TAX COURT OPINION

Case: Douglas O. & Michelle L. Kitchen
Docket Number: 25450-11S
Judge: Marvel
Opinion Type: bench
Filed: 02/21/2013
Pages: 9

RMM UNITED STATES TAX COURT WASHINGTON, DC 20217 DOUGLAS O. & MICHELLE L. KITCHEN, Petitioners, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. ) ) ) ) ) Docket No. 25450-11S ) ) ) ) ) OR D E R Pursuant the Rule 152(b), Tax Court Rules of Practice and Procedure, it is ORDERED that the Clerk of the Court shall transmit to petitioners and to respondent a copy of the pages of the proceedings of the above case before Judge L. Paige Marvel in Seattle, Washington, on February 8, 2013, containing her oral findings of fact and opinion. In accordance with the oral findings of fact and opinion, decision will be entered for respondent. (Signed) L. Paige Marvel Judge Dated: Washington, D.C. February 21, 2013 SERVED Feb 22 2013 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 L. Paige Marvel February 8, 2013 Douglas O. & Michelle L. Kitchen v. Commissioner Docket No. 25450-11S THE COURT: 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 case was heard pursuant to the provisions of Section 7463 of the Internal Revenue Code of 1986 as amended, and Rules 170 through 175 of the Tax Court Rules of Practice and Procedure. Pursuant to Section 7463(b), the decision to be entered is not reviewable by any other court, and this opinion shall not be treated as precedent for 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. Hereinafter, in this bench opinion, unless otherwise indicated, section references are to the Internal Revenue Code of 1986 (Code) as amended and in effect for the years in issue. Rule references 866.488.DEPO twww.CapitalReportingCompany.com Capital Reporting Company 1 are to the Tax Court Rules of Practice and Procedure. 2 Monetary amounts have been rounded to the nearest 3 4 5 6 7 8 9 10 11 12 13 dollar. Douglas O. Kitchen and Michelle L. Kitchen appeared Nick G. Nilan appeared on behalf of Re spondent . Respondent determined a deficiency of $1,125 in Petitioner's Federal income tax for 2009. Th-ic concludes the Court's oral f+ntlènge--e-f f-ac--t,--a-r+d--ep-i-néen--i-rwtbis_casa. he i s s ue s f o r decision are (1) whether Petitioners are entitled to a dependency exemption for Douglas O. Kitchen's daughter, K.A.K., for 2009; and (2) whether 14 Petitioner's are entitled to a dependency exemption 15 16 17 18 19 for Douglas O. Kitchen's daughter, S.R.K., for 2009. FACTS Some of the facts have been stipulated. The stipulated facts are incorporated herein by this reference. Douglas O. Kitchen was married to Sally 20 Jill Henderson Kitchen (Ms . Henderson-Kitchen) from 21 22 23 24 25 1985 through 1999, and the couple had four children from their marriage, including L.T.K., K.A.K, and S.R.K. Pursuant to the findings of fact and conclusions of law entered in the divorce proceeding, both parties were awarded joint custody of the four 866.488.DEPO twww.CapitalReportingCompany.com Capital Reporting Company 5 1 2 3 4 children, and Ms. Henderson-Kitchen was designated as the primary custodial care provider. We infer from the record in this case that K.A.K. and S.R.K. resided during the years at issue with Ms. Henderson- 5 Kitchen. 6 7 8 9 With respect to the claiming of dependency exemptions for the two children, the findings of fact and conclusions of law provided that Mr. Kitchen had _ the option of purchasing the dependency exemption 10 deductions from Ms. Henderson-Kitchen, provided that I 11 Mr. Kitchen first notifies Ms. Henderson-Kitchen of 12 13 14 15 16 17 18 his intent to purchase the dependency exemptions before April 10 of each year, and to pay Ms. Henderson-Kitchen the amount of increased tax that Ms. Henderson-Kitchen would pay by allowing Mr. Kitchen to claim the exemptions. Ms. Henderson- Kitchen did not sign the divorce decree. Petitioners married on June 18, 2004. 19 Petitioners timely filed a £orm 1040 U.S. Individual 20 Income Tax Return for 2009. On their return, 21 Petitioners claimed exemption deductions for 22 23 24 25 themselves and four dependents, including exemption deductions for L.T.K., K.A.K, and S.R.K. Because Ms. Henderson-Kitchen would not respond to Mr. Kitchen's request for information that would assist him in 866.488.DEPO twww.CapitalReportingCompany.com Capital Reporting Company 6 1 complying with the terms of the divorce decree, 2 Petitioners were unable to and did not attach a Form 3 4 5 6 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent, or a document conforming to the substance of Form 8332 to their 2009 return. Respondent determined that 7 Petitioners were not entitled to dependency 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 exemptions with respect to K.A.K. and S.R.K. for 2009. Dependency Exemptions Section 151(c) permits a taxpayer to deduct an exemption for each dependent, as that term is defined under Section 152. Section 152 provides that a dependent must be either 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 tax year. For purpose of Section 152 (c) (1) (A), a child satisfies the relationship requirement if the child is a child of the taxpayer, or a descent of such child, or a brother, sister, stepbrother or stepsister of the taxpayer, or any such relativel 866.488.DEPO twww.CapitalReportingCompany.com Capital Reporting Company Section 152(c) (2), a qualifying child must be less than 19 years old, a student who is less than 24 years old, or permanently and totally disabled. Section 152(c)3. Section 152(e) sets forth a special 7 rule for divorced parents that supersedes the residency and support requirements of Section 152 (c) (1) (B). Section 152(e) (1) provides that notwithstanding those requirements, if a taxpayer receives over one-half of his support during the calendar year from his parents who are divorced, legally separated, separated under a written separation agreement, or live apart at all times during the last six years of the relevant calendar year, and the child is in the custody of one or of his parents for more than one-half of that year, the child will be treated as being the qualifying child of the non-custodial parent if the requirements of either Section 152(e) (2) or (3) are met. Section 152(e) (2) permits the non-custodial parent to claim the dependency exemption deduction 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 with respect to his or her child if the custodial 23 24 25 parent signs a written declaration that the custodial parent will not claim the child as a dependent for that year, and the non-custodial parent attaches the 866.488.DEPO twww.CapitalReportingCompany.com Capital Reporting Company 8 1 written declaration to his return for the taxable 2 3 4 5 6 7 8 9 10 11 12 13 year. Because Petitioner is a non-custodial parent whose claim to the dependency exemption deductions for K.A.K. and S.R.K. is predicated on a provision in the divorce decree, the special rule in Section 152(e) (2) controls whether Petitioner is entitled to the dependency exemption deductions he claimed. In order for a non-custodial parent to be entitled to a dependency exemption deduction under Section 152(e) (2), the non-custodial parent must have attached to his or her return either a Form 8332 or a document conforming in substance to Form 8332. See 14 Miller v. Commissioner, 114 T.C. 184, (2000), 15 16 17 18 19 20 21 22 23 24 25 affirmed on another ground sub nom. Lovejoy v. Commissioner, 293 F.3d, 1208 (10th Cirgm-i-t 002) . The written declaration required under Section 152(e) must be "an unconditional release of the custodial parent's claim to the child as a dependent for the year or years for which the declaration is effective." Section 1.152-4 (e) (1) (i), Income Tax Regs., "A declaration is not unconditional if the custodial parent's release of the right to claim the child as a dependent requires the satisfaction of any condition, including the non- 866.488.DEPO twww.CapitalReportingCompany.com Capital Reporting Company 9 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 custodial parents meeting of an obligation, such as the payment of support." Id. Additionally, "[a] court order, or decree, or a separation agreement may not serve as a written declaration." Section 1.152- 4 (e) (1) (ii), Income Tax Regs. Mr. Kitchen credibly testified that he tried to exercise his option to purchase the dependency exemptions from Ms. Henderson-Kitchen, but she would not cooperate. However, Petitioners concede that they did not attach the required written declaration to their 2009 return. See Section 152(e) (2) (B). Moreover, even if Petitioners had attached the divorce decree to the return, they would not be entitled to the exemption deductions, because Ms. Henderson-Kitchen did not sign the divorce decree. See Section 152(e) (2) (A). Mr. Kitchen's right to purchase the exemption was not unconditional. See Section 1.152-4 (e) (1) (i), Income Tax Regs.7 nd the regulationsspecifically provide that "[a] court order or decree or a separation agreement may not serve as a written declaration", Section 1.152-4 (e) (1) (ii), Income Tax Regs. Accordingly, we conclude that Petitioners are not entitled to claim dependency exemption ,deductions for K.A.K and S.R.K. for 2009. To reflect 866.488.DEPO twww.CapitalReportingCompany.com Capital Reporting Company the foregoing decision will be entered for Respondent. This concludes the Court' s oral findings of fact and opinion in this case. 10 (Whereupon, at 11:58 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 twww.CapitalReportingCompany.com