TAX COURT OPINION

Case: Andrew T. Eison
Docket Number: 18498-13S
Judge: Marvel
Opinion Type: bench
Filed: 12/16/2014
Pages: 9

Sub d (cid:16)060u/ UNITED STATES TAX COURT WASHINGTON, DC 20217 ANDREW T. EISON, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. ) ) ) ) Docket No. 18498-13S ) ) ) 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 in the above case before Judge L. Paige Marvel at Atlanta, Georgia, on November 21, 2014, containing the Court's oral findings of fact and opinion rendered at the trial session at which this case was heard. In accordance with the Court's oral findings of fact and opinion, decision will be entered for respondent. (Signed) L. Paige Marvel Judge Dated: Washington, D.C. December 16, 2014 8EMED DEC 1 7 2014 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 November 21, 2014 Andrew T. Eison v. Commissioner Docket No. 18498-13S 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 (Code), and Rules 170 through 174 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 Code and Rule 152 of the Tax Court Rules of Practice and Procedure. Unless otherwise indicated, subsequent section references are to the Code, and in effect for the year in issue. And Rule references are to the Tax Court Rules of Practice and Procedure. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 4 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 Andrew T. Eison appeared pro se. Shannon E. Loechel appeared on behalf of respondent. Respondent determined a deficiency of $4,131 in petitioner's Federal income tax for 2011. The issues for decision are: (1) whether petitioner is entitled to claim head of household filing status for 2011; and (2) whether petitioner is entitled to claim the earned income tax credit for 2011. We conclude that petitioner is not so entitled. FINDINGS OF FACT Petitioner and his former wife divorced in 2006 pursuant to a written settlement agreement, which was filed in court on November 21, 2006, and a Final Judgment and Decree of Divorce filed on December 27, 2006. At the time of the divorce, petitioner and his former wife had three minor children: A.D.E., E.R.E., and E.B.E. (the children). The divorce decree awarded petitioner's former wife principal custody of the children. Petitioner was awarded visitation rights, including alternating weekends, some holidays, and an occasional additional weekend. Petitioner's former wife and the court that presided over the divorce proceeding agreed that petitioner could claim dependency exemptions for the children without qualification. However, 866.488.DEPO www.CapitalReportingCompany.com I Capital Reporting Company 1 petitioner's former wife did not execute any Form 5 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent. During taxable year 2011, the children resided with their mother in Florida but visited petitioner periodically. Petitioner estimates that his children spent 114 days at his home during 2011. On his Form 1040, U.S. Individual Income Tax Return, for taxable year 2011, which was prepared by a return preparation firm, petitioner claimed a head of household filing status. Petitioner also claimed three dependency exemptions for the children, a child tax credit, an additional child tax credit, and an earned income tax credit. This resulted in a refund that was automatically sent to petitioner's former wife to pay child support arrears pursuant to section 6402(c). The person who prepared the return for petitioner did not ask if he maintained a household that was the principal place of abode for one or more of his children during 2011, but petitioner provided copies of the settlement agreement and decree for the preparer to review. Respondent examined petitioner's 2011 return. Following the examination, respondent issued to petitioner a notice of deficiency changing 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 6 petitioner's filing status from head of household to single and disallowing petitioner's claimed earned income tax credit. Respondent did not disallow petitioner's claimed dependency exemptions or child tax credits and, except for computational adjustments, has not asserted any issue regarding these items. DISCUSSION The Commissioner's deficiency determinations are presumed correct, and the taxpayer has the burden of proving that the notice of deficiency is erroneous. Rule 142; Welch v. 1 2 3 4 5 6 7 8 9 10 11 12 13 Helvering, 290 U.S. 111,115(1933). 14 15 16 Under section 7491, the burden of proof may shift to the Commissioner but only if the taxpayer satisfies all of the section 7491 requirements. 17 Petitioner has not done so in this case and therefore 18 19 20 21 22 23 24 25 bears the burden of convincing the Court that respondent erred by rejecting petitioner's head of household filing status and disallowing the earned income tax credit for the children. Head of Household Filing Status To qualify for head of household filing status under section 2(b), a taxpayer must satisfy the following requirements: (1) the taxpayer must 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 7 1 2 not be married at the close of the taxable year or be a surviving spouse for that year; (2) the taxpayer 3 must maintain as his home a household that 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 constitutes the principal place of abode of a qualifying child within the meaning of section 152(c) or of any other person who is a dependent of the taxpayer under section 151; and (3) the taxpayer must furnish more than half of the cost of maintaining the household during the relevant taxable year. The cost of maintaining the household includes expenses incurred for the mutual benefit of the persons living in the household such as rent or mortgage payments, property taxes, property insurance, utility charges, upkeep and repairs, and food consumed on the premises. Sec. 1.2-2(d), Income Tax Regs. 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. 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 25 must show that the child satisfies both the age and 866.488.DEPO www.Capita1ReportingCompany.com Capital Reporting Company 8 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 the children bear qualifying 6 A relationship to petitioner and meet the age requirement under section 152(c). However, respondent contends that petitioner has not established that the residency requirement of section 152(c) has been satisfied. We agree. Pursuant to the divorce decree, the children spent alternating weekends and some holidays 1 2 3 4 5 6 7 8 9 10 11 .12 | |13 with petitioner, along with an occasional additional 14 15 16 17 18 19 20 21 22 23 24 25 weekend. The total time the children spent with petitioner was well below the threshold required to claim head of household status. Petitioner acknowledges that the children did not reside with him ,for more than half of 2011. Rather, petitioner claims that he is entitled to head of household filing status because the divorce decree permits him to claim dependency exemptions for the children. The divorce decree cannot alter the legal requirement that the children must have resided with petitioner for more than half the year before he may claim head of household status. See sec. 152(e). Accordingly, 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company petitioner is not entitled to head of household 9 filing status. Earned Income Tax Credit Section 32 permits taxpayers with low earned income who qualify as an "eligible individual" 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). As explained above, petitioner did not have any qualifying children within the meaning of section 152(c) for taxable year 2011. Further, petitioner's adjusted gross income for 2011 exceeded the limit of $13,660 for taxpayers without qualifying children to claim the credit. See sec. 32(b); Rev. Proc. 2011- 12, sec. 2.04,2011-2 I.R.B. 297,299. Accordingly, we sustain respondent's disallowance of petitioner's claimed earned income tax credit. CONCLUSION Petitioner failed to prove that he 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 10 1 maintained a household that constituted the principal 2 3 4 place of abode of the children during taxable year 2011. He also failed to establish that the children were qualifying children for purposes of section 32, 5 which allows an earned income tax credit under 6 7 8 9 10 11 12 13 14 15 16 17 certain circumstances. Petitioner maintains that he should not be responsible for the deficiency because the refund went directly to his former wife for child support arrears. However, respondent's intercept of petitioner's claim for a refund due to child support arrears does not foreclose a subsequent determination of a deficiency in petitioner's tax for the same taxable year. See 6402 (c) ; Terry v. Commissioner, 91 T.C. 85 (1988). We have considered the parties' remaining arguments and, to the extent not discussed above, conclude those arguments are irrelevant, moot, or 18 without merit. Consequently, decision will be entered for respondent. THIS CONCLUDES THE COURT'S ORAL FINDINGS OF FACT AND OPINION IN THIS CASE. (Whereupon, at 9:41 a.m., the above- entitled matter was concluded.) 19 20 21 22 23 24 25 866.488.DEPO www.CapitalReportingCompany.com