TAX COURT OPINION

Case: Edward B. Lorquet
Docket Number: 9789-14
Judge: Marvel
Opinion Type: bench
Filed: 11/10/2015
Pages: 9

RMM UNITED STATES TAX COURT WASHINGTON, DC 20217 EDWARD B. LORQUET, Petitioner(s), v. COMMISSIONER OF INTERNAL REVENUE, Respondent. ) ) ) ) ) Docket No. 9789-14 ) ) ) ) ) ORDER Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it is ORDERED that the Clerk of the Court shall transmit to petitioner and to respondent a copy of the pages of the transcript of the proceedings of the above case before Judge L. Paige Marvel at San Diego, California, on October 28, 2015, containing the Court's oral findings of fact and opinion. In accordance with the oral findings of fact and opinion, decision will be entered under Tax Court Rule 155. (Signed) L. Paige Marvel Judge Dated: Washington, D.C. November 10, 2015 SERVED Nov 12 2015 Capital Reporting Company 3 1 Bench Opinion by Judge L. Paige Marvel 2 October 28, 2015 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Edward B. Lorquet v. Commissioner Docket No. 9789-14 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 bench opinion is made pursuant to the authority granted by section 7459(b) of the Internal Revenue Code of 1986 as amended and Rule 152 of the Tax Court Rules of Practice and Procedure. Unless otherwise indicated, subsequent section references made in this bench opinion are to the Internal Revenue Code of 1986 as amended in effect for the relevant period, and Rule references are to the Tax 19 Court Rules of Practice and Procedure. 20 21 22 23 24 25 Edward B. Lorquet appeared pro se. Emerald G. Smith appeared on behalf of respondent. Petitioner resided in California when he filed this petition. Respondent determined a deficiency of $4,897 in petitioner's Federal income tax for 2011. Respondent has now conceded that petitioner is entitled to a 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 4 1 2 dependency exemption deduction, a child tax credit, and an earned income credit (EIC) with respect to his 3 minor son. Respondent has also conceded that 4 5 6 7 8 9 10 11 12 petitioner is entitled to head of household filing status. After concessions, the issues we must decide are whether petitioner is entitled to claim a dependency exemption deduction, a child tax credit, and an EIC with respect to his daughter. We conclude that petitioner is not so entitled. FINDINGS OF FACT Petitioner has a son and a daughter. During 2011 only the son lived with petitioner. 13 Petitioner's daughter did not live with him at any 14 15 16 17 18 19 20 21 22 23 24 25 time during 2011. Petitioner timely filed his Federal income tax return for the 2011 taxable year. On his 2011 return, petitioner claimed dependency exemption deductions, child tax credits, and EICs with respect to his two children and head of household filing status. On February 18, 2014, respondent mailed a notice of deficiency to petitioner for 2011. In the notice, respondent disallowed the head of household filing status, the claimed dependency exemption deductions as well as the EIC and child tax credits for the two 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 5 children. Respondent has now conceded that petitioner is eligible for head of household filing status and that petitioner properly claimed the dependency exemption deduction and the EIC and child tax credits with respect to his minor son, who resided with him throughout 2011. DISCUSSION The deficiency determined by the Commissioner in a notice of deficiency is presumed correct, and the taxpayer ordinarily has the burden of proving that the determination is erroneous. See Rule 142; Welch v. Helvering, 290 U.S. 111, 115 (1933). The taxpayer also generally bears the burden of proving that he is entitled to any claimed deduction or credit. See Rule 142; INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992). A taxpayer is generally required to keep sufficient records to substantiate any claimed deduction or credit. See sec. 6001; Hradesky v. Commissioner, 65 T.C. 87, 89 (1975), aff'd per curiam, 540 F.2d 821 (5th Cir. 1976). The burden of proof shifts to the Secretary if the taxpayer produces credible evidence on any factual issues and the taxpayer satisfies the requirements of section 7491(a)(2). Sec. 7491(a)(1). 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 Petitioner has not done so in this case and therefore 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 bears the burden of convincing the Court that respondent's determination was erroneous. Dependency Exemption Deduction Section 151(c) permits a taxpayer to deduct an exemption for each dependent as that term is defined under section 152. Section 152(a) provides that a dependent must either be a qualifying child or a qualifying relative. Section 152(c)(1) defines a qualifying child as a child who bears a specified relationship to the taxpayer, who lived with the taxpayer for more than one-half of the tax year at issue, and who did not provide more than one-half of his or her own support during the calendar year. A qualifying child must either be less than 19 years old or a student who is less than 24 years old, or permanently and totally disabled. Sec. 152(c) (-3). In short, the taxpayer 18 must show that the child satisfies both the age and 19 20 21 22 23 24 25 relationship requirements, the residency requirement, and the support requirement of section 152(c)(1) and (3) for the child to be the taxpayer's qualifying child for a particular taxable year. Respondent does not dispute that petitioner's daughter bears a qualifying relationship to petitioner and that during 2011 petitioner's daughter 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 7 1 met the age requirement under section 152(c). 2 3 4 5 6 However, respondent contends that petitioner has not proven that his daughter lived with him for more than one-half of 2011. We agree. Petitioner testified and we so find that his daughter did not live with him during 2011. 7 Accordingly, petitioner's daughter is not a 8 9 10 11 12 qualifying child under section 152(c). Section 152(d) defines a qualifying relative as an individual who bears a specified relationship to the taxpayer, who earned gross income less than the exemption amount defined in section 151(d), who had 13 more than one-half of his or her support provided for 14 15 16 17 18 19 by the taxpayer during the tax year, and who is not the qualifying child of any other taxpayer. An individual satisfies the specified relationship requirement if the individual is the taxpayer's child. Sec. 152(d)(2)(E). Petitioner must prove with credible evidence the 20 total amount of his daughter's support furnished by 21 all sources for 2011 for us to conclude that 22 23 24 25 petitioner provided more than one-half of that support. See Blanco v. Commissioner, 56 T.C. 512, 514-515 (1971). Although petitioner introduced some evidence that he may have contributed to his 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 8 daughter's support during 2011, he did not prove the amount of support he contributed during 2011 nor did he prove the total amount of support that his daughter received from all sources. Accordingly, we conclude that petitioner has failed to carry his burden of proving that petitioner's daughter was a qualifying child or relative for 2011. Petitioner is not entitled to the dependency exemption deduction with respect to his daughter. The Earned Income Credit Section 32 permits taxpayers with low earned income who qualify as "eligible individuals" to claim a tax credit. An eligible individual is (a) a person who has a "qualifying child", or (b) a person between the ages of 25 and 65 who resided in the United States for more than..half the taxable year and who was not a dependent for whom a dependency exemption deduction is allowed to another taxpayer. Sec. 32(c) (1) (A). The term "qualifying child" has the same meaning for purposes of both section 152(c) and section 32. Sec. 32(c)(3). Petitioner claimed an EIC with respect to his daughter for 2011. As we held earlier, petitioner's 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 9 1 2 3 4 daughter was not a qualifying child for 2011. Consequently wë sustain respondent's determination disallowing an EIC with respect to petitioner's daughter. 5 Child Tax Credit and Additional Child Tax Credit 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Section 24 allows a taxpayer a child tax credit, a portion of which may be refundable as an additional child tax credit, in the case of a taxpayer who meets certain threshold earned income amounts or in the case of a taxpayer with three or more qualifying children. Sec. 24(d)(1). The taxpayer must have at least one qualifying child to claim the additional tax credit. Sec. 24(c). The term "qualifying child" means a qualifying child of the taxpayer, as defined in section 152(c), who is under age 17. Sec. 24(c)(1). Petitioner claimed a child tax credit with respect to his daughter for 2011. Because petitioner did not prove that his daughter was a qualifying child as defined in section 152(c) for 2011, he is not entitled to a child tax credit or additional child tax credit with respect to her. To reflect the foregoing and respondent's concessions, decision will be entered under Rule 155. THIS CONCLUDES THE COURT'S ORAL FINDINGS OF FACT 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 10 AND OPINION IN THIS CASE. (Whereupon, at 9:40 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