TAX COURT OPINION

Case: Jason Newman
Docket Number: 20216-07S
Judge: Colvin
Opinion Type: bench
Filed: 04/13/2009
Pages: 7

UNITED STATES TAX COURT WASHINGTON, DC 2021 7 JASON NEWMAN, Petitione r V . Docket No . 20216-07S . 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 Jason Newman and to respondent a copy of the pages of the transcript of the trial in the above case before Judge Michael B . Thornton at Little Rock, Arkansas, on March 23, 2009, containing the Court's 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 under Rule 155 . (Signed) Michael B. Thornton Judg e Dated : Washington, D .C . April 13, 2009 SERVED Apr 14 2009 1 P R O C E E D I N G S 2 Bench Opinion by Judge Michael B . Thornton 3 Jason Newman Docket No . 20216-07 S 4 THE CLERK : Docket Number 20216-07S, Jason 2 6 7 Newman . morning . THE COURT : . Mr . Newman is not here, is he ? MR . WILSON : I haven't seen him since thi s 9 THE COURT : Right . Earlier this morning he 10 had asked when I might render an opinion, and I told 11 him I might be able to do a bench opinion but I would 12 have to take care of some other matters to see what my 13 schedule was . When I was in a position to announce a 14 time, I noticed he was not in the courtroom, so I was 15 unable to advise him of this time of giving a benc h 16 opinion . 17 The Court has decided to render ora l 18 findings of fact and opinion in this case, and th e 19 following represents the Court's oral findings of fact 20 and opinion . 21 Except as otherwise provided by Rule 152(c) 22 of the Tax Court Rules of Practice and Procedure, the 23 oral findings of fact and opinion shall not be relied 24 upon as precedent . 25 . This bench opinion is made pursuant to the Heritage Reporting Corporatio n (202) 628-4888 3 1 authority granted by Section 7459(b) and Rule 152 . 2 Section references are to the Internal Revenue Code in 3 effect for the taxable years at issue . All rul e 4 references are to the Tax Court Rules of Practice and 5 Procedure . 6 This case was heard pursuant to th e 7 provisions of Section 7463 ; pursuant to Sectio n 7463(b), decision to be entered is not reviewable by any other court and this opinion shall not be treate d 10 as precedent for any other case . 11 This case was tried on March 23, 2009, i n 12 Little Rock, Arkansas . Petitioner tried his case pro 13 se . Britt Wilson represented Respondent . 14 Respondent determined a $2,414 deficiency in 15 Petitioner's 2005 Federal Income Tax, and an addition 16 to tax under Section 6651(a)(1) of $225 .30 . The issue 17 for decision is whether Petitioner is entitled t o 18 claim an earned income credit for taxable year 2005 . 19 Respondent has conceded the issue of whether 20 Petitioner is liable for an addition to tax unde r 21 Section .6651(a)(1) . 22 Findings of Fact . Petitioner resided i n 23 Arkansas when his petition was filed . For the taxable 24 year 2005, Petitioner filed a Form 1040 claiming a n 25 earned income credit of $825 . On his return, Heritage Reporting Corporation (202) 628-4888 4 1 Petitioner claimed his great-aunt, who was 73 years ' 2 old and disabled, and for whom Petitioner is the legal 3 guardian, as a dependent . Petitioner also claimed his 4 great-aunt as a qualifying child for purposes of th e 5 earned income credit . 6 Petitioner filed as head of household and 7 had an adjusted gross income of $15,906 . On June 26, 8 2006, Respondent issued Petitioner a Notice CP-1 2 9 advising Petitioner of a mathematical error i n 10 calculating the earned income credit, and computed a 1i 11 refund of tax of $2,9±5, comprising $2,414 in earne d 2,51 5 12 income credit and $161 return of over-withholding . 13 Respondent refunded the to Petitioner . ta,51S 14 In the notice of deficiency, Responden t 15 disallowed the earned income credit, thus resulting i n 16, a $2,414 deficiency . Respondent also determined a 17 $225 .30 addition to tax under Section 6651 O ) CI ) -) . 18 Petitioner timely filed a petition with the Tax Court 19 seeking a redetermination of his deficiency . 20 Opinion . Section 32(a) provides for an 21 earned income credit in the case of an eligibl e 22 individual . Section 32(b) provides amounts of earned 23 income credits, depending on whether taxpayers have 24 zero, one, or two or more qualifying children for the 25 tax year . A qualifying child is a child of th e Heritage Reporting Corporation (202) 628-4888 Cc) 3~ 1 taxpayer as defined in Section 152(c ) . Section 32'(3) . 2 Section 32, therefore, does not include relatives 3 other than a qualifying child, even though suc h 4 persons may be considered qualifying relatives or 5 dependents for other provisions of the ode . 6 For taxpayers who are not married and have 7 no qualifying children, the earned income credit is 8 entirely phased out when there is adjusted gros s 9 income in excess of $11,750 . Section 152(c)(1 ) 10 defines a qualifying child as an individual (A), who 11 bears a relationship to the taxpayer as described in 12 Section 152(c)(2) ; (B), who has the same principl e 13 place of abode as the taxpayer for at least half of 14 the taxable year ; (C), who meets the age requirements 15 of Section 152(c)(3) ; and (D), who has not provided 16 more than one-half of his or her own support for the 17 taxable year in which he or she is being claimed as a 18 qualifying child . 19 Under Section 152(c)(1)(A), a qualifying 20 child/taxpayer relationship exists if the claimed 21 dependent is a child of the taxpayer ; a brother , 22 sister, step-brother, or step-sister of the taxpayer ; 23 or a descendent of any such relative . Section 24 152(f)(1) expands the definition of child to include 25 an individual who was legally adopted by or is an Heritage Reporting Corporatio n (202) 628-4888 6 1 eligible foster child of the t axpayer . Section (A r d am CEO= ~, > r Here, insofar as th e 2 152(f)(1)( A 3 record shows , Petitioner has not adopted his great- 4 aunt, nor is his great-aunt his child, brother , 5 sister, step-brother, or step-sister, or a descendent 6 of .any such person . . Thus Petitioner has failed t o 7 establish that his great-aunt is a qualifying child . 8 Furthermore, Section 152(c)(3) requires that a-- 9 qualifying child be younger than 19 years old at the 10 close of the tax year prior to the year when he or she 11 will be claimed as a dependent, or if the qualifying 12 child is a student, younger than 24 years old at the 13 close of the tax year prior to the year in which he or 14 she will be claimed as a dependent . 15 Here Petitioner's great-aunt does not meet 16 the requirements of Sub-section (c)(3) because she was 17 older than age 19 or 24 years old in 2004, and 2004 is 18 the year prior to the year which she was claimed as a 19 dependent . 20 Petitioner's argument might be construed to 21 suggest that he does not have to repay the earne d 22 income credit because it was refunded to him in error . 23 The Code provides, however, that the refunded amount , 24 despite not being claimed by Petitioner on his original 25 return, is properly included in the deficiency . Heritage Reporting Corporation (202) 628-4888 1 Section S 1 (b) (2) . Furthermore, iri'asvmuch as the lv\f) I- 2 Notice CP-12 might be viewed as estopping Responden t 3 from asserting that the earned income credit was not 4 properly claimed) ,The general proposition has been 5 that the estoppel doctrine is inapplicable to preven t 7 6 the Commissioner from correcting a mistake of law . ' 7 Schuster v . Commissioner 312 311, 317 (9th nor, V~ d . &it 4at_ I pl'l 8 Circuits 1961, fM. 10 ' 32' T .C ., (1959) . We, /r\ / 9 ,therefore , find this argument unpersuasive . 10 To reflect the foregoing P concession ,,~ Syr 11 of Respondent , a decision will be entered under Rul e 12 155 . 13 This concludes the Court ' s findings of fact 14 and opinion in this case . 15 (Whereupon , at 5 :30 p .m ., the bench opinion 16 in the above-entitled matter was concluded . ) 17 // 1 8 19 20 21 22 23 / / 2 4 25 Heritage Reporting Corporation (202) 628-4888