying
child of a taxpayer. A portion of the credit is refundable.
Sec. 24(d). The refundable portion of the credit is commonly
referred to as the additional child tax credit. Section 24(c)(1)
defines the term “qualifying child” as a “qualifying child of the
taxpayer (as defined in section 152(c)) who has not attained age
17.”
As discussed above, D.Z. and J.L. are not petitioner’s
qualifying children under section 152(c). Therefore, petitioner
does not have any qualifying children and is not entitled to the
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section 24(d) additional child tax credit for 2008. Respondent’s
determination is sustained.
To reflect the foregoing,
Decision will be entered
under Rule 155.