T.C. Summary Opinion 2010-173

UNITED STATES TAX COURT

MOHAMED M. MAGAN, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 6909-09S. Filed December 13, 2010.

Mohamed M. Magan, pro se.

Jeffrey A. Schlei, for respondent.

ARMEN, 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.1 Pursuant to section

7463(b), the decision to be entered is not reviewable by any

1 Unless otherwise indicated, all subsequent section

references are to the Internal Revenue Code 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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other court, and this opinion shall not be treated as precedent

for any other case.

Respondent determined a deficiency in petitioner’s 2007

Federal income tax of $5,871.

The issues for decision are:

(1) Whether petitioner is entitled to dependency exemption

deductions for his two nieces;

(2) whether petitioner is entitled to the earned income

credit for his two nieces; and

(3) whether petitioner is entitled to the child tax credit

and an additional child tax credit for his two nieces.

Background

Some of the facts have been stipulated, and they are so

found. We incorporate by reference the parties’ stipulation of

facts and accompanying exhibits. Petitioner resided in the State

of California when the petition was filed. Petitioner has

limited English proficiency, and his testimony was given through

an interpreter at trial.

In January 2007, petitioner moved from the State of

Minnesota to the State of California in order to be closer to his

sister and her family. Throughout 2007 petitioner’s sister was

married and lived with her husband and five children in a singlefamily home. Petitioner’s sister was a stay-at-home mom and her
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husband was a full-time student who only started working in late

2007.

From January to August 2007, petitioner worked nights.

Although petitioner did not live with his sister and her family

during this time, he would spend much of his time at their home

helping with childcare and doing the family’s errands. In

addition to assisting with childcare and errands, petitioner also

provided his sister’s family with financial assistance.

In August 2007, petitioner obtained a job located far away

from where his sister and her family lived. For the remainder of

2007, petitioner was unable to help his sister with child care

and errands, but he continued to provide financial assistance.

Petitioner’s 2007 Federal income tax return was completed by

a professional tax return preparer. On the return petitioner

claimed two dependency exemption deductions, the earned income

credit, and the child tax credit and additional child tax credit

for two nieces (his sister’s daughters).

In a notice of deficiency, respondent denied the dependency

exemption deductions, the earned income credit, and the child tax

credit and additional child tax credit.

Discussion

A. Burden of Proof

Generally, the Commissioner’s determinations are presumed

correct, and the taxpayer bears the burden of proving that those
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determinations are erroneous. Rule 142(a); 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 proof to

establish that he or she 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). Under section 7491(a)(1), the burden of proof may shift

from the taxpayer to the Commissioner if the taxpayer produces

credible evidence with respect to any factual issue relevant to

ascertaining the taxpayer’s liability. Petitioner did not allege

that section 7491 applies, nor did he introduce the requisite

evidence to invoke that section; therefore, the burden of proof

remains on petitioner.

B. Dependency Exemption Deductions

In general, a taxpayer may claim a dependency exemption

deduction “for each individual who is a dependent (as defined in

section 152) of the taxpayer for the taxable year.” Sec. 151(a),

(c). Section 152(a) defines a dependent to include a “qualifying

child” or a “qualifying relative.” A qualifying child must,

inter alia, share the same principal place of abode as the

taxpayer for more than one-half of the year in issue. Sec.

152(c)(1)(B). A qualifying relative must not, inter alia, be a

qualifying child of another taxpayer for the year in issue. Sec.

152(d)(1)(D).
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Petitioner claims that he is entitled to dependency

exemption deductions for his two nieces because he provided

financial assistance, as well as help with child care and the

family’s errands. We commend petitioner for contributing to the

support of his sister’s family. However, he has not demonstrated

that he and his nieces shared the same principal place of abode

for any portion, much less for more than one-half, of the taxable

year in issue. See sec. 152(c)(1)(B). In addition, petitioner’s

nieces are the qualifying children of petitioner’s sister and her

husband for the year in issue. See sec. 152(d)(1)(D). 

Accordingly, we hold that petitioner is not entitled to

dependency exemption deductions for his nieces for 2007.

C. Earned Income Tax Credit

In the case of an eligible individual, section 32(a)(1)

allows an earned income credit. An “eligible individual”

includes an individual who has a qualifying child for the taxable

year. Sec. 32(c)(1)(A)(i).2 As relevant herein, a “qualifying

child” means a qualifying child as defined in section 152(c). 

Sec. 32(c)(3). However, as we have just concluded, petitioner

2 An eligible individual also includes an individual who

does not have a qualifying child. See sec. 32(c)(1)(A)(ii). 

However, an earned income credit is available to such an

individual only if his or her adjusted gross income is less than

$12,590. See Rev. Proc. 2006-53, sec. 3.07(1), 2006-2 C.B. 996,

1000. Because petitioner’s adjusted gross income exceeded that

amount in 2007, petitioner is not entitled to an earned income

credit for that year without a qualifying child.
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did not have a qualifying child as defined in section 152(c) in

2007. Accordingly, we hold that petitioner is not entitled to an

earned income credit for 2007.

D. Child Tax Credit and Additional Child Tax Credit

Section 24(a) allows taxpayers a credit against tax imposed

for each qualifying child. The term “qualifying child” is

defined by section 24(c)(1) to mean a qualifying child of the

taxpayer as defined in section 152(c) who has not attained the

age of 17. Section 24(d) provides that a portion of the credit

may be refundable, which portion is commonly referred to as the

additional child tax credit. As we have previously concluded,

petitioner did not have a qualifying child as defined in section

152(c) in 2007; accordingly, we hold that he is not entitled to a

child tax credit or an additional child tax credit for 2007.

Conclusion

We have considered all of the arguments made by petitioner,

and, to the extent that we have not specifically addressed those

arguments, we conclude that the arguments do not support results

contrary to those reached herein.

To reflect the foregoing,

Decision will be entered

for respondent.