1 Unless otherwise indicated, all section references are

to the Internal Revenue Code in effect for the taxable year in

issue. All Rule references are to the Tax Court Rules of

Practice and Procedure.

T.C. Memo. 1999-169

UNITED STATES TAX COURT

SAMUEL K. RASCO, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 8935-98. Filed May 18, 1999.

Samuel K. Rasco, pro se.

Fred E. Green, Jr., for respondent. 

MEMORANDUM OPINION

DINAN, Special Trial Judge: This case was heard pursuant to

the provisions of section 7443A(b)(3) and Rules 180, 181, and

182.1
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Respondent determined a deficiency in petitioner's Federal

income tax for 1995 in the amount of $3,667.

The issues for decision are: (1) Whether petitioner is

entitled to dependency exemption deductions; (2) whether

petitioner is entitled to head of household filing status; and

(3) whether petitioner is entitled to an earned income credit.

Some of the facts have been stipulated and are so found. 

The stipulations of fact and attached exhibits are incorporated

herein by this reference. Petitioner resided in Las Vegas,

Nevada, on the date the petition was filed in this case.

Petitioner worked for D.I. & Eastern Texaco during 1995. On

his 1995 return, he reported wages in the amount of $13,957 and

unemployment compensation in the amount of $705.

Lisa K. Froemel moved into petitioner's apartment in the

summer of 1991. Ms. Froemel has three children from two previous

marriages. Her daughter from her first marriage, Amber R.

Franks, was born in 1980. Her son from her first marriage was

not identified by name in the record. Her son from her second

marriage, Joshua D. Noble, was born in 1985. Amber and Joshua

lived with petitioner and Ms. Froemel continuously from November

1991 through 1995. During 1995, Ms. Froemel received welfare

payments of approximately $400 per month. She also received food

stamps during 1995. She did not receive any support payments
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from the fathers of her children during 1995. Ms. Froemel did

not work while she lived with petitioner.

Petitioner's rent for his apartment during 1995 was $635 per

month. Ms. Froemel contributed $300 per month toward the rent. 

She used her monthly food stamps to buy groceries for the

apartment. Petitioner paid for all of the other household

expenses. He also paid for Joshua's and Amber's clothing during

1995.

The first issue for decision is whether petitioner is

entitled to dependency exemption deductions. On his 1995 return,

petitioner claimed dependency exemption deductions for Ms.

Froemel, Joshua, and Amber. In the statutory notice of

deficiency, respondent disallowed the claimed deductions.

An individual taxpayer is allowed as a deduction in

computing taxable income an additional exemption for each

dependent as defined in section 152. See sec. 151(c)(1). A

dependent is generally defined as an individual who receives over

half of his support from the taxpayer in the calendar year in

which the taxpayer's taxable year begins. See sec. 152(a). 

Individuals listed under this general definition include, among

others, an individual who for the taxable year of the taxpayer

has as his principal place of abode the home of the taxpayer and

is a member of the taxpayer's household. See sec. 152(a)(9).
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2 At trial, respondent's counsel stated that petitioner

had previously provided respondent with a copy of the notarized

statement and that respondent had no objection to the notarized

statement being admitted as evidence. There is no evidence in

the record which disputes petitioner's testimony that Ms.

Froemel, Joshua, and Amber moved out of his apartment in October

1996.

Petitioner testified that Ms. Froemel, Joshua, and Amber

moved out of his apartment in October 1996. Petitioner also

submitted a notarized statement from James and Annette Bunty, who

operated D.I. & Eastern Texaco and lived in petitioner's

neighborhood during all times relevant to this case. In their

notarized statement, James and Annette Bunty state that Ms.

Froemel, Joshua, and Amber lived with petitioner "during the year

of 1995". Based on the record, we find that Ms. Froemel, Joshua,

and Amber were members of petitioner's household for his entire

1995 taxable year.2 See sec. 1.152-1(b), Income Tax Regs. We

further find that petitioner has proved that he provided more

than half of Ms. Froemel's, Joshua's, and Amber's support during

1995, predicated upon our review and particular analysis of the

evidence introduced at trial. The following chart summarizes our

analysis of the evidence: 
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Total contributions to the support of petitioner,

Ms. Froemel, Amber, and Joshua during 1995 in the 

amount of $21,913:

Petitioner

Wages $13,957

Unemployment 705

Income tax (1,030)

Social Security taxes (1,073) 

1994 Refund 3,054

Total 15,613

Ms. Froemel, Amber, & Joshua

Welfare $4,800 (12 x 400/month)

Food stamps 1,500 (12 x 125/month)

Total 6,300

Total support per individual: $5,478 (21,913 ÷ 4)

 Total Petitioner Ms. Froemel Amber Joshua

Total $21,913 $5,478 $5,478 $5,478 $5,478

Welfare - 

 stamps* 6,300 0 2,100 2,100 2,100

Petitioner 15,613 5,478 3,378 3,378 3,378

*Assume welfare/food stamps are allocated equally to 

 Ms. Froemel, Amber, and Joshua - no evidence in record 

 of allocation.

Petitioner provided 62% of Ms. Froemel's, Amber's, and 

Joshua's support ($3,378/$5,478).

We hold that petitioner is entitled to dependency exemption

deductions for 1995 for Ms. Froemel, Joshua, and Amber.

The second issue for decision is whether petitioner is

entitled to head of household filing status. Petitioner claimed

head of household filing status on his 1995 return. In the

statutory notice of deficiency, respondent disallowed the claimed

filing status.
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3 Respondent stated in his trial memorandum that his

adjustment for "recapture of the earned income credit [is]

computational" based on the Court's holdings on the other issues

in this case. Respondent misstates the law applicable to this

case. Petitioner's entitlement to the sec. 32 earned income

credit for 1995 is not conditioned on petitioner's entitlement to

dependency exemption deductions under sec. 151 or head of

household filing status under sec. 2(b). The statutory language

which previously linked those issues was removed by the Omnibus

(continued...)

"Head of household", as relevant here, is defined as an

unmarried taxpayer who maintains as his home a household which

constitutes for more than one half of the taxable year the

principal place of abode of an individual for whom the taxpayer

is entitled to a dependency exemption deduction under section

151. See sec. 2(b)(1)(A)(ii). A taxpayer is considered as

maintaining a household only if he furnishes over half of the

cost of maintaining the household during the taxable year. See

sec. 2(b)(1).

Based on the record, we find that petitioner furnished over

half of the cost of maintaining his apartment during 1995. We

further find that he meets the other requirements of section 2(b)

and hold that he is entitled to head of household filing status

for 1995.

The third issue for decision is whether petitioner is

entitled to an earned income credit. Petitioner claimed an

earned income credit for 1995 in the amount of $2,426 with Joshua

and Amber listed as his qualifying children. In the statutory

notice of deficiency, respondent disallowed the claimed credit.3
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3(...continued)

Budget Reconciliation Act of 1990, Pub. L. 101-508, sec. 11111,

104 Stat. 1388, 1388-408, effective for taxable years beginning

after December 31, 1990. Moreover, our holdings with respect to

the first two issues in this case have no bearing on petitioner's

adjusted gross income or earned income, which are used to compute

the amount of petitioner's sec. 32 earned income credit.

Section 32(a) generally provides for an earned income credit

in the case of an "eligible individual". In pertinent part,

section 32(c)(1)(A)(i) defines an "eligible individual" as an

individual who has a "qualifying child" for the taxable year.

Based on the record, we find that Joshua and Amber each

satisfy the requirements for a qualifying child with respect to

petitioner for 1995. See sec. 32(c)(3)(A)(i) through (iii). 

Based on his income and the earned income credit tables

prescribed pursuant to section 32(f), we hold that petitioner is

entitled to an earned income credit for 1995 in the amount of

$2,426.

To reflect the foregoing,

Decision will be entered

for petitioner.