TAX COURT OPINION

Case: Charles David Congi, Sr.
Docket Number: 4292-08
Judge: Colvin
Opinion Type: bench
Filed: 11/19/2008
Pages: 7

5~,f! vu: S vz CAL TFal' . JUDGE Ao~TZ FILE S UNITED STATES TAX COURT WASHINGTON , DC 2021 7 CHARLES DAVID CONGI, SR ., Petitioner, v . ) Docket No . 4292-0 8 COMMISSIONER OF INTERNAL REVENUE, Respondent . O R D E R 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 of the above case before Judge Mark V . Holmes at Buffalo, New York on October 27, 2008, containing his oral findings of fact and opinion rendered after the conclusion of trial . In accordance with the oral findings of fact and opinion, a decision for respondent will be entered . Dated : Washington, D .C . November 19, 2008 (Signed) Mark V. Holmes Judge SERVED NOV 2 0 2008 3 1 Bench Opinion by Judge Mark V . Holmes October 27, 2008 2 Charles David Congi, Sr . 4292-0 8 3 In the case of Charles Congi, Sr . v . Commissioner 4 of Internal Revenue , Docket No . 4292-08, the Court ha s 5 decided to render oral findings of fact and opinion , and the 6 following represents the Court's oral findings of fact and 7 opinion . 8 This bench opinion is made pursuant to th e 9 authority granted by Section 7459(b) of the Internal Revenue 10 Code of 1986, as amended, and Rule 152 of the Tax Cour t 11 Rules of Practice and Procedure . 12 Mr . Congi, Sr ., is a resident of New York and wa s 13 at the time he filed his petition, ai part/ to th e 14 stipulation (cid:127) .e was the basis of the record in this case, 15 together with his testimony and that of his son, Charles, 16 Jr . 17 The key facts are that Mr . Congi, Sr ., lived a t 18 his home on 59th Street, Niagara Falls, New York, during tax 19 year 2000 . He claimed his granddaughter , Savannah, as a 20 qualifying child for the dependent's exemption, earned 21 income credit, and child tax credit . 22 The problem is that, in 2006, his son, Charle s 23 Congi Jr ., the father of Savannah, also claimed his daughter 24 as a qualifying child for these tax benefits . 25 I do find that Mr . Congi, Sr ., testified Heritage Reporting Corporation (202) 628-4888 4 1 truthfully and supported Savannah entirely during that year . 2 He acted as most fathers would act, by taking her to th e 3 doctor, by buying her clothes, by, with a few exceptions , 4 preparing her meals, buying her food, and recreation ; doing 5 everything that a father would otherwise ordinarily do . 6 But the question is whether, under the Tax Code, 7 this is enough . For that, I have to look to Section 152 of 8 the Internal Revenue Code, as it is in effect for the year 9 2006 . 10 There are two people who claimed Savannah for the 11 various tax benefits I've listed . One, of course, is her 12 grandfather, and one is her father . 13 So the first question that I have to ask is, is 14 Savannah what's called a "qualifying child" under th e 15 Internal Revenue Code ? 16 Now, a "qualifying child" means with respect to 17 any taxpayer, and, first, we'll look at Mr . Congi, Sr . , 18 someone who bears a particular relationship to Savannah -- I 19 turn to the list of relationships, and it turns out tha t 20 being grandfather is one of the relationships, so Mr . Congi, 21 Sr ., is right there ; who has the same place of abode as Mr . 22 Congi, Sr ., for more than one-half of the taxable year, and 23 I find here that he testified truthfully, and all of th e 24 records support that she lived with him, not just for the 25 taxable year, but for the whole year ; and who meets the age Heritage Reporting Corporatio n (202) 628-4888 5 1 requirements -- the age requirements are less than 19, and, 2 clearly, Savannah is still less than 19, so she was les s 3 than 19 in 2006 ; and who hasn't provided more than half of 4 her own support . Well, she is a kid . She, obviously , 5 hasn't provided more than half her own support . 6 So, as to Savannah and Mr . Congi, Sr ., she is a 7 qualifying child . 8 Now, as to Mr . Congi, Jr ., and his daughter, does 9 she bear a relationship to him? The answer is yes . 10 Daughters qualify just like granddaughters . 11 Did she meet the age requirements? Yes . 12 Did she meet the dependenie+fs requirements, mainly 13 that she provided no more than half of her own support ? 14 Clearly, the answers are the same for Mr . Congi, Sr ., and 15 Mr . Congi, Jr . 16 That leaves one question : Did Mr . Congi, Jr ., 17 share the same principal place of abode with Savannah, his 18 daughter, for more than one-half of the taxable year ? 19 That's the key question here . 20 Now, for three months of the year, Mr . Congi, Sr ., 21 has said in his petition that all three of them live d 22 together . So the question is whether there is that extra 23 three months or so . 24 We heard from Mr . Congi, Jr ., that he lived there 25 off and on throughout that year, and Mr . Congi, Sr ., said Heritage Reporting Corporatio n (202) 628-4888 6 1 that he used his mailing address, but he had also spent time 2 away, come back, go away, sowing his wild oats, so to speak . 3 So how do we classify somebody who is sowing wil d 4 oats? Now, the question was asked and answered in a Tax 5 Court opinion just last year called Roe v . Commissioner . 6 Rdb v . Commissioner , what the Tax Court had was a woman who 7 actually shot her brother-in-law and was arrested and sent 8 to jail . Now she was living in jail, and it was the State 9 of Oregon that was paying her bills . Nevertheless, we said , 10 she was also sharing the principal place of abode with her 11 children because she didn't want to be in jail, and sh e 12 didn't intend to be in jail, and she didn't have any othe r 13 place that she called home . 14 So our rule, as established in this case, R_ V . 15 Commissioner , 128 T .C . 13 at page 15, 6ax Court 42007), is 16 that "[a] taxpayer may still have the same principal place 17 of abode in spite of a temporary absence if it is reasonable 18 to assume that the taxpayer will return to the household , 19 and the taxpayer continues maintain the household during the 20 temporary absence . " 21 We also said that the key fact is, "Such a n 22 individual generally intends to return home ." This is like 23 soldiers who are serving in the military, people who ar e 24 temporarily absent due to business trips or because they are 25 in the hospital . They don't have another permanent place to Heritage Reporting Corporatio n (202) 628-4888 7 1 live so they continue to call home what they called home in 2 the first place . 3 That is what I find Mr . Congi, Jr ., to have been 4 doing in 2006 . He was flitting from place to place . So if 5 you added up the days, I would agree with Mr . Congi, Sr ., he 6 wouldn't have probably met the six-month rule . But he 7 didn't have another permanent place of abode to go to, and, 8 with his problems with the police, he was always coming back 9 to live with dad . That means that he, too, was sharing a 10 principal place of abode with his daughter, even though he 11 wasn't contributing to her support in any real and material 12 way . 13 Well, that means we have a tie . When you have two 14 people, both of whom can claim the same young child, there 15 is a tie breaker, and the tie breaker is in Section 152 of 16 the code as well, and that tie breaker is 152(c)(4), a 17 special rule relating to two or more claiming the same 18 qualifying child, and it states, in subpart (e), subpart 19 (1) : "Except as provided in subparagraph (b) --" that's 20 when two parents are claiming the same kid "-- if a n 21 individual may be, and is, claimed as qualifying child b y 22 two more taxpayers for a taxable year, such individual shall 23 be treated as the qualifying child of the taxpayer who is a 24 parent of the individual . " 25 So you both legitimately have claims for Savannah Heritage Reporting Corporatio n (202) 628-4888 8 1 as a qualiflkmiwAen child . In the Tax Code, despite the fact4l t~ 2 that Mr . Congi, Sr ., is clearly the more responsible adul t 3 in Savannah's life and clearly paid for almost all of he r 4 bills, the tax benefit goes to Mr . Congi, Jr ., and I have to 5 find for the Respondent . 6 The notice of deficiency for the tax year 2006 is 7 sustained . The case is over . Sorry about that, Mr . Congi , 8 Sr . 9 This concludes the court's oral findings of fac t 10 and opinion in this case . 11 (Whereupon, at 12 :20 p .m ., the bench opinion in 12 the above-entitled matter was concluded . ) 13 // 1 4 15 // 1 6 17 18 // 1 9 20 // 21 // 2 2 23 2 4 25 Heritage Reporting Corporation (202) 628-4888