TAX COURT OPINION

Case: Ronte Duwayne Fallen
Docket Number: 30128-14
Judge: Gustafson
Opinion Type: bench
Filed: 05/13/2016
Pages: 5

ALS UNITED STATES TAX COURT WASHINGTON, DC 20217 RONTE DUWAYNE FALLEN, Petitioner, v. ) ) ) ) Docket No. 30128-14. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ORDER Pursuant to the opinion of the Court as set forth in the transcript of the proceeding at Washington, D.C., on May 3, 2016, it is ORDERED that the Clerk of the Court shall transmit herewith to petitioner and to respondent a copy of the pages of the transcript of the trial in the above case before the undersigned judge at Washington, D.C., containing his oral findings of fact and opinion rendered at the trial session at which the case was heard. In accordance with the oral findings of fact and opinion, decision will be entered under Rule 155. (Signed) David Gustafson Judge Dated: Washington, D.C. May 13, 2016 SERVED May 13 2016 Capital Reporting Company 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Bench Opinion by Judge David Gustafson May 3, 2016 Ronte Duwayne Fallen v. Commissioner Docket No. 30128-14 The Court has decided to render the following as its oral Findings of Fact and Opinion in this case. This Bench Opinion is made pursuant to the authority granted by section 7459(b) of the Internal Revenue Code, and Tax Court Rule 152; and it shall not be relied on as precedent in any other case. By a notice of deficiency dated November 17, 2014 (Ex. 1-J), the Internal Revenue Service ("IRS") determined a deficiency in petitioner Ronte Duwayne Fallen's 2013 Federal income tax, disallowing dependency exemption deductions and earned income credit related to his fiance's two children. After respondent's concession of his entitlement to dependency exemption deductions for those children and to child credit for a third child (Mr. Fallen's biological child) not claimed on his return, the sole issue for decision is whether Mr. Fallen is entitled to claim his fiancé's two children as "qualifying children" for purposes of the earned income credit. We hold that he is not. The case was tried in Washington, D.C. on May 2, 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 2016. Mr. Fallen represented himself, and respondent 4 was represented by Han Huang. FINDINGS OF FACT In 2013 Mr. Fallen lived for most of the year 1 2 3 4 5 with Ms. Sirrell Phillips and her two minor children. 6 7 (Stip. 19, 22.) Mr. Fallen and Ms. Phillips identified each other as fiancés , but they were not 8 married in 2013. (Stip. 16.) The two children were 9 not biologically related to Mr. Fallen; he was not 10 married to their mother; and he had not adopted them. 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 (Stip. 7-14). On his Form 1040 tax return for 2012, Mr. Fallen declared Ms. Phillips's two children as his dependents and claimed them as qualifying children for purposes of the earned income credit. See Ex. 2-J. (He also claimed those benefits in relation to a third child, his own biological child, but those benefits are not in dispute here.) The IRS examined Mr. Fallen's 2013 return and issued a notice of deficiency on November 17, 2014, disallowing the dependency exemption deductions and the earned income credit as to Ms. Phillips's children. (Ex. 1-J.) On December 18, 2014, Mr. Fallen timely filed his petition in this Court. At that time he resided in Washington, D.C. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company OPINION 5 Mr. Fallen's entitlement to the disputed items at issue turns on whether his fiancé's children were his "qualifying child[ren]" in 2013. They were not, for reasons we now explain. One can claim someone as a dependent, for purposes of the dependency exemption deduction under section 151, if that person is either a "qualifying child", sec. 152(a)(1), or a "qualifying relative", sec. 152(a)(2). The IRS has conceded Mr. Fallen's entitlement to claim the two children as his dependents because they are his "qualifying relative[s]". The definition of that term does not require any particular relation by blood or marriage but rather can be satisfied if the person simply "has the same principal place of abode as the taxpayer and is a member of the taxpayer's household". Sec. 152(d)(2)(H). The tax benefit that the IRS has not conceded-- i.e., the earned income credit--requires that the person claimed be a "qualifying child". See sec. 152(a)(1). For this purpose, the child must be related to the taxpayer by blood, marriage, adoption, or foster placement. See sec. 152(c)(2), (f)(1); Cowan v. Commissioner, T.C. Memo. 2015-85, at *7-*8. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 6 The parties' stipulation (at paras. 7-14, 18) shows that in 2013 Mr. Fallen and the two children did not have the required "relationship". He is therefore not eligible for the increased earned income credit based on those children. So that Mr. Fallen's tax liability can be recomputed to take account of the IRS' s concessions, decision will be entered under Rule 155. This concludes the Court's oral Findings of Fact and Opinion in this case. (Whereupon, at 10:55 a.m., the above- entitled matter was concluded.) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 866.488.DEPO www.CapitalReportingCompany.com