T.C. Summ ary Opi ni on 20 15 -6

UNITED STAT ES TAX COURT LETICIA SAENZ, Peti ti on er v . COMM ISSI ONER OF INTERNAL REVENUE, Resp on de nt

Doc ke t No . 15 20 6- 13 S. Fi le d F eb ru ary 3, 2 01 5.

Dav idS. Hans en , forpe ti ti on er. Bryan J. Do ts onan d S he il a R. Pat ti so n, fo r res po nd en t.

SUMM ARY OPINION NEGA, Jud ge : Th is cas e was he ardpu rs ua ntto th e p ro vi si on s o f se ct io n 74 63 of t he Int ern al Rev en ue Co de in effec t wh enth e p et it io n was fil ed . 1

Unl es s o th erwi se in di cat ed , all sec ti on refe ren ces are t o t he Int ern al 1 Rev enue Co de in effe ctforth e y ear i n i ss ue , andall Ru le refe ren ces are t o t he Tax Co urt Ru le s o f Prac ti ce an d P ro cedur e.- 2 -

Pu rs ua ntto sec ti on 74 63 (b ), th e d eci si on to be en te redis no t re vi ewab le by any ot he r co urt, an d t hi s o pi ni on sh al l n otbe tre at edas p rece de ntforan y ot he r cas e. Res po nd en t d et erm in eda de fic ie nc y of $ 3,7 47 in pe ti ti on er’s Fed eral in co m e ta x fo r th e 2 01 1 t ax y ear. Th e o nl y is su e fo r de ci si on is whet he r pe ti ti on er is en ti tl edto cla im

he r daug ht er, Mr s. Sa en z, an d g ran dc hi ld , DS, as q ua li fy in g 2 ch il dr enforpu rp os es of t he de pe nd en cy ex em pt io n d educ ti on , th e earne d i nc om e ta x c red it , andth e ad di ti on al ch il d t ax cred itonhe r 20 11 return. Bac kg ro un d So m e o f th e fac ts ha ve be enst ip ul at edan d a re s o fo un d. The s ti pu la ti on of 3 fact s an d t he acco m

pa nyin g e xh ib it s ar e in co rp or at edhe rei n b y th is refe ren ce. Pet it io ne r res id edin Texa s wh enth e p et it io n was fil ed . Pet it io ne r ti m el y

fil edhe r 20 11 Fed eral in co m e ta x re tu rnas h eadof ho us eh ol d a ndcla im ed : (1 ) de pe nd en cy ex em pt io n d educ ti on s fo r Mrs . Saen z an d DS; (2 ) th e earne d i nc om e ta x c red itwith re sp ectto Mrs . Saen z an d DS; an d (3 ) th e ad di ti on al ch il d t ax cred itwith re sp ectto DS. It i s t he po li cy

of t hi s C ou rt n otto id en ti fy m in or s b y

th ei r na m es . W e ref

er 2 to pe ti ti on er’s g ran dc hi ld(Mrs . Saen z’ dau gh te r) b y us in g h er i ni ti al s. See Ru le 27 (a)( 3) . At tria l t he Co urt g ran te d p et it io ne r’s m ot io n t o wi th dr aw pa rag rap h 1 0 o f 3 th e st ip ul at io n o f fac ts . The s ti pu la ti on of f act s was adm it te d i nt o e vi de nc e wit h th e ex cep ti on of p arag rap h 1 0.- 3 -

Mrs . Saen z an d DS re si de d wi th pe ti ti on er fro m Jan ua ry 20 11 un ti l Au gu st 20 11 , andpe ti ti on er s up po rte d b ot h o f th em th ro ug ho utth is ti m e. Fo r th e rem ai nd er o f 20 11 Mrs . Saen z an d DS re si de d wi th Mi ch ael Niet o. On Ap ril 15 , 20 12 , Mrs . Saen z an d M r. Niet o fi le d ajoi ntin co m e ta x re tu rn fo r th e 2 01 1 t ax y ear a ndatt ach eda st at em en t t o the return re pr es en ti ng th atth ey were m arri ed . On th ei r joi ntreturn t he y cla im eda de pe nd en cy

ex em pt io n de du ct io n fo r DS an d t he earn edin co m e ta x c red itwith re sp ectto DS. Ove r a y ear a fte r Mrs . Saen z fi le d h er joi ntreturn, s he si gn eda no ta riz ed do cu m en t s ta ti ng th atsh e h adne ve r be enm arri ed . At tri al Mr. Nie to tes ti fie d t ha t he is cu rren tl y

m arri edto Mrs . Saen z an d tha t h e ag reedto m arry her wh enth ey

“ si gn edth ei r ta x re tu rn ” an d “ de ci de d t o fi le joi nt ly”. An a ffi da vi t s ig ne d b y Mrs . Saen z’s br ot he r st at edth atMrs . Saen z “ le ft t o g o wi th he r bo y fri en d i n Au gu st 20 11 .” Mrs . Saen z d idno t ap pe ar attri al . On t he no ti ce o f de fic ie nc y , m ai le d Ap ril 1, 2 01 3, re sp on de ntdi sa ll owe d pe ti ti on er’s d ep en de nc y

ex em pt io n d educ ti on s fo r Mrs . Saen z an d DS, t he earn ed in co m e ta x c red itwith re sp ectto Mrs . Saen z an d DS, an d t he ad di ti on al ch il d t ax cred itforDS. Res po nd en t co nt en ds th atMrs . Saen z was m arri edin 20 11 an d t ha t bo th sh e an d h er ch il d, DS, were cla im edon an ot he r return fi le d fo r th aty ear.- 4 - Dis cu ss io n I. Bu rd enof P ro of The Co m m is si on er’s d et erm in at io ns setforthin a no ti ce o f de fic ie nc y are ge ne ral ly pres um edco rrec t, an d t he tax pa y er b ears th e b ur de n o f pr ov in g t he m erro ne ou s. Ru le 14 2( a); W el chv. Hel ve rin g, 2 90 U.S. 11 1, 1 15 (19 33 ). Pet it io ne r do es no t co nt en d tha t the bu rd enof p ro of as t o a ny factu al is su e sh ou ldsh iftto res po nd en t und er s ect io n 7 49 1( a). II. Qua li fy in g C hi ldUnd er Se ct io n 1 52 (c) Pet it io ne r’s en ti tl em en t t o c la im Mrs . Saen z an d DS a s qua li fy in g c hi ld ren fo r pu rp os es of t he sec ti on 32 earn edin co m e ta x c red itan d c la im DS as a qu al ifyin g c hi ldforpu rp os es of t he sec ti on 24 ad di ti on al ch il d t ax cred itde pe nd s on whet he r Mrs . Saen z an d DS a re qua li fy in g c hi ld ren forpu rp os es of s ect io n 1 52 (wh ic h re la te s t o t he de pe nd en cy ex em pt io n d educ ti on ) be cau se bo th cred it s de fin e th e te rm

“ qu al ifyin g c hi ld ” wit h re fere nc e to th e d efi ni ti onof t he same term as itap pe ars in sec ti on 15 2( c). See s ecs . 24 (c)( 1) , 32 (c)( 3) , 15 1( c). W e th eref or e 4
ex am in e th e st atus of M rs . Saen z an d DS a s qua li fy in g c hi ldren un de r se ct io n

Sec. 2 4 a dd it io na ll y

requi res th e “ qu al ifyin g c hi ld ” to be un de r th e ag e o f 4 17 . DS was u nd er the ag e o f 17 at t he clo se of 2 01 1.- 5 -

15 2( c) t o d et erm in e p et it io ne r’s en ti tl em en t t o t he cred it s an d d ep en de nc y ex em pt io n d educ ti on s atis su e. Sect io n 1 52 (c) p ro vi de s t ha t a qua li fy in g c hi ldm us t b e, am on g o th er thi ng s, th e ta xp ay er’s ch il d o r a d es cen da ntof t he tax pa y er’s ch il d. In ad di ti on to ot he r requi rem en ts whi ch th e p art ie s ag reedare s at is fie d, a qua li fy in g c hi ldm us t b e an in di vi du al who ha s n otfil eda joi ntreturn wi th th e in di vi du al ’s sp ou se un de r se ct io n 6 01 3 fo r th e sa m e ta xabl e y ear fo r whi ch th e ta xp ay er i s cl ai m in g t he qu al ifyin g c hi ld . Sec. 1 52 (c)( 1) (E). Pet it io ne r arg ue s t ha t M rs . Saen z an d DS a re qua li fy in g c hi ld ren be cau se th e fo rm er i s p et it io ne r’s ch il d a ndth e la tt er i s p et it io ne r’s gr an dc hi ld . Fu rth erm or e, pe ti ti on er ar gu es th atMrs . Saen z was no t i n ava li d c omm on law m arri ag e p ur su an t t o t he laws of t he Sta te of Tex as du rin g 2 01 1 andthus was un ab le to fil e a joi ntreturn fo r th aty ear. Th eref or e, pe ti ti on er ar gu es , sec ti on 15 2( c)(1 )(E) d oe s n otpre ve nthe r fro m cla im in g M rs . Saen z an d DS a s qua li fy in g ch il dr enforpu rp os es of t he de pe nd en cy ex em pt io n d educ ti on s, t he earn edin co m e ta x c red it , andth e ad di ti on al ch il d t ax cred itonhe r 20 11 return. Re sp on de nt ’s so le co nt en ti on is th atpe ti ti on er was no t en ti tl edto th es e cre di ts an d t he de pe nd en cy

ex em pt io n d educ ti on s o n h er 2 01 1 t ax return b ecau se Mrs . Saen z an d- 6 -

Mr. Ni et o wer e “ co m

m on law” m arri edin 20 11 as d efi ne d b y th e Tex as st atut e an d fi le d ajoi ntreturn fo r th e sa m e y ear. W e ap pl y th e la w of t he Sta te of Tex as to de te rm in e whe th er the rel at io ns hi p b etween Mrs . Saen z an d M r. Niet o was a le ga l an d v al idm arri ag e du rin g 2 01 1. Se e Nic ho la s v . Comm is si on er, T.C. Mem o. 1 99 1- 39 3; Sch m id t v . Co m m is si on er, T.C. Mem o. 1 98 1- 38 . The thr ee el em en ts of aco m m on law m arri ag e in Texa s ar e: (1) th e co up le ag reedto be m arri ed ; (2 ) aft er the ag reem en t, the y

li ve d t og ethe r as hu sb an d a ndwife ; an d (3 ) th ey rep res en te d t o ot he rs th atth ey

are m arri ed . See Tex . Fam . Cod e Ann . sec 2.4 01 (a) (West20 06 ); Ru ss el l v . Rus se ll , 86 5 S .W .2d92 9, 9 32 (Tex . 19 93 ). All th ree e le m en ts m us t co ex is t t o e st ab li sh a va li d c omm on law m arri ag e. W in fie ldv. Re nf ro , 82 1 S.W .2d64 0, 6 45 (Tex . App . 19 91 ). Whi le Mrs . Saen z an d M r. Niet o d idres id e to ge th er dur in g 2 01 1, we fi nd th atth ey were n otm arri edforth is y ear. As of Au gu st20 11 Mrs . Saen z’s br ot he r be li ev edth atMr. Nie to was h er b oyfrien d. Fu rth erm or e, Mr. Ni et o t es ti fie d a t tri al th athe an d M rs . Saen z ag reedto be m arri edwhen th ey si gn edan d fi le d t he ir ta x re tu rn . Spe ci fic al ly, he st at edth at“ if we fil edjoi nt ly the re, acc or di ng to th e la w or s om ethi ng , we wou ldbe co m m on -la w m arri ed .” Becaus e Mrs . Saen z an d- 7 -

Mr. Ni et o jo in tl y

fil edth ei r 20 11 tax return i n 2 01 2, t he y di d n otag ree t o b e m arri edun ti l 2 01 2. The Co urt fi nd s, t he refo re, tha t M rs . Saen z was no t m arri ed , comm on law o r ot he rwis e, to Mr. Nie to in 20 11 . Becau se th ey were n otm arri edin 20 11 , Mrs . Saen z d idno t fi le a joi ntreturn wi th he r sp ou se “un de r se ct io n 6 01 3” an d th eref or e d oe s n otfai l t he requi rem en t i n s ect io n 1 52 (c)( 1) (E). Ther efo re, pe ti ti on er co ul d c la im

Mrs . Saen z as a qu al ifyin g c hi ldforpu rp os es of t he de pe nd en cy

ex em pt io n d educ ti on an d the earn edin co m e ta x c red iton he r 20 11 tax return. DS m eet s t he requi rem en ts un de r se ct io n 1 52 (c)( 1) to be bo thpe ti ti on er’s qu al ifyin g c hi ldan d M rs . Saen z’s qu al ifyin g c hi ld : (1 ) sh e is pe ti ti on er’s gr an dc hi ldan d M rs . Saen z’s daug ht er; (2) sh e h adth e sa m e p rin ci pa l p la ce o f ab od e as pe ti ti on er an d M rs . Saen z fo r m or e th anon e-h al f of 20 11 ; (3 ) sh e was a m in ordu rin g 2 01 1; (4) sh e d idno t p ro vi de m or e th anon e-h al f of he r ownsupp ort in 20 11 ; an d (5 ) sh e was no t m arri edan d d idno t fi le a joi ntreturn fo r 20 11 . See se c. 15 2( c)(1 )(A)-( E). In t he se si tu at io ns , th e ti e-b reak er ru le un de r se ct io n 15 2( c)(4 )(A) p ro vi de s t ha t i f anin di vi du al m ay be cla im edas aqu al ifyin g c hi ldby two or m or e ta xp ay ers fora ta xabl e y ear, s uc h i nd iv idua l s ha ll be tre at edas t he qu al ifyin g c hi ldof t he tax pa y er wh o i s t he pa ren t o f th e in di vi du al . Sec.- 8 -

15 2( c)(4 )(A). Howe ve r, se ct io n 1 52 (b )(1 ) pr ov id es th atif a n i nd iv idua l i s a de pe nd en t o f a t ax pay er fo r an y tax ab le y ear tha t i nd iv idua l s ha ll be tre at edas ha vi ng no de pe nd en ts for th aty ear. Eve n t ho ug h b ot h p et it io ne r an d M rs . Saen z cl ai m edDS as aqu al ifyin g ch il d o n t he ir r es pe ct iv e 2 01 1 t ax returns , Mrs . Saen z was ba rredfro m do in g s o be cau se sh e was a de pe nd en t o f pe ti ti on er fo r th aty ear. Se e se c. 15 2( b) (1 ). Sin ce pe ti ti on er i s t he on ly ind iv idua l wh o c ancla im DS as aqu al ifyin g c hi ld , th e ti ebr eak er ru le in sec ti on 15 4( c)(4 )(A) d oe s n otap pl y . There fo re, p et it io ne r co ul d cl ai m DS as aqu al ifyin g c hi ldforpu rp os es of t he de pe nd en cy ex em pt io n de du ct io n, t he earn edin co m e ta x c red it , andth e ad di ti on al ch il d t ax cred itfor th e 20 11 tax y ear. Se e se cs . 15 2( c)(4 )(A), 2 4( c)(1 ), 32 (c)( 3) . Acco rd in gl y , pet it io ne r is en ti tl edto th e d ep en de nc y ex em pt io n d educ ti on s, th e earne d i nc om e ta x c red it s, an d t he ad di ti on al ch il d t ax cred itcla im edon he r 20 11 tax return. To re fle ctth e fo reg oi ng , Deci si on wil l b e en te red fo r pe ti ti on er.