TAX COURT OPINION

Case: Keith Andrew Stevens
Docket Number: 13366-15S
Judge: Leyden
Opinion Type: bench
Filed: 01/05/2017
Pages: 12

SEC UNITED STATES TAX COURT WASHINGTON, DC 20217 KEITH ANDREW STEVENS, Petitioner, v. ) ) ) ) Docket No. 13366-15S. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ORDER 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 Petitioner and to respondent a copy of the pages of the transcript of the trial in the above case before Special Trial Judge Diana L. Leyden at San Diego, California, on November 17, 2016, containing her oral fimdings 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 for respondent. (Signed) Diana L. Leyden Special Trial Judge Dated: Washington, D.C. January 5, 2017 SERVED Jan 05 2017 Capital Reporting Company 3 1 2 Bench Opinion by Special Trial Judge Diana L. Leyden November 17, 2016 3 Keith Andrew Stevens v. Commissioner 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Docket No. 13366-15S I. 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. SEE RULE 152(c), TAX COURT RULES OF PRACTICE AND PROCEDURE. II. This proceeding was heard as a Small Tax Case 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. III. 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, and unless otherwise indicated, all section numbers refer 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 4 1 2 3 4 5 6 7 8 to the Internal Revenue Code, as amended and in effect for the taxable year in issue, and all Rule numbers refer to the Tax Court Rules of Practice and Procedure. The minor child is identified in this bench opinion by initials. See Rule 27(a)(3). IV. The trial of this case was conducted on November , 2016, in San Diego, California. 9 Petitioner appeared on his own behalf. Clint T. Hale 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 appeared on behalf of respondent. V. For the taxable year 2012, respondent determined a deficiency of $3,315 with respect to petitioner's 2012 federal income tax. VI. The issues for decision before the Court are (1) whether petitioner is entitled to a dependency exemption deduction for his child, identified here by initials, P.S.; (2) whether petitioner is entitled to claim the filing status of head of hoùsehold; (3) whether petitioner is entitled to claim the earned income credit; and (4) whether petitioner is entitled to claim the child tax credit. VII. Some of the facts have been stipulated. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 5 1 2 3 4 5 6 7 8 The parties' stipulation of facts was admitted in evidence along with the attached exhibits. The stipulation of facts, with attached exhibits, is incorporated herein by this reference. At trial an additional exhibit prepared by the mother of P.S. was also admitted into evidence. That exhibit tracked the days that P.S. was with his mother or with petitioner, his father. The protocol used by P.S.'s 9 mother was to record the parent with whom P.S. stayed 10 11 12 13 14 15 16 17 18 overnight as the primary care giver for that day. We find the following facts. Petitioner resided in California at the time the petition was filed with the Court. The taxable year at issue in this case is the calendar year 2012. In a Written Stipulation for Judgment (Paternity) dated July 11, 2011, and signed by a judge of the Superior Court of the State of 19 California, petitioner and the mother of P.S. agreed 20 21 22 to joint custody for legal purposes and joint physical custody of P.S. Petitioner and the mother of the child agreed that they would alternate weeks 23 with some modifications for special days such as 24 25 holidays and birthdays. The week was to begin on Sunday and end on Saturday. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 6 1 2 The mother of P.S. testified at trial that she was meticulous at keeping track of when P.S. was 3 with her or petitioner because she was aware that for 4 5 6 7 8 tax purposes she would need to prove that she had custody of P.S. more time than petitioner. She testified that joint custody would presume that it was equal and she would have to prove that she had custody of P.S. for more days than petitioner. The 9 mother of the child testified that she kept track of 10 11 12 13 14 the days in a word processing program on her computer. We find the mother's testimony credible. According to the document, P.S. stayed overnight with petitioner for 180 days and stayed overnight with his mother 186 days in 2012. P.S.'s 15 mother testified that she made two mistakes -- one 16 17 18 19 20 21 22 23 24 25 day she listed the primary care giver as mom and it should have been dad and another day she listed the primary care giver as dad when it should have been mom. After these corrections, the number of days P.S. stayed with his mother during 2012 remained the same -- 186 days. Petitioner's argument at trial was that he was supposed to have equal amount of time with P.S. according to the custody agreement, but due to circumstances the mother had P.S. stay with her 866.488.DEPO www.Capita1ReportingCompany.com Capital Reporting Company 7 1 2 3 4 5 6 7 8 during days when petitioner was supposed to have P.S. stay with him. Petitioner did not dispute the accuracy of the document produced by P.S.'s mother nor did he dispute that P.S. actually stayed with the parent noted in the document as corrected by the testimony of P.S.'s mother. Petitioner did not provide any evidence to dispute the recordation of the visits of P.S. that was prepared by P.S.'s 9 mother. 10 11 12 13 14 15 16 17 18 19 20 21 22 Petitioner timely filed his 2012 tax return. On his tax return petitioner claimed the filing status of head of household, a dependency exemption deduction for P.S., the earned income credit computed by treating P.S. as a qualifying child, and the child tax credit computed by treating P.S. as a qualifying child. On March 27, 2015, respondent sent petitioner a notice of deficiency disallowing the filing status of head of household and changing the filing status to single, disallowing a dependency exemption deduction for P.S., disallowing the earned income credit, and disallowing the child tax credit. 23 Petitioner timely petitioned this Court for a 24 25 redetermination of the deficiency. · VIII. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 8 1 We now turn to the substantive law. 2 Generally, determinations made in a notice of 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 deficiency are presumed correct, and the taxpayer bears the burden of proving the Commissioner's determinations are erroneous. Rule 142(a)(1); Welch v. Helvering, 290 U.S. 111, 115 (1933). Under certain circumstances the burden of proof with respect to factual issues may shift to the Commissioner under Section 7491(a). Petitioner does not contend, and the evidence does not establish, that the burden of proof shifts to respondent under Section 7491(a) as to any issue of fact. Petitioner bears the burden of proof. A. Dependency Exemption Deduction Because of its impact on the other three issues, we begin our discussion with petitioner's entitlement to the dependency exemption deduction claimed for his son. In general a taxpayer is entitled to an exemption deduction for each individual who is a dependent of the taxpayer for the taxable year. Sec. 151(a), (c). A dependent as used in Section 151 means the taxpayer's qualifying child or qualifying relative. Sec. 152(a). Subject to the special rules not relevant here, the term "qualifying child" includes, among 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 9 1 2 other relationships, a child of the taxpayer (1) has the same principal place of abode as the taxpayer for 3 more than one half of the year, (2) meets certain age 4 5 6 7 8 9 10 11 12 13 requirements, and (3) has not provided over one-half of his or her own support for the taxable year. Sec. 152(c)(1). These requirements can be loosely stated as the relationship test, the residency test, the age test, and the support test. The requirements are in the conjunctive and all must be satisfied. Respondent does not dispute that as to P.S. petitioner meets the relationship and age tests. Instead, respondent contends that P.S.'s principal place of abode for more than one-half of the year was 14 with P.S.'s mother, not petitioner. The Court agrees 15 with respondent. 16 Petitioner concedes that the recordation by 17 P.S.'s mother as to the days when P.S. was with her 18 19 20 21 22 versus with petition is accurate. The recordation establishes that P.S. stayed with P.S.'s mother for 186 days, which is more than one half of the year in 2012. The recordation also established that P.S. stayed with petitioner for 180 days during 2012, 23 which is less than one half of the year. The 24 25 petitioner therefore fails to establish the requirements under the residency test to claim P.S. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 10 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 as a qualifying child. If a child is not a qualifying child, then a taxpayer claiming a dependency exemption deduction on the basis that the child is a qualifying relative generally, among other requirements, must show that the child is not the qualifying child of another taxpayer. Sec. 152(d)(1)(D). As previously discussed, P.S. resided with P.S.'s mother for more than one half of the year in 2012. Because P.S. is the qualifying child of P.S.'s mother, petitioner does not meet the requirements to claim P.S. as a qualifying relative. Accordingly, the Court concludes that petitioner is not entitled to a dependency exemption deduction for P.S. for 2012. Respondent's disallowance of that dependency exemption deduction is sustained. B. Head of Household Filing Status Section 2(b)(1) defines head of household. To qualify, and as relevant in this case, the taxpayer must maintain as his home a household that constitutes for more than one-half of the year the principal place of abode of either (1) a qualifying child as defined in Section 152(c) or (2) any other person who is a dependent of the taxpayer for 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 11 purposes of Section 151. As discussed above, P.S. is not the qualifying child of petitioner under Section 152(c) nor a qualifying relative of petitioner under Section 152(d). P.S. was therefore not a dependent of petitioner within the meaning of Section 151. The Court concludes that petitioner is not entitled to claim the filing status of head of household for 2012. Respondent's disallowance of the filing status of head of household is sustained. C. Earned Income Credit Section 32 allows an earned income credit for an eligible individual. 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 one-half of the taxable year and who was not a dependent on another taxpayer's tax return. 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 discussed above, petitioner has not proven that P.S. was his qualifying child for 2012. Consequently, the Court sustains respondent's determination disallowing the earned income credit 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 12 1 with respect to P.S. for 2012. 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 D. Child Tax Credit In general and subject to various conditions and limitations, a taxpayer is entitled to a child tax credit with respect to each qualifying child of the taxpayer. Sec. 24(a). The term "qualifying child" as used in Section 24 means an individual who has not attained the age of 17, and who otherwise fits the definition of a qualifying child as defined in Section 152(c). Sec. 24(c). As discussed above, P.S. is not petitioner's qualifying child under Section 152(c) for 2012. Therefore, P.S. is not a qualifying child for purposes of the child tax credit. The Court concludes that petitioner is not entitled to the child tax credit with respect to P.S. for 2012. Respondent's disallowance of that credit is sustained. IX. To give effect to our disposition of the disputed issues, decision will be entered for respondent. X. THIS CONCLUDES THE COURT'S ORAL FINDINGS OF FACT AND OPINION IN THIS CASE. 866.488.DEPO www.CapitalReportingCompany.com 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 Capital Reporting Company (Whereupon, at 10:40 a.m., the above- entitled matter was concluded.) 13 866.488.DEPO www.CapitalReportingCompany.com