TAX COURT OPINION

Case: Henry J. Danzey
Docket Number: 25314-15
Judge: Goeke
Opinion Type: bench
Filed: 02/10/2017
Pages: 6

UNITED STATES TAX COURT WASHINGTON, DC 20217 HENRY J. DANZEY, Petitioner(s), v. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ). ) ) Docket No. 25314-15. ) ) ) ) ORDER Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, 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 Judge Joseph Robert Goeke at Birmingham, Alabama, on January 26, 2017, containing his oral findings of fact and opinion rendered at the trial session at which this case was heard. In accordance with the oral findings of fact and opinion, a decision will be entered under Rule 155, Tax Court Rules of Practice and Procedure. (Signed) Joseph Robert Goeke Judge Dated: Washington, D.C. February 10, 2017 SERVED FEB 1 3 2017 Capital Reporting Company 3 1 2 3 4 5 6 7 8 9 10 11 12 Bench Opinion by Judge Joseph Robert Goeke January 26, 2017 Henry J. Danzey v. Commissioner Docket No. 25314-15 The Court has decided to render Oral Findings of Fact and Opinion in this case and the following represents the Court's Oral Findings of Fact and Opinion. The Oral Findings of Fact and Opinion shall not be relied upon as-precedent in any other case. This opinion is rendered pursuant to the authority of Rule 152 of the Tax Court Rules of 13 Practice and Procedure as authorized by Internal 14 15 16 17 18 19 20 21 22 23 24 25 Revenue Code Section 7459(b). Section references hereinafter are to the Internal Revenue Code and rule references are to the Tax Court Rules of Practice and Procedure. This case is before the Court after trial based upon the Court's jurisdiction to review deficiency determinations by Respondent as evidenced by notices of deficiency, which are timely petitioned to the Court. The notice of deficiency for the year in question was for the year 2013 and asserted a deficiency in income tax in the amount of $8,412. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 4 1 2 3 4 5 6 7 8 9 The Petitioner resided in Alabama at the time he filed the petition in this case. He filed an income tax return on his own behalf for 2013. He claimed head of household filing status in that income tax return and he also claimed dependency exemptions for two children. The notice of deficiency and Respondent's trial memorandum note that there are two issues involving income which was not reported by the 10 Petitioner. Those issues have been conceded by the 11 Petitioner. The only issues which remain involve the 12 13 14 15 16 17 18 19 20 21 22 second of the two dependency exemptions, as Respondent has conceded one of the dependency exemptions. We believe Respondent's concession allows us to also avoid discussion of the earned income credit issue, which will be computational based upon our analysis of the other issues in the case. First we will dispose of the Petitioner's claim for head of household filing status. Based upon the evidence at trial, which was based upon a stipulation of facts and Petitioner's testimony, 23 Petitioner is not eligible for head of household 24 25 filing status because he was married at the end of the taxable year 2013, by his own admission. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 5 1 2 3 The dependency exemption which remains at issue involves Petitioner's brother-in-law, who at some point during the year 2013 moved in with 4 Petitioner because he was having difficulties getting 5 along with Petitioner's mother-in-law, who was the 6 mother of the child. The child in question was 16 7 8 9 10 11 12 13 14 years of age in 2013. The record does not provide any information concerning the support provided for the child by any third parties, including the child's mother or father. The Petitioner testified that the child lived with him for over half of the year; however, because of the child's status. as Petitioner's brother-in-law, the only possible manner in which the 15 Petitioner would be entitled to a deduction involves 16 17 18 19 20 21 22 23 24 25 Section 152(d) as a qualifying relative, and under Section 152(d)(1)(c) and (d), the Petitioner is not entitled to claim the child if he did not provide over one-half of the support for the young man or the young man is a potential qualifying child of his parents, either of them. Because of the circumstances in this case and the nature of the testimony, the burden of proof becomes important. The Petitioner bears the burden of proof that the determination in the notice of 866.488.DEPO www.CapitalReportingCompany.com . Capital Reporting Company 6 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 deficiency is erroneous, Rule 142(a). In some circumstances the burden of proof shifts to Respondent, if the taxpayer introduces credible evidence and has complied with and cooperated with the Internal Revenue Service in the course of the audit. That includes providing substantiation for the issues in the case. /Section 7491(a) (1) and (2). Because Petitioner was unable to provide any substantiation about how he provided over half of the support for the young man in question, Petitioner is not in compliance with Section 7491 and the burden of proof does not shift to the Respondent. Because the burden of proof remains on the Petitioner and there is no evidence in the record which establishes who provided support for the remaining dependent in issue, we are left with no alternative but to find that the Petitioner is not entitled to the dependency exemption for this young man. As previously stated, Petitioner is not entitled to head of household filing status and we leave the earned income credit computation to the parties' Rule 155 computation. This concludes the Court's Oral Findings of Fact and Opinion in this matter. 866.488.DEPO www.CapitalReportingCompany.com 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 Capital Reporting Company 7 (Whereupon, at 10:56 a.m., the above- entitled matter was concluded.) 866.488.DEPO www.CapitalReportingCompany.com