TAX COURT OPINION

Case: Jose David Moreno
Docket Number: 3899-15S
Judge: Carluzzo
Opinion Type: bench
Filed: 02/12/2016
Pages: 6

UNITED STATES TAX COURT WASHINGTON, DC 20217 PA JOSE DAVID MORENO, Petitioner(s), v. COMMISSIONER OF INTERNAL REVENUE, Respondent. ) ) ) ) ) Docket No. 3899-15S ) ) ) ) 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 Lewis R. Carluzzo at Los Angeles, California, containing his oral findings of fact and opinion rendered at the trial session at which the case was heard. In accordance with the oral findings of fact and opinion, decision will be entered under Rule 155. (Signed) Lewis R. Carluzzo Special Trial Judge Dated: Washington, D.C. February 12, 2016 SERVED Feb 16 2016 Capital Reporting Company 3 1 Bench Opinion by Special Trial Judge Lewis R. 2 Carluzzo 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 January 28, 2016 Jose David Moreno v. Commissioner Docket No. 3899-15S 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 (bench opinion). Section references made in this bench opinion are to the Internal Revenue Code of 1986, as amended, in effect for the relevant periods, and Rule references are to the Tax Court Rules of Practice and Procedure. This bench opinion is made pursuant to the authority granted by Section 7459(b) and Rule 152. This proceeding for the redetermination of a deficiency is a small tax case subject to the provisions of Section 7463 and Rules 170 through 175. Pursuant to Section 7463(b) the decision entered in this case shall not be treated as precedent for any other case. Jose David Moreno appeared on his own behalf. Christine A. Fukushima and Cassidy Collins appeared on behalf of R espondent. In a notice of deficiency dated November 24, 2014 866.488.DEPO twww.Capita1ReportingCompany.com Capital Reporting Company 4 1 2 3 4 5 6 7 (notice), Respondent determined a $4,240 deficiency in Petitioner's 2013 federal income tax. The issues for decision are whether petitioner: (1) is entitled to an earned income credit and (2) is entitled to a child tax credit. At the time the Petition was filed Petitioner lived in California. During the year in issue 8 petitioner lived in a house owned by his mother 9 along with other members of his extended family, 10 11 including, as relevant here, one of Petitioner's sisters, Delia. L. Hernandez. Ms. Hernandez is the 12 mother of A.R., a minor as of the year in issue, 13 14 15 16 17 18 19 who also lived in Petitioner's mother's house. The expenses of the house were split among its various occupants, and from time to time during the year in issue, Petitioner bought A.R. food or clothing or other necessities. Petitioner's 2013 timely filed federal income tax return (return) was prepared by a paid return 20. preparer. As relevant here, on that return 21 Petitioner: (1) claimed a dependency exemption 22 23 24 25 deduction for A.R.; (2) claimed an earned income credit computed as though A.R. was.Petitioner's qualifying child for purposes of that credit; and (3) claimed a child tax credit computed as though 866.488.DEPO twww.CapitalReportingCompany.com Capital Reporting Company 5 A.R. was Petitioner's qualifying child for that credit as well. The return shows Petitioner's adjusted gross income as $9, 598. Respondent's records show that Ms. Hernandez received wage, tips or other compensation totaling $12,313 during 2013, but that she did not file a federal income tax return for that year. In the notice, respondent disallowed: (1) the dependency exemption deduction claimed for A.R.; (2) the earned income credit claimed on the return; and (3) the child tax credit claimed on the return. We need not consider Petitioner's entitlement to the dependency exemption here in dispute because his entitlement to that deduction would have no tax consequences in the year before us. Nevertheless, the provisions of the Internal Revenue Code that determine his entitlement to that deduction will be addressed below to the extent relevant to his entitlement to the credits here in dispute. An appropriate place to start our discussion is with Respondent's concession, well supported by the evidence, that A.R. fit within the 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 definition of Petitioner' s qualifying child as 25 provided in section 152(a)(1), (c) during 2013. 866.488.DEPO twww.CapitalReportingCompany.com Capital Reporting Company 6 1 The evidence shows that A.R. also fit within the 2 definition of Ms. Hernandez's qualifying child 3 4 during that year. That being so, because the adjusted gross income of Ms. Hernandez exceeded 5 Petitioner's adjusted gross income during 2013, 6 Petitioner may not treat A.R. as his qualifying 7 8 child. See Section 152 (b) (4 ) (C) . At trial Petitioner suggested that his return 9 might not reflect all of the income he earned 10 11 12 13 14 15 16 17 18 during 2013. According to Petitioner, if all of his income were taken into account, his adjusted gross income would be higher than his sister's and he would be entitled to treat A.R. as his qualifying child. We think it would be inappropriate to allow Petitioner to distance himself from the accuracy of his return at such a late date in the process. Our findings are based upon the documentary evidence introduced at trial. 19 Petitioner's testimony on the point that suggests 20 21 22 23 24 otherwise is rejected. Because A.R. may not be treated as Petitioner's qualifying child, Petitioner is not entitled to the child tax credit or the earned income credit here in dispute. See Section 24 ( a) , (c) ; Section 32 (c) (3) (A) . 25 Respondent's disallowances of those credits as 866.488.DEPO twww.CapitalReportingCompany.com Capital Reporting Company 1 claimed on Petitioner's return is sustained. 2 Otherwise, it appears that Petitioner fits within the (cid:16)0423definition of an eligible individual provided in 7 Section 32(c)(1)(A)(ii). If the amount of his adjusted gross income allows for the credit, then the amount allowable can be taken into account in a Rule 155 computation. To reflect the foregoing, decision will be entered under Rule 155. (Whereupon, at 4:07 p.m., the above- entitled matter was concluded.) 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 twww.CapitalReportingCompany.com