TAX COURT OPINION

Case: William H. Jones, Jr.
Docket Number: 19407-15
Judge: Pugh
Opinion Type: bench
Filed: 02/13/2017
Pages: 9

CZ UNITED STATES TAX COURT WASHINGTON, DC 20217 WILLIAM H. JONES, JR., Petitioner(s), v. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ) ) Docket No. 19407-15. ) ) ) ) ) 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 Judge Cary Douglas Pugh at Miami, Florida on December 16, 2016, containing her oral findings of fact and opinion rendered after the conclusion of the trial. In accordance with the oral findings of fact and opinion, decision will be entered for respondent. (Signed) Cary Douglas Pugh Judge Dated: Washington, D.C. February 13, 2017 SERVED Feb 14 2017 Capital Reporting Company 3 1 2 Bench Opinion by Judge Cary Douglas Pugh December 16, 20126 3 William H. Jones, Jr. v. Commissioner 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Docket No. 19407-15 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. . 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. Unless otherwise indicated, subsequent section references made in this bench opinion are to the Internal Revenue Code of 1986 as amended and in effect for the years at issue and Rule references are to the Tax 19 Court Rules of Practice and Procedure. All monetary 20 21 22 23 24 25 amounts have been rounded to the nearest dollar. Petitioner William H. Jones, Jr. appeared pro se. Anthony R. Adane appeared on behalf of Respondent. When Petitioner timely filed his petition, he resided in Hallandale, Florida. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 4 1 Respondent issued to Petitioner a Notice of 2 Deficiency dated July 27, 2015, in which he 3 4 5 6 7 8 9 10 11 12 13 determined a deficiency of $3,888 in Petitioner's Federal income tax for 2013. The issues before us are whether Petitioner was entitled to claim a dependency exemption, head of household filing status, and earned income credit, claiming Monet Brown, his step-daughter, as a qualifying child. FINDINGS OF FACT Some of the facts have been stipulated and we incorporate those facts into our opinion by this reference. Petitioner and Maxine Brown were married in Broward County, Florida, on November 6, 2002. 14 Maxine Brown had one biological daughter, Monet 15 16 17 18 19 20 Brown; Petitioner is not her biological father but rather is her step-father. All three lived at a house owned by Maxine Brown, located in Miramar, Florida, from 2002 until Maxine Brown's death on September 28, 2011. Petitioner, as surviving spouse, elected to take a one-half interest in the home, on 21 March 20, 2012. 22 After Maxine Brown's death, her sister, 23 Marcia Brown arrived in the area and moved into the 24 25 home. Marcia Brown was appointed Monet Brown's guardian on April 3, 2012. During 2013, Monet Brown 866.488.DEPO www.Capita1ReportingCompany.com Capital Reporting Company 5 1 2 3 4 5 6 7 8 9 10 11 12 13 had not yet attained the age of 19. She lived in the home with Marcia Brown in 2013 until she went to summer school and then college. In 2013, the Petitioner worked shifts and was away from the home for part of each week and for holidays due to work. When he was not working shifts he did visit the home to shower, to do laundry, and occasionally to sleep. His testimony was vague, however, as to how much time he spent in the home when he was not working. When Maxine Brown died, she left a bank account that was used to pay for major home expenses, such as mortgage and insurance.. During 2013, 14 Petitioner only paid for water and wastewater 15 16 17 18 19 20 21 22 23 24 25 treatment for the home and for some groceries. He did not pay for electricity after a dispute over the size of the electricity bill. On his 2013 income tax return, Petitioner claimed head of household filing status, a dependency exemption for Monet Brown, and an earned income credit of $3,250, listing Monet Brown as a qualifying child. Marcia Brown also claimed an earned income credit listing Monet Brown as a qualifying child. For 2013, Petitioner had adjusted gross income of $16,377 and Marcia Brown had adjusted gross income of 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 6 1 2 3 $7,600. Prior to and during the year at issue, 2013, there was significant friction between 4 Petitioner and Marcia Brown and Petitioner was not 5 6 7 8 welcome in the home although he did have access to the home for all of 2013, and did visit the home, as we found above. We found Petitioner to be a credible 9 witness. We found Marcia Brown to be less credible 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 and we therefore have discounted her testimony in our findings above. I. Burden of Proof OPINION Generally the taxpayer bears the burden to prove his entitlement to the exemptions and credits he claimed. Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). Petitioner does not contend that the burden of proof should be shifted to Respondent under section 7491(a), and the record does not suggest any basis for a shift. II. Dependency Exemption Section 151(c) allows a taxpayer an additional exemption deduction for a dependent if the individual qualified as a dependent under section 152. Section 152(a) provides that a dependent is 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 7 either a qualifying child or a qualifying relative. Section 152-(c)(1) provides that five requirements must be met for an individual to be a qualifying child of the taxpayer. One requirement is that the child live with the taxpayer for more than one-half of the taxable year (known as the residency requirement). Section 152(C)(1)(B). Temporary absences anstdue to special circumstances, including for business, are not treated as absences for purposes of determining whether this residency requirement is met. Section 1.152-1(b), Income Tax Regs.; see also Rowe v. Commissioner, 128 T.C. 13, 2007 WL 5498500 (2007). We hold that Petitioner has not established that Monet Brown lived with him for more than one- half of 2013. While Petitioner did visit, his vague testimony as to how often he was in the home when he was not at work p insufficient for us to conclude ) that he satisfies the residency requirement. We 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 therefore conclude that Monet Brown is not 21 Petitioner's qualifying child and therefore must 22 23 24 25 consider whether she is a qualifying relative under section 152(d). Section 152(d)(1) provides that four requirements must be met for an individual to be a 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 8 1 2 3 4 5 6 7 qualifying relative of the taxpayer. One requirement is that the taxpayer provide more than one-half of the individual's support for the taxable year. Section 152(d)(1)(C). Petitioner candidly testified that he did not pay for the major household expenses although he did pay for water and groceries. Therefore, we hold that Petitioner did not provide 8 more than one-half of Monet Brown's support for 2013. 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Because Monet Brown is not Petitioner's qualifying child or qualifying relative, Petitioner is not entitled to a dependency exemption for Monet Brown. III. Head of Household Status Section 1 provides varying tax rates for taxpayers, including a rate for taxpayers claiming head of household filing status. Section 1(b). Section 2(b) provides that to qualify for head of household filing status, the taxpayer must, among other requirements, maintain as his home a household that is the principal place of abode of a qualifying child for more than one-half of the taxable year. Section 2(b)(1)(A). Qualifying child for purposes of these sections is defined under 152(c). Section 2(b) (1) (A) (i). A taxpayer is considered to maintain a household only if the taxpayer provides over half 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 9 1 2 3 of the cost of maintaining the household during the year. Section 2(b) (1). Because we held above that Monet Brown was 4. .not Petitioner's qualifying child and he did not 5 6 7 8 9 10 11 provide more than one-half of the cost of maintaining the household, we hold that he is not entitled to claim head of household filing status. IV. Earned Income Credit Eligible individuals are entitled to an earned income credit against their income tax liability within certain limits. Section 32(a). 12 Generally, eligible individuals are defined as 13 14 15 16 17 18 individuals -who have a qualifying child, as defined in section 152(c) (with certain modifications not relevant here), or, alternatively, have adjusted gross income below a certain amount and meet other requirements, not disputed here. Section 32(c). For 2013, eligible individuals without a qualifying child 19 must have adjusted gross income below $14,340. 20 21 22 23 24 25 Sections 32(b) and 32(c). We hold that Petitioner is not entitled to an earned income credit because he does not have a qualifying child and his adjusted gross income in 2013 exceeded the threshold set forth under the statute for that year. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 10 We have considered the remaining arguments made by the parties, and to the extent not discussed above, we conclude that those arguments are irrelevant, moor or without merit. To reflect the foregoing, the Court will enter an appropriate decision. THIS CONCLUDES THE COURT'S ORAL FINDINGS OF FACT AND OPINION IN THIS CASE. (Whereupon, at 9:01 a.m., the above- entitled matter was concluded.) 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