TAX COURT OPINION

Case: Randy A. Whitney & Gina Whitney
Docket Number: 15383-16
Judge: Kerrigan
Opinion Type: bench
Filed: 12/01/2017
Pages: 7

SR UNITED STATES TAX COURT WASHINGTON, DC 20217 RANDY A. WHITNEY & GINA WHITNEY, Petitioner(s), v. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ) ) Docket No. ) ) ) ) 15383-16. ORD E R 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 petitioners and to respondent a copy of the pages of the transcript of the trial in the above case before Judge Kathleen Kerrigan at San Francisco, California on October 24, 2017, containing her oral findings of fact and opinion rendered at the conclusion of the trial session at which this case was heard. In accordance with the oral findings of fact and opinion, a decision will be entered for respondent. (Signed) Kathleen Kerrigan Judge Dated: Washington, D.C. December 1, 2017 SERVED Dec052017 3 1 2 3 4 5 6 7 8 9 Bench Opinion by Kathleen Kerrigan October 24, 2017 Randy A. Whitney & Gina Whitney v. Commissioner Docket No. 15383-16 THE COURT: The Court has decided to render in this case the following as its oral Findings of Fact and Opinion, which 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 10 Revenue Code and Rule 152 of the Tax Court Rules of 11 Practice and Procedure. Unless otherwise indicated, all 12 section references are to the Internal Revenue Code in 13 effect for the tax year in issue, and all Rule references 14 15 are to the Tax Court Rules of Practice and Procedure. By notice of deficiency dated May 23, 2016, 16 Respondent determined a deficiency of $3,259 for tax year 17 2014. The issue for our consideration is whether 18 petitioners are entitled to the disallowed dependency 19 exemption. 20 Trial in this case was conducted on October 23, 21 2017, in San Francisco, California. Petitioner husband 22 23 24 25 represented petitioners. Respondent was represented by Sandeep Singh. The parties' Stipulation of Facts was admitted into evidence along with the attached exhibits. I We find the following facts: cribers 973)406-2250|operations@escribers.net|www.escribers.net Findings 4 Petitioners resided in California when they timely filed their petition. Petitioners timely filed their 2014 Form 1040, U.S. Individual Income Tax Return, as married filing jointly. Petitioner husband has a son from a prior 1 2 3 4 5 6 7 marriage. Petitioners claimed him as a dependent on their 8 9 tax return. Petitioners attached to their 2014 tax return a "Notice of Judgment Entry" (notice) from Alameda County 10 Superior Court, which granted petitioner a divorce from 11 his former wife. The divorce was effective on October 1, 12 13 14 2004. The notice provided that petitioner husband shall have the tax exemption for the minor child on even 15 years starting in 2004. Petitioner's husband's former 16 wife was granted primary physical custody and he was 17 18 19 20 21 22 ordered to pay child support. Neither petitioner husband nor his former wife signed the notice. Respondent disallowed the dependency exemption that petitioners claimed on their 2014 tax return. Opinion Generally, the Commissioner's determinations are 23 presumed correct, and the taxpayer bears the burden of 24 proving that those determinations are erroneous. Rule 25 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). } (973)406-2250]operationseescribers.net|www.escribersmet 5 1 2 3 4 5 6 7 8 9 Deductions and credits are a matter of legislative grace, and the taxpayer bears the burden of proving that he or she is entitled to any deductions or credit claimed. Rul!e 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 10 liability. Petitioners do not argue or provide evidence 11 of the conditions of section 7491(a) are fully satisfied; 12 therefore, the burden of proof remains on petitioners. 13 Dependency Exemption Deduction 14 15 16 17 18 An individual is allowed as a deduction an exemption for "each individual who is a dependent (as defined in section 152) for the taxable year," sec. 151(c). Section 152(a) defines the term "dependent" to include a "qualifying child". Generally, a "qualifying 19 child" must: (i) bear a specified relationship to the 20 21 taxpayer (e.g., be a child of the taxpayer), (ii) have the same principal place of abode as the taxpayer for more 22 than one-half of such taxable year, (iii) meet certain a e 23 requirements, and (iv) not have provided over one-half of 24 25 such individual's support for the taxable year at issue. Sec. 152(c)(1). } cribers (973)406-2250|operations@escribersaietjwww.escribers.net 1 2 3 4 5 6 7 8 9 Section 152(e)(1) provides a special rule for divorced or legally separated parents which permits a noncustodial parent, under certain circumstances, to clain a dependency exemption deduction for a child. See sec. 152(e); Espinoza v. Commissioner, T.C. Memo. 2011-108; sec. 1.152-4T(a), Q&A-2, Temporary Income Tax Regs., 49 Fed. Reg. 34459 (Aug. 31, 1984). For purposes of section 152, the "custodial parent" is the parent having custody of the child for the greater portion of the calendar year. 10 Sec. 152(e) (4) (A). The "noncustodial parent" is, 11 12 13 conversely, the parent without custody of the child for the greater portion of the calendar year. Sec. 152(e)(4) (B). Petitioner husband is the noncustodial parent of his 14 child because petitioner's former wife had primary 15 physical custody of the child. 16 17 18 19 As relevant to this case, section 152(e) (2) allows the noncustodial parent to claim a dependency deduction for a child if: (A) the custodial parent signs a written 20 declaration n such a manner and form as the Secretary 21 may by regulations prescribe that such custodial parent 22 will not claim such child as a dependent for any taxable 23 year beginning in such calendar year, and 24 (B) the noncustodial parent attaches such 25 written declaration to the noncustodial parent's return cribers (973)406-2250|operations@escribers.netjwww.escribers.net 7 1 2 3 4 5 6 7 8 9 10 11 12 for the taxable year beginning during such calendar year. The declaration required by section 152(e)(2) must be made on either Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent, or on a statement conforming to the substance of that form. See sec. 1.152-4T(a), Q&A-3, Temporary Income Tax Regs.; Armstrong v. Commissioner, 139 T.C. 468, 472 (2012), aff'd, 745 F.3d 890 (8th Cir. 2014). Form 8332 requires a taxpayer to furnish: (1) the name of each child; (2) the name and Social Security number of the noncustodial parent claiming the dependency exemption deduction; (3) the Social Security number of the custodial 13 parent; (4) the signature of the custodial parent; (5) the 14 15 date ·of the custodial parent's signature; and (6) the year or years for which the claims were released. See Miller 16 v. Commissioner, 114 T.C. 184, 190 (2000), aff'd sub nom. 17 18 19 Lovejoy v. Commissioner, 293 F. 3d 1208 (10th Cir. 2002). "The exemption may be released for a single year, for a number of specific years (for example, alternate years), 20 or for all future years, as specified in the declaration," 21 22 23 24 sec. 1.152-4T(a), Q&A-4, Temporary Income Tax Regs. Petitioners contend that the notice is documentation in support of the dependency exemption for tax year 2014. Petitioner's former wife, the custodial 25 parent, did not sign the notice. We have held previously dans (973)406-2250|operations@escribersnet|www.escríbers.net that the signature requirement of section 152(e)(2) (A) ir critical and that absent the signature of the custodial parent, the divorce decree does not conform to the substance of Form 8332. Miller v. Commissioner, 114 T.C 8 at 193. Because the notice is unsigned, it does not conform to the substance of Form 8332. Consequently, respondent's disallowance of the dependency exemption is sustained. A decision will be entered for respondent. This concludes the Court's oral Findings of Fact and Opinion in this case. (Whereupon, at 1:11 p.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 (973)406-2250|operations@escribersmet|wwwescribers.net