TAX COURT OPINION

Case: Diane Jean Real
Docket Number: 215-10S
Judge: Carluzzo
Opinion Type: bench
Filed: 12/02/2011
Pages: 6

UNITED STATES TAX COURT 20217 Washington, D.C. DIANE JEAN REAL, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. ) ) ) ) ) ) ) ) ) Docket No. 215-10S O R D E R Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it is ORDERED that the Clerk of the Court shall transmit the transcript of herewith to petitioner and to respondent a copy of pages of Special Trial Judge'Lewis R. Carluzzo at Fresno, California, on November 16, 2011, containing his oral opinion rendered at the conclusion of trial. the trial of the above case before the findings of fact and In accordance with the oral findißgs of fact and opinion, decision will be entered under Rule 155'. (Signed) Lewis R. Carluzzo Special Trial Judge Dated: Washington, D.C. December 2, 2011 SERVED DEC - 72011 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 3 Bench Opinion by Special Trial Judge Lewis Carluzzo Diane Jean Real v. Commissioner Docket No. 215-10S November 16, 2011 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 which shall not be relied upon as precedent in any other case. This proceeding for the redetermination of a deficiency is a small tax case sub ect to the provisions of section 7463 of the Internal Revenue Code of 1986, as amended, and Rules 170 through 175 of the Tax Court Rules of Practice & Procedure. 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 & Procedure. S bsequent section references contained in this bench opinion are to sections of the Internal Revenue Code of 1986, as amended, in effect for the years in issue. Rule references are to the Tax Court Rules of Practice & Procedure. Minor children are identified in this bench opinion by initials. See Rule 27(a) (3). Diane Jean Real appeared pro se. Matthew A. Williams appeared on behalf of Heritage Reporting Corporation (202) 628-4888 4 Respondent. In a notice of deficiency dated October 1, 2009, Respondent determined deficiencies in, and imposed section 6662(a) penalties with respect to, Petitioner's 2005 and 2006 federal income taxes. After concessions, the issue for decision for each year is whether Petitioner is entitled to a child tax credit for M.J.M. Some of the facts have been stipulated and are so found. At the time the petition was filed, Petitioner resided in California. Petitioner is the mother of Matthew Real-Whipple (Mr. Real-Whipple). Mr. Real-Whipple and Michelle Lynn Spitler (Ms. Spitler) are the parents of F.L.R. Sometimes the obvious needs to be stated, ar.d so for the sake of clarity, given the dispute in thi case, we point out the obvious, that is, F.L.R. is Petit oner's grandchild. More precisely put, in the context of his case, F.L.R. is a descendant of Petitioner's child. Ms. Spitler is the mother of M.J.M. who was fathered by someone unrelated to Petitioner. For the sake of clarity I'll once again state ùhe obvious. M.J.M. is the half-sibling of Petitioner's grandchild, but M.J.M. is not otherwise related to Petitioner. As relevant here, on her federal income tax returns (including the amended returns) for the years in 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 Heritage Reporting Corporation (202) 628-4888 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 issue, Petitioner treated M.J.M. as a qualifying child for purposes of the child tax credit claimed on those returns. In the above-referenced notice of deficiency, Respondent disallowed that credit for each year. All other adjustments made in the notice of deficiency, including the imposition of the section 6662(a) penalties ave been resolved by the parties -and will not be further a dressed in this bench opinion. Respondent agrees that M.J.M. fits within the definition of a qualifying relative as that term is defined in section 152(d) and that Petitioner is entitled to a dependency exemption deduction for that child for each year in issue. See secs. 151(c) and 152(a) (2). We infer from that agreement and the allowance of that deduction for each of those ÿears that M.J.M. (1) had the same principal place of abode as Petitioner and was a member of Petitioner's household, and (2) Petitioner provided more than one half of M.J.M.'s support. Nevertheless, according to Respondent, because the relationship between M.J.M. and Pètitioner is not described in section 152(c) (2), M.J.M. does not fit within the definition of Petitioner's qualif ing child under section 152(c) and therefore Petitioner iÀ not entitled to a child tax credit for M.J.M. for either ear in issue. From the apparent living arrangements in place Heritage Reporting Corporation (202) 628-4888 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 during the years in issue, and from the apparent treatment of M.J.M. as a member not only of Petitioner's household, but of Petitioner's family as well, we can understand why M.J.M. was identified as Petitioner's grandchild on her federal income tax returns, and why she considers herself entitled to the child tax credits here in dispute. Emotional and financial considerations aside, however, for the following reasons, we agree with Respondent . In general, and subject o various conditions and limitations, a taxpayer is entitl d to a child tax credit (including an additional child ta credit) with respect to each qualifying child of the taxpayer. Sec. 24 (a). The term 'qualifying child' as used in section 24 means an individual who has not attained the age of 17 and who otherwise fits within the definition of a qualifying child as defined in section 152(c). Sec. 24 (c). Subject to special rules not relevant here, the term 'qualifying child' includes an individual who (1) is related to the taxpayer in a spec fied way, (2) has the same principal place of abode as the taxpayer for more than one half of the year, (3) meets certain age requirements, and (4) has not provided over one half of his or her own support for the taxable year. Sec. 152(c). These requirements can l(cid:0)540eloosely stated as the Heritage Reporting Corporation (202) 628-4888 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 7 relationship test, the residency test, the age test, and the support test . The requirements are in the conjunctive and all must be satisfied. Here it is clear that Petit1oner fails the relationship test. M.J.M. is not Petitioner's child or a descendant of one of Petitioner's children. See sec. 152 (c) (2) (A) . Furthermore, M.J.M. is not Petitioner's 'brother, sister, stepbrother, or stepsister' or 'a descendant of any such relative' . Sec . 152 (c) (2) (B) . It follows therefore, as pointed out by Respondent, that M.J.M. is not Petitioner's qualifying child for purposes of the child tax credits here in dispute, and Respondent's disallowances of thode credits are sustained. To reflect the foregoing, decision will be entered under Rule 155. This concludes the Court's oral findings of fact and opinion in this case. (Whereupon, at 9:28 a.m., the bench opinion in the above-entitled matter was concluded.) // // // // // // Heritage Reporting Corporation (202) 628-4888