TAX COURT OPINION

Case: Todd A. Berthiaume
Docket Number: 12943-13S
Judge: Whalen
Opinion Type: bench
Filed: 10/16/2014
Pages: 13

sòb- Ohded mb / UNITED STATES TAX COURT WASHINGTON, DC 20217 TODD A. BERTHIAUME, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. ) ) ) ) ) ) ) ) ORDER Docket No. 12943-13S 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 proceedings in the above-case before the undersigned at Boston, Massachusetts, containing the oral findings of fact and opinion rendered on September 11, 2014. In accordance with the oral findings of fact and opinion, decision will be entered for respondent. (Signed) Laurence J. Whalen Judge Dated: Washington, D.C. October 16, 2014 SERVED OCT 1 7 2014 Capital Reporting Company Bench Opinion by Judge Laurence J. Whalen 3 September 11, 2014 Todd A. Berthiaume Docket No. 12943-13S FINDINGS OF FACT AND OPINION I. 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. II. This proceeding was heard as a Small Tax Case pursuant 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 and Procedure. Hereinafter, in this bench opinion, 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 all section references are to the Internal Revenue 18 19 Code, as amended and in effect for 2010, the taxable year in issue, and all Rule references are to the Tax 20 Court Rules of Practice and Procedure. Pursuant to 21 22 23 24 25 section 7463(b), the decision to be entered in this case cannot be reviewed in any other court, and this bench opinion shall not be treated as precedent for any other case. III. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 4 This bench opinion is made pursuant to the authority granted by section 7459(b) and Rule 152. IV. Todd A. Berthiaume appeared in these proceedings on his own behalf, and Erika B. Cormier, attorney at law, appeared on behalf of respondent. V. Respondent issued a notice of deficiency to petitioner in which he determined a deficiency of $1,613 in petitioner's Federal income tax for taxable year 2010. The deficiency is based upon two adjustments to petitioner's return. First, respondent disallowed the dependency exemption that petitioner claimed for his son, S.B. Second, as a consequence of the first adjustment, respondent disallowed the Child Tax Credit claimed by petitioner. VI. The issue for decision by The Court is whether petitioner's son, S.B., is petitioner's "qualifying child", as defined by sections 152(c) and (e), such that petitioner is allowed a deduction for the exemption amount under section 151(c) for taxable year 2010. If we find that petitioner's son is not a qualifying child, then petitioner is not allowed 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 25 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 5 child tax credit. VII. Some of the facts have been stipulated by the parties, and are so found. Petitioner resided in I 1 2 3 4 5 Warwick, Rhode Island, when he filed his petition in 6 7 8 9 10 11 this case. Petitioner and his former spouse, Ms. Gisella Berthiaume, were divorced on or about July 3, 2001, after a "short marriage." One child, S.B., was born during their marriage. Pursuant to the Final Judgment by which a Family Court dissolved their 12 marriage, the couple was given joint custody of their 13 14 15 16 17 18 19 20 21 22 23 24 25 son, and Ms. Gisella Berthiaume was given "the physical placement and daily care" of the son. The parties agree that Ms. Gisella Berthiaume is the son's custodial parent for taxable year 2010. Petitioner timely filed his individual income tax return for 2010. On that return, petitioner claimed a personal exemption for himself and a dependency exemption for his son. Petitioner did not attach Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent, or any similar statement to his return. By letter dated July 30, 2012, a representative of respondent asked petitioner to provide additional 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 6 information to substantiate the "Filing Status and Exemptions" claimed on his 2010 return. In response, on August 23rd, 2012, petitioner sent to respondent a copy of a Form 8332 which had purportedly been signed by Ms. Gisella Berthiaume, the custodial parent, on November 9, 2010. On that copy of Form 8332, Ms. Berthiaume purportedly released her claim to an exemption for her son for 2009 (the "current year"), and for 2010 (a "future year"). On the form, Ms. Berthiaume also revoked the release of her claim to an exemption for her son for 2011 and 2012. Subsequently, petitioner's accountant sent a different copy of Form 8332 to respondent. Like the prior Form 8332, the new Form 8332 had also purportedly been signed by Ms. Berthiaume on November 9, 2010. Unlike the prior Form 8332, the new one did not include a revocation of the release for 2011 and 2012. Ms. Berthiaume claimed an exemption for S.B. for each of the taxable years 2009 and 2010. VIII. Dependency Exemption Deduction: Generally, an individual is allowed a deduction for an exemption for "each individual who is a dependent (as defined in section 152) of the taxpayer for the taxable 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 7 1 2 3 year." Sec. 151(c). Section 152(a) defines the term "dependent" to include "a qualifying child." Pursuant to section 152(c), a "qualifying child" 4 must: (i) bear a specified relationship to the 5 6 taxpayer, such as the taxpayer's child, (ii) have the same principal place of abode as the taxpayer for 7 more than one-half of such taxable year, (iii) meet 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 certain age requirements, (iv) have not provided over one-half of such individual's support for the taxable year at issue; and, (v) not have filed a joint return for the years. Sec. 152 (c)(1). In the case of divorced parents, special rules set forth in section 152(e) determine which parent may claim a dependency exemption deduction for a child. Section 152(e) permits a noncustodial parent, under certain circumstances, to claim a dependency exemption for a child. In particular, section 152(e)(2) allows the noncustodial parent to claim a dependency exemption for a child if: (A) the custodial parent signs a written declaration (in such manner and form as the Secretary made by regulations prescribe) that such custodial parent will not claim such child as a dependent for any taxable year beginning in such calendar year, and 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 8 (B) the noncustodial parent attaches such written declaration to the noncustodial parent's return for the taxable year beginning during such calendar year. Such a declaration must unconditionally release the custodial parent's claim to the child as a dependent and must specify the year or years for 1 2 3 4 5 6 7 8 which the declaration is effective. Sec. 1.152- 9 4(e)(1)(I), Income Tax Regs. The noncustodial parent 10 must attach a copy of the written declaration to the 11 12 13 14 15 16 17 18 19 noncustodial parents Federal income tax return for each taxable year for which the child is claim as a dependent. Sec. 1.152-4(e)(2), Income Tax Regs. The written declaration required by section 152(e)(2) must be made by the custodial parent either on Form 8332 or in a statement conforming to the substance of that form. See Miller v. Commissioner, 114 T.C. 184, 190-191 (2000), affd. on another ground sub nom. Lovejoy v. Commissioner, 293 F.3d 1208 (10th 20 Cir. 2002). 21 22 23 24 25 Thus, in order for a child to be the qualifying child of his or her noncustodial parent, the custodial parent must sign Form 8332 or other writing conforming to the substance of Form 8332, releasing the custodial parent's claim to the dependency 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 9 1 2 exemptions. Sec. 152(e)(2) (A). The noncustodial parent must then attach the Form 8332 or equivalent 3 writing to his or her Federal income tax return. 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Sec. 152(e)(2)(B); Miller v. Commissioner, supra at 188-189; Brissett v. Commissioner, T.C. Memo. 2003- 310. Section 1.152-4(e)(2), Income Tax Regs., provides as follows: "Attachment to return. A noncustodial parent must attach a copy of the written declaration to the parent's return for each taxable year in which the child is claimed as a dependent. (Emphasis supplied.) IX. In the present case, we have some question about the validity of the Form 8332 advanced by Petitioner. There is no explanation for the fact that two different Forms 8332 were presented to Respondent. Furthermore, we note that Ms. Gisella Berthiaume, who was not called as a witness, claimed an exemption for S.B. for both 2009 and 2010, the years for which the Form 8332 waived the exemption. Moreover, petitioner and Ms. Berthiaume have joint custody of their son, S.B., under the terms of the Final Judgment. For purpose of the special rules of Section 152(e), however, the parent having custody 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 10 for a greater portion of the calendar year, Ms. Berthiaume, is deemed to be the custodial parent. As the noncustodial parent for purposes of Section 152(e), petitioner is not entitled to claim the dependency exemption for S.B., unless petitioner complies with the provisions of Section 152(e)(2) and the regulations thereunder by attaching to his return a valid Form 8332, or an equivalent written declaration, executed by Ms. Berthiaume. Petitioner did not attach such a declaration or Form 8332 to his return, and accordingly, he is not entitled to the deduction of a dependency exemption for S.B. for the 2010 taxable year. See, e.g., Chamberlain v. Commissioner, T.C. Memo 2007-178 at *8-*9; Brissett v. Commissioner, T.C. Memo 2003-310 at *8-*9. In Chamberlain v. Commissioner, supra, we pointed out that, pursuant to temporary regulations issued in 1984, if a Form 8332 is executed for more than one year, a copy must be attached not only to the original return, but also to the returns for each succeeding year as follows: "Such a [Form 8332] declaration may be executed for a single year, a specified number of years, or for all future years. Sec. 1.52-4T(a), Q & A-4, Temporary Income Tax Regs., 49 Fed.Reg. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 866.488.DEPO www.CapitalReportingCompany.com 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 Capital Reporting Company 11 34459 (Aug. 31, 1984). Where the custodial parent releases his or her exemption for more than one year, the noncustodial parent must attach the original release to his or her Federal income tax return for the immediate taxable year and attach copy of the release to each succeeding return on which he or she claims the dependency exemption." Id. In Chamberlain v. Commissioner, supra, we also stated as follows: Although we,are sympathetic with petitioners' plight, "we are bound by the wording of the statute as enacted and the accompanying regulations, when consistent therewith." Michaels v. Commissioner, 87 T.C. 1412, 1417 (1986). The language of section 152(e), as manifested through its accompanying regulations, is unambiguous. It grants the dependency exemption to a noncustodial parent only when he or she attaches a valid Form 8332 or its equivalent to a Federal income tax return for the taxable year in which he or she claims the exemption. Congress added this written declaration requirement to section 152(e) in 1984 to provide more certainty to the "often 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 12 subjective and * * * difficult problems of proof and substantiation" that accompanied dependency exemption disputes under the prior statute. H. Rept. 98-432, (Part 2), at 1498 (1984). Congress sought clarity as to which of two divorced parents would receive the dependency exemption for a taxable year and accomplished it by conditioning the noncustodial parent's claim upon the written verification of the custodial parent's release of his or her claim. To preserve Congress's goal we must insist on strict adherence to the requirements of section 152. Miller v. Commissioner [114 T.C. 184] at 196; Bramante v. Commissioner, T.C. Memo. 2002- 228. Accordingly, we sustain respondent's determination of the dependency exemption and child tax credit claimed by petitioners for the taxable year 2003. For competing views on whether a late-submitted declaration can be considered "attache[d] * * * to the noncustodial parent's return", see Armstrong v. Commissioner, 139 T.C. 468, 479-481 (2012), (Goeke, J. concurring), and Armstrong v. Commissioner, 139 T.C. at 481, 508, (Holmes, J. dissenting). See also 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 Shenk v. Commissioner, 140 T.C. 200, 205-207 (2013). 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company X. 13 For the reasons set forth above, decision shall be entered for respondent. XI. This concludes The Court's oral findings of fact and opinion in this case. (Whereupon, at 5:22 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 25 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 14 CERTIFICATE OF TRANSCRIBER AND PROOFREADER CASE NAME: Todd A. Berthiaume v. Commissioner DOCKET NO.: 12943-13S We the undersigned, do hereby certify that the foregoing pages, numbers 1 through 14, inclusive, are the true, accurate and complete transcript prepared from the verbal recording made by electronic recording by Catherine Burns, on September 11, 2014, before the United States Tax Court at its session in Boston, Massachusetts, in accordance with the applicable provisions of the current verbatim reporting contract of the Court, and have verified the accuracy of the transcript by comparing the typewritten transcript against the verbal recording. Lisa Beauchamp September 30, 2014 (Transcriber) (Date) Ernest Campbell 10/1/14 (Proofreader) (Date) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 16 17 18 19 20 21 22 23 24 25 866.488.DEPO www.CapitalReportingCompany.com