T.C. Summary Opinion 2006-197

UNITED STATES TAX COURT

PAUL EDWIN FARROW, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 23763-05S. Filed December 28, 2006. 

Paul Edwin Farrow, pro se.

Pamela M. Mable, for respondent.

WELLS, Judge: This case was heard pursuant to the

provisions of section 7463 in effect at the time the petition was

filed. The decision to be entered is not reviewable by any other

court, and this opinion should not be cited as authority. All

section references are to the Internal Revenue Code, as amended,

and all Rule references are to the Tax Court Rules of Practice

and Procedure.
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1The younger child was under 18 years of age throughout

2002. The older child turned 19 during September 2002 but did

not graduate from high school until 2003. Petitioner does not

dispute his obligation to support his children during 2002 and,

as noted below, claimed the sec. 32 earned income credit based on

both children. 

Respondent determined a deficiency in petitioner’s Federal

income tax of $1,116 for taxable year 2002. The issues we must

decide are whether certain payments petitioner made to his former

spouse are deductible alimony payments or nondeductible child

support payments and whether petitioner is entitled to the

section 32 earned income credit. 

Background

Some of the facts and certain exhibits have been stipulated.

The parties’ stipulations of fact are incorporated in this

opinion by reference and are found as facts in the instant case. 

At the time of filing the petition in the instant case,

petitioner resided in Ellenwood, Georgia. During 1997,

petitioner initiated divorce proceedings against his former

spouse in the Superior Court of Solano County, California

(Superior Court). Petitioner and his former spouse have two

children, both of whom lived with petitioner for two and a half

months during 2002.1

By order dated March 9, 1999 (March 1999 order), the

Superior Court ordered the garnishment of petitioner’s wages in

order to pay petitioner’s former spouse $977 per month for child
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2According to the instructions, disposable earnings means

earnings remaining after subtracting items required to be

withheld by Federal and State law, for example: Federal income

tax, Social Security tax, and State income tax.

3Petitioner retired from the U.S. Air Force in 2000. The

actual amount garnished varied slightly from month to month based

on cost of living increases.

support, $471 per month for spousal support, and an additional

$25 per month for child care expenses. The March 1999 order

contained instructions (the instructions) to the payor limiting

the amount that could be garnished to 50 percent of petitioner’s

“disposable earnings”.2 The instructions stated that “If 50

percent of the Obligor’s net disposable earnings will not pay in

full all of the assignments for support, prorate it first among

all the support assignments in the same proportion that each

assignment bears to the total current support owed.” However,

the instructions further stated that “When this Order is for

child support or family support, it has top priority over a

similar order for spousal support.” The March 1999 order was in

effect and had not been modified by or during 2002.

On the basis of the March 1999 order, approximately $441 was

withheld from petitioner’s military retirement account3 and paid

directly to his former spouse. Petitioner made no other payments

to his former spouse during 2002. On his 2002 tax return,

petitioner deducted as alimony $5,301 paid to his former spouse

and claimed the section 32 earned income credit. 
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4Sec. 7491(a) does not apply in the instant case to shift

the burden of proof to respondent because petitioner did not

raise the issue and also did not comply with the substantiation

and record keeping requirements of sec. 7491(a)(2). 

Discussion

The Commissioner’s determinations in the notice of

deficiency generally are presumed correct, and the burden of

proving an error is on the taxpayer.4 Rule 142(a); Welch v.

Helvering, 290 U.S. 111, 115 (1933). In general, a payor spouse

may deduct alimony payments but may not deduct child support

payments. See secs. 71(b) and (c), 215(a) and (b). Section

71(c)(3) provides a special rule where the amount of the child

support payment is less than the amount specified in the order:

“if any payment is less than the amount specified in the

instrument, then so much of such payment as does not exceed the

sum payable for support shall be considered a payment for such

support.” See also Hazam v. Commissioner, T.C. Memo. 2000-71.

In the instant case, the March 1999 order required

petitioner to pay his former spouse each month $977 for child

support, $471 for spousal support, and $25 for child care

expenses. The instructions limited the amount that could

actually be garnished from petitioner’s military retirement

account to approximately $441. However, the instructions also

stated that payments for child support are given priority over

payments for spousal support where the garnishment is
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insufficient to cover all of the assignments for support. We

conclude that the payments from petitioner to his former spouse

during 2002 were for child support and not for alimony. 

Accordingly, we hold that petitioner is not entitled to the

claimed $5,301 deduction for taxable year 2002. 

As to the section 32 earned income credit claimed by

petitioner, that section requires the children to have the same

principal place of abode as the taxpayer for more than one half

of the taxable year. See secs. 32(c)(3), 152(c). Petitioner

testified at trial that his children lived with him for only two

and a half months during 2002. Consequently, we hold that

petitioner is not entitled to the section 32 earned income credit

for taxable year 2002.

To reflect the foregoing,

Decision will be entered

for respondent.