TAX COURT OPINION

Case: Abdi F. Mohamed
Docket Number: 1990-06S
Judge: Colvin
Opinion Type: bench
Filed: 01/07/2009
Pages: 9

UNITED STATES TAXI COURT WASHINGTON , D .C . 2021 7 ABDI F . MOHAMED, Petitioner , v . Docket No . 1990-06 S 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 copyi,of the pages of the transcript of the trial of the above c~se before Judge Diane L . Kroupa at Seattle, Washington on Octob r 28, 2008, containing her oral findings of fact and opinion rendered at the conclusion of trial . In accordance with the oral findings of fact and opinion, a decision will be entered for respondent . (Signed ) Diane L. Kroupa Judg e Dated : Washington, D .C . January 7, 2009 SERVED JAN 0 8 2009 3 1 Bench Opinion by Judge Diane ., . Kroupa 2 Abdi F . Mohamed v . Commissioner 3 Docket No . 1990-06 S October 28, 2008 4 THE COURT : The Court has decided to rende r 5 oral findings of fact and opinion in this case and th e 6 following represents the Court's oral findings of fact 7 and opinion . These oral findings of fact and opinion 8 shall not be relied upon as precedent in any othe r 9 case . 1 0 11 This proceeding was'Iheard as a small tax case pursuant to the provisions of section 7463 of th e 12 Internal Revenue Code of 1986 as amended, and Rule s 13 170 through 175 of the Tax Court Rules of Practice and 14 Procedure . All section references are to the Interna l 15 Revenue Code for the year 2002, the year at issue, an d 16 all Rule references are to the Tax Court Rules o f 17 Practice and Procedure . 18 This bench opinion bs made pursuant to the 19 authority granted by section 1459(b) and Rule 152 . 20 Abdi F . Mohamed appeared pro se, and Lisa 21 Oshiro appeared on behalf of2espondent . Because of 22 Petitioner's difficulty speaking English, the Cour t 23 treated Petitioner's prepared statement as a Rule 24 50(c) statement rather than taking testimony . 25 // Heritage Reporting Corporation (202) 628-4888 4 1 2 FINDINGS OF FAC T Certain facts have been stipulated . Th e 3 stipulation of facts, with accompanying exhibits, are 4 incorporated by this reference . The facts are s o 5 found . 6 Petitioner resided .n Washington at the tim e 7 he filed the petition in thislcase . 8 Petitioner asserts n his Rule 50(c ) 9 statement that he sponsored h s brother, his sister- 10 in-law and their five childr e from Somalia an d 11 provided over half the support for two of hi s 12 brother's five children . Even though he provided ove r 13 half of their support, no chi d resided wit h 1 4 1 5 16 Petitioner . Instead the chi l siren lived with thei r parents throughout all of 200g . Petitioner filed a tax return for 2002 an d 17 claimed the two children as his dependents and claimed 18 the child tax credit for the two children as well . 19 Petitioner filed as head of household with the tw o 20 children as dependents, reported $ 12,518 of wages and- 21 claimed an earned income credit of $3,602 agai n 22 attributable to having a qualified child . 23 Respondent determined a deficiency of $4,77 5 24 in Petitioner's Federal income tax for 2002 in a 25 notice of deficiency dated October 11, 2005 ("th e Heritage Reporting Corporation (202) 628 -4888 5 1 deficiency notice") . Responde nt made the following 2 adjustments in the deficiency notice . First , 3 Respondent denied Petitioner's claimed dependenc y 4 exemptions for the two "foster' children . Second, 5 Respondent adjusted Petitioners filing status fro m 6 "Head of Household " to "Singh ." Third , Respondent 7 denied Petitioner ' s claimed child tax credit and 8 additional child tax credit . And fourth, Respondent 9 denied Petitioner's claimed e rued income credit . 10 Petitioner contests all adjus ments Responden t 11 determined in the deficiency otice . We address eac h 12 issue in turn . OPINION UP 13 We first address whc has the burden of 14 proof . Petitioner generally has the burden of proof . 15 See Rule 142(a) . Although section 7491 applies to 16 this case because it involves ',matters relating t o 17 2002, section 7491 does not shift the burden of proo f 18 to Respondent because Petitioner failed to introduce 19 any credible evidence under s ction 7491 . 20 Accordingly, the burden remains with Petitioner . 21 Next, we address the dependency exemptions . 22 A taxpayer is allowed an annual exemption deduction 23 for each "dependent" as defined in section 152 . Sec . 24 151(c) . Of particular relevance here, the ter m 25 "dependent" includes nieces and nephews . Sec . Heritage Reportin Corporation (202) 628 4888 6 1 152(d)(2)(E) . Specifically, ('dependent" includes a 2 son or a daughter of a brother of the taxpayer . Id . 3 Thus, Petitioner satisfies the relationship test for a 4 dependency exemption . 5 Section 152(a ) allows a taxpayer to treat a 6 niece or nephew as a dependent if the taxpaye r 7 provided during the taxable year more than half o f 8 each niece or nephew's support . See also sec . 151(a ) 9 and (c) . To satisfy the support test, the taxpaye r 10 must establish the total support cost expended o n 11 behalf of a claimed dependent from all sources for the 12 year and demonstrate that the taxpayer provided ove r 13 half of this amount . See Archer v . Commissioner , 73 14 T .C . 963, 967 (1980) ; sec . 1 .1152-1(a)(2)(I), Incom e 15 Tax Regs . Respondent does not dispute that Petitioner 16 provided over half of the support for the niece o r 17 nephew . 18 Respondent does dispute, however, tha t 19 Petitioner does not satisfy the requirement that the 20 qualifying child must have the same principal place of 21 abode as the taxpayer for more than one-half of such 22 taxable year . Sec . 152(c)(1)II(B) . We agree wit h 23 Respondent . Petitioner failed to provide any evidence 24 that the niece and nephew lived at the same principa l 25 place of abode as Petitioner .' We therefore conclude Heritage Reporting Corporatio n (202) 628-4888 7 1 that Petitioner is not entitled to treat either of the 2 children as a dependent for 2C02, and we sustai n 3 Respondent's determination disallowing Petitioner a 4 dependency exemption for the 4hildren . 5 We also conclude th .t Petitioner may not 6 file as head of household for 2002 . An individual 7 will qualify for head of hous hold status if th e 8 taxpayer maintains as his or her home, a household 9 that is the principal place o abode of a dependent 10 for more than one-half of the taxable year . Sec . 11 2(b)(1)(A)('i) . Here, Petitioner has failed to prove 12 that the children lived with him in 2002 . In fact , 13 the record reflects that the hildren did not liv e 14 with him at any time during 2902 . They lived with 15 their parents . 16 In addition, an individual maintains a 17 household only if he or she furnishes over half the 18 costs of maintaining the household during the taxable 19 year . Sec . 2(b)(1) ; sec . 1 .2-2(b)(1), Income Tax 20 Regs . The costs of maintaining the household include 21 property taxes, mortgage interest, utility charges, 22 upkeep and repairs, property insurance, and foo d 23 consumed on the premises . Sec . 1 .2-2( d), Income Tax 24 Regs . Here , Petitioner has failed to show the costs 25 of maintaining any household let alone the household Heritage Reporting Corporatio n (202) 628-4888 8 1 in which the children lived . 2 Accordingly, Petitioner is not entitled t o 3 claim head of household status for 2002 . We therefore 4 sustain Respondent's adjustme t in the deficienc y 5 notice changing Petitioner's filing status from "Head 6 of Household" to "Single . " 7 Next, we address the earned income credit 8 Petitioner claimed on his ret rn for 2002 . Eligible 9 individuals may claim an earn d income credit on their 10 Federal tax return . Sec . 32(4) . An individual i s 11 eligible if they have a qualifying child for the I 12 taxable year . Sec . 32(c) (1) (A) (~) . A qualifying 13 child is one who satisfies three requirements set 14 forth in section 32(c)(3) relating to the age , 15 principal place of abode, andjrelationship to the 16 taxpayer claiming the credit . l 17 Here, Petitioner ha~ not substantiated that 18 he maintained as his home a h usehold that constituted 19 the principal place of abode for the children during 20 2002 . Accordingly, Petitioner has no qualifyin g 21 children for 2002 . 22 Even though we find Petitioner did not have 23 any qualifying children, Petitioner could also be an 24 eligible individual . See sec . 32(c)(1)(A)(ii) . In 25 this case, however, Petitioner is still not entitled Heritage Reporting corporatio n (202) 628-4888 9 1 to the earned income credit f r 2002 because his total 2 income of $12,518 exceeded th completed phase ou t 3 amount of $11,060 . See Rev . Rroc . 2001-1 C .B . 337, 4 339 and Rev . Proc . 2001-59, 21101-2 C .B . 623 . 5 Therefore, we sustain Respond nt's determination that 6 Petitioner is not entitled to'lan earned income credi t 7 for 2002 . 8 We next address the child tax credit and 9 additional child tax credit . Section 24(a) authorize s 10 a child tax credit with respet to each "qualifying 11 child" of the taxpayer . Section 24(d) authorizes an 12 additional child tax credit for families with three or 13 more "qualifying" children . The term "qualifyin g 14 child" is defined in section ~4(c) . As relevant here, 15 a "qualifying child" means anlliindividual with respec t 16 to whom the taxpayer is allowfd to claim as a 17 dependent under section 152 . !Sec . 24(c)(1)(A) . 18 We have already held that Petitioner is not 19 entitled to claim a dependency exemption for either of 20 the children . Accordingly, neither child is a 21 "qualifying child" within the meaning of sectio n 22 24(c) . It follows, therefore, that Petitioner is not 23 entitled to a child tax credi under section 24(a) or 24 an additional child tax credit under section 24(d ) 25 regarding the children . Heritage Reportin Corporation (202) 628 1 4888 10 1 We note in closing that Petitioner claime d 2 on his return for 2002 that the children were foste r 3 children . An eligible foster child is defined as an 4 individual who the taxpayer caires for as the 5 taxpayer ' s own child , and ha s the same principal place 6 of abode as the taxpayer for ~ he taxpayer's entire 7 taxable year . Sec . 32 (c)(3)($)(iii) . Becaus e 8 Petitioner admitted that the c hildren never lived with 9 him for any part of the year , the children do no t 10 qualify as eligible foster ch ldren . 11 The Court therefore j sustains all o f 12 Respondent' s adjustments in the deficiency notice . 13 To reflect the foregoing, a decision will b e 14 entered for Respondent . 15 This concludes the court's oral findings of 16 fact and opinion in this case, . 17 (Whereupon, at 1 :11hp .m ., the bench opinion 18 in the above-entitled matter was concluded . ) Heritage Reporting Corporation (202) 628-4888