TAX COURT OPINION

Case: John Anthony VanHouten
Docket Number: 15922-07
Judge: Colvin
Opinion Type: bench
Filed: 04/07/2009
Pages: 7

S DIM . eCC D zs.s - avg. ~- UNITED STATES TAX COURT WASHINGTON , DC 2021 7 JOHN ANTHONY VAN HOUTEN , Petitione r V . 'Docket No . 15922-07 . COMMISSIONER OF INTERNALREVENUE, Respondent ORDER Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it i s 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 Tampa, Florida, on February 25, 2009, containing his oral findings of fact and opinion rendered at the conclusion of the trial . In accordance with the oral findings of fact and opinion, decision will be entered pursuant to Rule 155 . (Signed) Joseph Robert Goeke Judge Dated : Washington, D .C . . April 7, 2009 SERVED APR - 8 2009 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 3 Bench Opinion by Judge Joseph Robert Goeke Feb . 25, 200 9 Van Houten v . Commissioner Docket No . : 15922-0 7 THE COURT : The Court has decided to render ora l findings of fact and opinion in this case, and the followin g represents the Court's oral findings of fact and opinion . The oral findings~of fact and opinion shall not be relie d upon as precedent in any other case . This case was tried as a regular Tax Court case . The case originated with a deficienc y determination by the Respondent for the taxable year 2004 . That deficiency is based upon the disallowance of thre e dependency exemptions claimed by the Petitioner . Petitione r also asserts as a defense in this case, in addition to hi s claim that he is entitled to the dependency exemption, a defense that this tax liability has been discharged by hi s Chapter 7 bankruptcy . He filed a petition in bankruptcy o n April 16, 2008 which was after this case was docketed in th e tax court . He was subsequently discharged in the bankruptc y action while the tax court case was-still pending . As an additional matter,' before considering th e merits of the underlying deficiency, we must determin e whether we have jurisdiction to determine the applicabilit y of the discharge in bankruptcy . In Neilson v . Commissioner , 94 T .C . 1 (1990), we stated on page seven, as a general rule the Tax Court' s Heritage Reporting Corporation (202) 628-4888 1 jurisdiction to consider tax matters depends on a notice of 2 deficiency in a timely filed petition, citations omitted . 3 This Court has limited jurisdiction conferred by statute, 4 citations omitted . The determination of an income ta x 5 deficiency has )<nothing to do with collection of the tax, LC9 4 6 nor any similarity to an action for collection of a debt . 7 Nor does it involve any other rights and remedies of th e 8 sort traditionally enforced in an action at law . Swanson v . 9 10 Commissioner , 65 T .C . 1180, 1184 (1976) . " '~'(cid:127)^}° ^on- ; nu ^^ , "In exercising our jurisdiction 11 to redetermine deficiencies we are without jurisdiction to } 12 'allow or disallow a claim against a debtor's estate . . . or 13 to discharge taxes as a bankruptcy court might' . 14 Fotochrome, Inc . v . Commissioner , 57 T .C . 842, 847 (1972) . " 15 In accord with Neilson and other precedent such as 16 Ferguson v . Commissioner , T .C . Memo . 2006-32, we are without 17 subject matter jurisdiction to issue a ruling on th e 18 dischargability position offered by Petitioner relative to 19 his claim that the taxes for the year 2004 were discharged 20 in bankruptcy . This is true because the present case is a 21 deficiency case and not a case under section 6330 involving 22 a determination of Respondent's collection actions, in which 23 situation we would have jurisdiction over the merits of the 24 underlying bankruptcy claim . Washington v . Commissioner , 25 120 T .C . 114 (2003) . Heritage Reporting Corporation (202) 628-4888 5 1 We now move to Respondent's deficienc y 2 determination and the merits of Respondent's disallowance of 3 the three dependents which Petitioner has claimed . We first 4 note that Respondent has conceded that the Petitioner i s 5 entitled to claim one of the three dependents he sought on 6 his 2004 return . Respondent referred to this dependent as 7 Petitioner's middle child . 8 Also in dispute in this case is the claim fo r 9 child tax credit which Respondent argues Petitioner would 10 only be entitled to if he is entitled to one of the other 11 two claimed dependents . 12 The facts of this case relative to the claime d 13 dependents are such that Petitioner acknowledges that he was 14 not the custodial parent of the two dependents in dispute . 15 Pursuant to the marital settlement agreement and the final 16 judgment of dissolution of marriage, Petitioner's forme r 17 spouse was the custodial parent of the children during the 18 years in question . 19 The Commissioner's determination and the notice of 20 deficiency are presumed correct and the taxpayer bears the 21 burden to prove that the determinations are in error . See 22 Rule 142(a) of the Tax Court rules of practice and 23 procedure . 24 The burden of proof on actual matters that affect 25 a taxpayer's tax liability may be shifted to th e Heritage Reporting Corporation (202) 628-4888 I 6 1 Commissioner where the "taxpayer introduces credibl e 2 evidence with respect to the underlying . . " r a_1-- y' _ 3 issue . See section 7491(a)(1) . it 4 Petitioner has not alleged that section 7491(a) 5 applies, however the Court need not decide whether the 6 burden has shifted to the Respondent pursuant to section 7 7491(a) since the Court's analysis is based on the record 8 before it and not on who bears the burden of proof . 9 Concerning the two dependency exemptions remaining 10 in dispute, Respondent urges the Court to sustain the 11 disallowance of Petitioner's dependency exemption deductions 12 since Petitioner was not the custodial parent of the tw o 13 children in question and he did not attach Form 8332 or its 14 equivalent to his Form 1040, as required by sectio n 15 152(e)(2) and section 1 .152-4T(a), Q&A-3, Temporary Income 16 Tax Regs ., 49 F .2d register 34459 (August 31, 1984) . 17 The Petitioner's entitlement to the dependency 18 exemptions remaining in dispute in this case hinge o n 19 section 152(a)(e) which limit dependency exemptio n 20 deductions in the case of the wers-t or otherwise separated 21 parents . Tit pertinent part, section 152(e)(1) sets forth 22 the following general rule : If the child received over hal 23 of his /her support during the calendar year from divorced 24 parents and the child was in the custody of one or both o f 25 the parents for more than one half of the calendar year then Heritage Reporting Corporatio n (202) 628-4888 7 1 the child is treated as receiving over half of his/her 2 support during the calendar year from the parent havin g 3 custody for the greater portion of the calendar year . This 4 parent is characterized as the custodial parent . In thi s 5 case, there is no pre-1975 instrument which would provide an 6 exception to this rule pursuant to . section 152(e)(3)(4) . 7 The custody of the dependents in question is not in dispute in this case . In order to sustain his positio n 9 since he was not the custodial parent the Petitioner must 10 fit within the exception provided by section 152(e)(2) , 11 which provides that if the custodial parent signs a written 12 declaration that she will not claim the child as a dependent 13 and a non-custodial parent attaches the written declaration 14 to his return for the taxable year, then the non-custodial 15 parent is entitled to the dependency exemption deduction . 16 In order for the non-custodial parent to claim th e 17 dependency exemption deduction section 152(e)(2) clearly 18 requires the custodial parent to release the dependenc y 19 exemption deduction by signing a written declaration to the 20 effect . See Miller v . Commissioner , 114 T .C . 184, 19 5 21 (2000) ; see also section 1 .152-4T(a), Q&A-3, Temporary 22 Income Tax Regs ., supra . 23 The written declaration may be made on a form 24 provided by the I .R .S . or a document that conforms to its 25 substance . See Miller v . Commission , supra, 190-191 . The Heritage Reporting Corporation (202) 628-4888 8 1 written declaration is embodied in Form 8332, which 2 incorporates the requirements of section 152(e)(2) . 3 4 In the present case no such form was attached to 5 Petitioner's return and the Court is left with no recourse 6 but to sustain Respondent's determination relative to th e 7 remaining two dependency exemptions in dispute . Because of 8 Respondent's concession in determining the amount o f 9 deficiency to be assessed a Rule 155 computation will be 10 necessary in this case . As stated previously, the Court 11 makes no determination relative to Petitioner's claim that 12 the tax liability in question should be discharged fro m 13 bankruptcy because .the Court has no jurisdiction over that 14 question in this deficiency proceeding . 15 This ends the Court's bench opinion in this case . 16 (Whereupon, at 2 :36 p .m ., the bench opinion in the 17 above-entitled matter was concluded . ) 18 19 20 21 22 2 3 24 25 Heritage Reporting Corporation (202) 628-4888