TAX COURT OPINION

Case: Jorge Luis Cardenas
Docket Number: 21970-10S
Judge: Kroupa
Opinion Type: bench
Filed: 11/02/2011
Pages: 9

_Beg o p- FMvp/4 CLC UNITED STATES TAX COURT WASHINGTON, DC 20217 JORGE LUIS CARDENAS, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. ) ) ) ) ) ) ) ) O R D E R Docket No. 21970-10S Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it is ORDERED that the Clerk of the Court shall transmit to petitioner and to respondent a copy of transcript of Diane L. Kroupa at Phoenix, Arizona, on October 19, 2011, containing her oral the proceedings of fact and opinion. findings of the pages of the the above case before Judge In accordance with the oral findings of fact and opinion, decision will be entered undergRule 155,. (Signed) Diane L. Kroupa Judge Dated: Washington, D.C. November 2, 2011 SERVED Nov 09 2011 3 1 2 3 4 5 6 7 8 9 10 11 12 Bench Opinion by Judge Diane L. Kroupa October 19, 2011 Cardenas v. Commissioner Docket No. 21970-10S 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. These oral findings of fact and opinion shall not be relied upon as precedent in any other case. . This proceeding was conducted as a small tax case under section 7463 and Rules 170 through 175. This bench opinion is made pursuant to the authority granted by section 7459(b) of the Internal Revenue Code as amended and in effect for the year 2009 and Rule 152 of the Tax 13 Court Rules of Practice and Procedure. 14 15 16 17 18 19 20 21 22 23 24 25 Petitioner appeared pro se and Alicia Elliott appeared on behalf of respondent. FINDINGS OF FACT Certain facts are stipulated. The stipulation of facts, with accompanying exhibits, is incorporated by this reference. The facts are so found. Petitioner resided in Arizona at the time he filed the petition. Petitioner was born on July 16, 1988 and thus was 21 years old at the end of 2009 Petitioner began residing at a home on E. Mobile Lane in Phoenix, Arizona (the home) during October 2009. Dora Rosales and her two children, C.G. and J.G. also began residing at the home Heritage Reporting Corporation (202) 628-4888 4 1 2 in the same month. Petitioner views Ms. Ros les as his stepsister. 3 Petitioner is not related to Ms Rosales, however, by 4 5 6 7 8 9 10 11 blood or marriage. C.G. was 7 and J.G. was 3 during 2009. They are the children of Ms. Rosales. Petitioner is not the biological father of either child. Additionally, petitioner was not the adoptive parent or the foster parent of either child during 2009. Petitioner filed a Federal income tax return for 20Ó9 on which he claimed various deductions and credits 12 with respect to C.G. and J.G. First, he claimed 13 14 15 dependency exemptions for C.G. ånd J.G. Second, he claimed C.G. and J.G. as qualifying children for purposes of the earned income credit andithe child tax credit. 16 Finally, he claimed C.G. and J G. as dependents for 17 18 purposes of qualifying as a head of household. Respondent determined a $7,240 deficiency in 19 petitioner's Federal income tax for 2009 in a deficiency 20 notice dated July 26, 2010. Respondent disallowed 21 petitioner's claimed dependency exemptions, child tax 22 credit and earned income credit. Respondent adjusted 23 petitioner's filing status from "Head of Household" to 24 25 "Single". Finally, respondent increased petitioner's gross income by $4,801, but respondent now concedes this Heritage Reporting Corporation (202) 628-4888 5 1 2 3 4 5 6 7 8 9 10 11 12 adjustment. Petitioner contests the remaining adjustments in the deficiency notice. OPINION We are asked to decide whether petitioner may claim certain tax benefits asso iated with C.G. and J.G. We begin with the burden of pro f . Burden of Proof Petitioner generally ha the burden of proof . See Rule 142(a). Section 7491 does not shift the burden of proof to respondent in this ca é because petitioner failed to introduce any credible evidence and failed the substantiation requirements under section 7491. 13 Accordingly, the burden remalns w1th petitioner. 14 15 16 17 18 19 20 21 22 23 24 Dependency Exemption Deductions We now address whether etitioner is entitled to the dependency exemptions . A t xpayer is allowed an annual exemption deduction for each "dependent" as defined in section 152. Sec. 151(c). The term "dependent" includes a qualifyihg child and a qualifying relative. Sec. 152(a). Various requirements must be met for a child to be "a qualifying child" with respect to a taxpayer. See sec. 152 (c) . Relevant here, the child must bear a certain relationship to the taxpayer . Sec . 152 (c) (1) (A) . 25 Specifically, the child must be a child of the taxpayer Heritage Reporting Corporation (202) 628-4888 6 1 2 3 4 or a descendant of a child of the taxpayer, or a brother, sister, stepbrother, stepsister of the taxpayer or a descendant of any such relative. Sec. 152(c) (2). Here petitioner had no such relationship with C.G. or J.G. 5 Additionally, a qualifying child must share the same 6 7 principal place of abode as the ;taxpayer for more than one half of the taxable year. Sec. 152(c) (1) (B). 8 Petitioner did not establish thät he shared the same 9 principal place of abode with C.G. or J.G. for more than 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 one half of 2009. Thus, neither child is a qualifying child of petitioner. They are also not qualifying relatives with respect to petitioner. An individual is not a qualifying relative with respect to a taxpayer if the individual is a qualifying child of another taxpayer. Sec. 152(d) (1) (D). Here, both C.G. and J.G. can be classified as "a qualifying child" of thei mother, Ms. Rosales. Therefore, neither child is a qualifying relative of petitioner. Because neither C.G. nor J.G. is a qualifying child or qualifying relative of petitioner, petitioner is not entitled to claim either child as a dependent. Head of Household Filing Status We next address whether petitioner is eligible for head of household filing status. A taxpayer will qualify Heritage Reporting Corporation (202) 628t4888 1 2 3 4 5 6 7 8 9 for head of household status if the taxpayer maintains as his or her home a household that is the principal place of abode of either a qualifying child or any other person who is a dependent of the taxpayer for more than one-half of the taxable year. Sec. 2(b). An individual maintains a household only if he furnishes over half the costs of maintaining the household during the taxable year. Sec.2(b) (1); sec. 1.2-2(b) (1), Income Tax Regs. The costs of maintaining 10 the household include property axes, mortgage interest, 11 utility charges, upkeep and repairs, property insurance, 12 13 14 15 16 17 18 19 20 21 22 23 24 25 and food consumed on the premisès. Seç. 1.2-2(d), Income Tax Regs. Here, petitioner has failed to show that he paid the costs of maintaining any household let alone the household in which C.G., J.G. or Ms. Rosales lived in 2009. Moreover, as previously discussed, petitioner does not bear the requisite relation to C.G. and J.G. required under section 152(c) (2) for either of them to be a qualifying child with respect to petitioner. Therefore, neither child is a qualifying child for purposes of petitioner being considered a hdad of household. See sec. 2(b) (1) (A) (I). We now consider whether C.G., J.G. or Ms. Rosales qualifies as a dependent of petitioner. We note that Heritage Reporting Corporation (202) 628 4888 8 1 petitioner did not claim Ms. Rosales as a dependent. For 2 3 4 5 6 7 8 the sake of completeness, we address whether she is a dependent of petitioner. As previously mentioned, a dependent is a qualifying child or a qualifying relative. Sec. 152(a). Because C.G., J.G. and Ms. Rosales are not qualifying children of petitioner, they may be dependents of petitioner only if they are,qualifying relatives. Petitioner has failed to prove that C.G., J.G. or 9 Ms. Rosales are qualifying relatives. As previously 10 mentioned, C.G. and J.G. are the qualifying children of 11 Ms. Rosales and therefore cannot be qualifying relatives 12 with respect to petitioner. Sec. 152(d) (1) (D). In 13 14 addition, petitioner has failed to show that Ms. Rosales is a qualifying relative under section 152(d) (1) (A). 15 Specifically, petitioner has n$t proven that Ms. Rosales 16 17 18 is related to him or that he provided over one half of her support for 2009. Accordingly, petitioner is not entitled to claim head of household status for 2009. 19 Child Tax Credit 20 21 22 23 24 25 We next address whether petitioner is entitled to the child tax credit. A taxpayer may claim a child tax credit with respect to each "qualifying child". Sec. 24 (a). The term "qualifying child" is defined as an individual the taxpayer may claim as·a qualifying child under section 152(c) who is not 17 years old. Sec. 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 24 (c) (1) (A). We have already held that neither C.G. or J.G. is a qualifying child under section 152(c) with respect to petitioner. Accordingly, neithér child is a "qualifying child" within the meaning of se tion 24 (c). It follows, therefore, that petitioner is not entitled to a child tax credit under section 24 (a) or an additional child tax credit under section 24 (d). Earned Income Credit Finally, we address whether petitioner is entitled to the earned income credit. Eligible individuals may claim an earned income credit on their Federal tax return. Sec. 32(a).. An individual is eligible if he or she either has a qualifying child for the taxable year, or has a principal place of abode in the United States for more than one-half of the taxable year, is between the ages of 25 and 65 before the close of the taxable year and is not a dependent fo whom a deduction is allowable under section 151 to another taxpayer. Sec. 32(c) (1) (A) (I). Petitioner was less tha 25 years old at the close of 2009. Accordingly, petitioner was an eligible individual for 2009 only if he had a qualifying child for that year. A "qualifying child" means a qualifying child as defined in section 152(c) (determined without regard Heritage Reporting Corporation (202) 628-4888 10 1 2 3 4 5 6 7 to paragraph (1) (D) of section 152 and section 152 (e) ) . Sec. 32(c) (3). As relevant here, a qualifying child means an individual who bears a specified relationship to the taxpayer as described in section 152 (c) (2) and an individual who also had the same principal place of abode as the taxpayer for more than one-half of the taxable year. Secs . 32 (c) (3) , 152 (c) . We have already held that 8 petitioner failed to satisfy both of these requirements 9 with respect to C.G. and J.G. Petitioner is therefore 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 not an eligible individual and is not entitled to the earned income credit for 2009. Based upon the foregoing, the Court sustains respondent's adjustments in the deficiency notice with the exception of the adjustment increasing petitioner's gross income, which respondent has conceded. To reflect the foregoing, and respondent's concession, a decision will be èntered under Rule 155. THIS CONCLUDES THE COURT'S ORAL FINDINGS OF FACT AND OPINION IN THIS CASE . (Whereupon, at 1:14 p.m. , the bench opinion in the above -entitled matter was conclùded . ) // // // // Heritage Reporting Corporation (202) 628 4888