TAX COURT OPINION

Case: Patricia Dumas
Docket Number: 22859-19
Judge: Urda
Opinion Type: bench
Filed: 01/25/2021
Pages: 8

United States Tax Court Washington, DC 20217 PATRICIA DUMAS, Petitioner v. Commissioner of Internal Revenue, Respondent ) ) ) ) ) ) ) ) ) ) ) Docket No. 22859-19. ORDER OF SERVICE OF TRANSCRIPT ORDERED that the Clerk of the Court shall transmit herewith to petitioner Pursuant to Rule 152(b) of the Tax Court Rules of Practice and Procedure, it is and to the Commissioner a copy of the pages of the transcript of the trial in this case before the undersigned judge at the Miami, Florida, remote session containing his oral findings of fact and opinion rendered at the trial session at which the case was heard. decision will be entered after the expiration of the 30-day period prescribed in Rule 231(a)(2)(B). In accordance with the oral findings of fact and opinion, an appropriate (Signed) Patrick J. Urda Judge Served 01/25/21 3 Bench Opinion by Judge Patrick J Urda October 23, 2020 Patricia Dumas v. Commissioner Docket No. 22859-19 THE COURT: The Court has decided to render oral Findings of Fact and Opinion in this case. This Bench Opinion is made pursuant to the authority granted by section 7459(b) of the Internal Revenue Code, and Rule 152 of the Tax Court Rules of Practice and Procedure. It shall not be relied upon as precedent in any other case. By notice of deficiency dated December 9, 2019, the Internal Revenue Service (IRS) determined a deficiency of $4,717 in petitioner Patricia Dumas' 2018 Federal income 1 2 3 4 5 6 7 8 9 10 11 12 13 14 tax. The primary question before us is whether Ms. Dumas' grandchild is a qualifying child for purposes of the earned income tax credit (EITC) and the additional child tax credit for her 2018 taxable year. Although we are very sympathetic to Ms. Dumas, we must resolve this question in respondent's favor. Trial of this case was conducted remotely via Zoomgov on October 19, 2020, at the Court's trial session in Miami, Florida. Joseph B. Schimmel entered a limited entry of appearance and represented Ms. Dumas, and 15 16 17 18 19 20 21 22 23 24 25 Kimberly A. Daigle represented the Commissioner.1 On the 4 evidence before us, we find the following facts: FINDINGS OF FACT A. Ms. Dumas' 2018 Tax Reporting In 2018 Ms. Dumas received wage income of $2,411 from Cornerstone Employer Solutions II, LLC, $5,413 from Management Registry, Inc., and $181 from PeopleReady Florida, Inc. She also operated a cleaning service business, earning $3,088. These amounts are not in 1 2 3 4 5 6 7 8 9 10 dispute. 11 Ms. Dumas' daughter and her daughter's children lived 12 13 14 with Ms. Dumas until sometime in 2018, at which point Ms. Dumas moved to a new residence. Ms. Dumas was solely responsible for the rent and living expenses at her new 15 home. 16 17 18 19 20 21 22 23 24 25 In the second half of 2018, Ms. Dumas' daughter gave birth to JCN. (The Court refers to minor children by only their initials. See Rule 27(a)(3).) Although she did not have legal custody of JCN, her grandson slept in her home "a lot of nights". When JCN resided with her, Ms. Dumas would drop him off at her daughter's home in the morning on her way to work and pick him up after work. On days that she did not have work, Ms. Dumas would also babysit 1 The Court extends its thanks to Mr. Schimmel for undertaking the representation of Ms. Dumas at the calendar call. JCN during the day. Expenses that Ms. Dumas incurred in 5 caring for JCN (e.g., milk) were not reimbursed by her daughter, and Ms. Dumas did not receive any assistance from the Government to help take care of JCN. Ms. Dumas timely filed a Federal income tax return for 2018, claiming single filing status and treating JCN as a qualifying child for purposes of calculating an EITC ($3,461) and an additional child tax credit ($1,256). These refundable tax credits reduced her tax to below zero, and as a result, she claimed a refund of $4,296. B. IRS Examination and Notice of Deficiency 1 2 3 4 5 6 7 8 9 10 11 12 The IRS selected Ms. Dumas' 2018 tax return for 13 14 15 16 17 18 19 20 21 examination and determined that she had failed to establish that she met all requirements of the law to be allowed a credit. The IRS accordingly disallowed her claimed EITC and the additional child tax credit and issued her a notice of deficiency. Ms. Dumas timely petitioned this Court for redetermination. At the time she filed her petition, Ms. Dumas resided in Florida. I. Burden of Proof OPINION 22 The Commissioner's determinations in a notice of 23 24 25 deficiency are generally presumed correct, and the taxpayer bears the burden of proving error in the determinations. See Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). The taxpayer bears the burden of 6 proving her entitlement to any deduction or credit claimed on her return. INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992); New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934). Ms. Dumas does not contend, and the evidence does not establish, that the burden of proof should shift to respondent under section 7491(a). Accordingly, she bears the burden of proof for the issue in dispute. 1 2 3 4 5 6 7 8 9 10 II. Analysis 11 Subject to various conditions and limitations, 12 13 14 15 16 17 18 19 20 21 22 23 24 25 section 32(a)(1) allows an eligible taxpayer an EITC against her individual income tax liability. The amount of the credit to which the taxpayer is entitled increases if she has a qualifying child. Sec. 32(b), (c)(3). For these purposes a qualifying child is defined in section 152(c). Sec. 32(c)(3)(A). A taxpayer also may claim a child tax credit for an individual who is (i) a qualifying child (again, as defined in section 152(c)) and (ii) has not attained age 17 during the taxable year, subject to certain limitations explained in section 24(b) and (h). Sec. 24(a), (c)(1). Under section 24(d) a portion of that credit--commonly referred to as the additional child tax credit -- is refundable. 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 Both of the credits at issue thus implicate section 7 152(c). Section 152(c)(1) provides that, in order to be a qualifying child, an individual must: (A) bear a specified relationship to the taxpayer; (B) have the same principal place of abode as the taxpayer for more than one-half of the taxable year; (C) satisfy certain age requirements; (D) have not provided more than one-half of his or her own support for the year; and, if married, (E) have not filed a joint return (other than only for a claim of refund) with his or her spouse. JCN satisfies the requirements of section 152(c)(1)(A) since he is the child of Ms. Dumas' daughter. See sec. 152(c)(2)(A). Based on our previous findings of fact, he also meets the age requirements of section 152(c)(1)(C) and did not provide over one-half of his own support as required by section 152(c)(1)(D). The joint return requirement under section 152(c)(1)(E) does not apply to him. JCN's status as a qualifying child thus turns on whether he had the same principal place of abode as Ms. Dumas for more than half of the time that he was alive in 2018 for purposes of section 152(c)(1)(B) (residency test).2 2 At trial respondent clarified that, because JCN was born during the second half of 2018, in order to meet the residency test, he must have resided with Ms. Dumas for more than half the tim be consistent with sec. 1.152- and the individual have the same principal place of abode for more than one-half of the portion of the taxable year during which the r, the residency test for a qualifying child is treated as met if the taxpayer On the record before us, we are unable to determine 8 the number of nights in 2018 that JCN stayed in Ms. Dumas' house. Ms. Dumas did not present any evidence beyond her own testimony, such as a calendar, an agreement with her daughter, an affidavit, or testimony from another witnesses (such as her daughter), regarding the number of nights JCN spent at her home in 2018. When asked by the Court how often JCN stayed with her, Ms. Dumas could not provide an estimated number of nights. Instead, she vaguely testified that: "So yes, I kept him. He did stay the night a lot of nights." When asked by the Court whether she had a certain agreement with her daughter with regard to caring for JCN, she answered that: "I would keep him. * * * But he has stayed the night." This vague and uncorroborated testimony is insufficient to support a finding that JCN satisfied the residency test. We are not required to, and we shall not, rely on her testimony in order to establish her respective position with respect to this issue. See Tokarski v. Commissioner, 87 T.C. 74, 77 (1986) (finding that the Court is not required to accept uncorroborated testimony as reliable and true). It is Ms. Dumas' burden to show that she is entitled to claim JCN as a qualifying child for purposes of claiming the EITC and the additional child tax credit. We 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 9 find that she has not met that burden. We thus hold that Ms. Dumas is not entitled to claim the credits. Because we sustain all of the IRS' adjustments in the notice of deficiency, we will enter decision in favor of respondent. This concludes the Court's oral Findings of Fact and Opinion in this case. (Whereupon, at 3:11 p.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