TAX COURT OPINION

Case: Haider A. Khan
Docket Number: 30255-15
Judge: Goeke
Opinion Type: bench
Filed: 02/10/2017
Pages: 9

Suß=60ck . UNITED STATES TAX COURT WASHINGTON, DC 20217 HAIDER A. KHAN, Petitioner(s), v. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ) ) Docket No. 30255-15. ) ) ) ) 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 Judge Joseph Robert Goeke at Birmingham, Alabama, on January 26, 2017, containing his oral findings of fact and opinion rendered at the trial session at which this case was heard. In accordance with the oral findings of fact and opinion, a decision will be entered for respondent. (Signed) Joseph Robert Goeke Judge Dated: Washington, D.C. February 10, 2017 SERVED FEB 1 4 2017 Capital Reporting Company 3 1 2 Bench Opinion by Judge Joseph Robert Goeke January 26, 2017 3 Haider A. Khan v. Commissioner 4 5 6 7 8 9 10 11 12 Docket No. 30255-15 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. The Oral Findings of Fact and Opinion shall not be relied upon as precedent in any other case. This opinion is rendered pursuant to Rule 152 of the Tax Court Rules of Practice and Procedure, 13 which is authorized by Internal Revenue Code Section 7459(b). 14 15 Hereinafter rule references are to the Tax 16 Court Rules of Practice and Procedure and section 17 18 19 20 21 references are to the Internal Revenue Code. This case is before the Court based upon our jurisdiction toraiew deficiency determinations t notices of deficiency, which are timely petitioned to this Court. In the present case the , 22 Petitioner did timely petition a notice of deficiency 23 24 25 determination by Respondent regarding Petitioner's income tax liability for 2013. The deficiency determined in the notice of deficiency is $2,770. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 4 1 2 3 4 5 6 The principal issue in the case is whether the Petitioner is entitled to dependency exemptions for his two children and whether they qualify as "qualifying children" under Internal Revenue Code Section 152(c) and (e). At the time the petition was filed the 7 Petitioner lived in Alabama. The record at trial 8 9 10 11 12 13 consisted of the stipulation of facts agreed to by the parties with attached exhibits and the testimony of the Petitioner. The two children in question were minor children of the Petitioner and his former spouse and they were under the age of 19 throughout 2013. 14 Neither one of the children provided over one-half of 15 16 17 18 19 20 21 22 23 24 25 their own support and neither one of the children filed a joint federal income tax return. Both the children received over one-half of their support from their parents, the Petitioner and his former spouse. The Petitioner and his former spouse separated in late 2012 and throughout 2013 he and his former spouse maintained separate residences in the area of Tuscaloosa, Alabama. Throughout the year 2013 the Petitioner's former spouse was a medical resident and her adjusted gross income was higher than the Petitioner's. 866.488.DEPO www.Capita1ReportingCompany.com Capital Reporting Company 5 1 2 The parties have stipulated that from January 1st, 2013 to March 21st of the same year the 3 Petitioner and his former spouse did not have a 4 written custody or visitation agreement regarding 5 6 7 8 9 10 11 12 13 14 15 their children. That period included 79 nights. On March 21st, 2013 the Circuit Court of Tuscaloosa County, Alabama issued an order which included a temporary agreement between the Petitioner and Ms former spouse, which provided that they had joint legal custody of the two children and that the former spouse had sole physical custody of the children. This temporary agreement was later superseded by a mediated agreement in contemplation of divorce, which was reached on August 23rd, 2013. 16 The temporary agreement specifies that the Petitioner 17 will have visitation with the children for certain 18 19 20 21 22 23 24 25 specific days. Those days as specified in the agreement would constitute 39 nights during the period when the temporary agreement was in place. The previously mentioned mediated agreement remained in force throughout the remainder of 2013. The mediated agreement specifies that the Petitioner and his former spouse have joint legal custody of the children and that Petitioner's former spouse is the 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 6 1 2 3 4 5 6 7 physical custodian of the children. The mediated agreement specifies that the Petitioner will have visitation with the children for certain specific days. These agreed days constitute 46 nights during the period when the mediated agreement was in place through the end of 2013. Both the temporary agreement and the 8 mediated agreement have a provision which allows 9 visitation by the Petitioner at other reasonable 10 times and places as shall be agreed upon between the 11 Petitioner and his former spouse. 12 This is the portion of the agreements that 13 Petitioner relies upon in his assertion that the 14 15 16 children spent more than the specified days with him in 2013. He also maintains that before the agreements were in place the children spent the 17 majority of their time with him. 18 19 20 21 22 23 24 25 The former spouse did not execute a written declaration pursuant to the provisions of Section 152(e)(2) that she would not claim the dependents for 2013. The Petitioner also relies upon the child support agreement, which provides that he had a smaller obligation than might otherwise be provided based upon the Alabama guidelines, because he had extended parenting obligations. The agreement 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 7 1 2 3 4 5 provides no specific information as to the extent of those obligations other than what we've previously outlined. This case)because of the lack of specific information;turns on the burden of proof. The 6 Petitioner bears the burden of proving that the 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 determinations set forth in the notice of deficiency are erroneous. Rule 142(a). The Petitioner has not provided sufficient evidence nor has he cooperated sufficiently with the Internal Revenue Service in the course of developing information throughout the audit to cause Section 7491(a)(1) and (2) to trigger shifting of the burden of proof to the Respondent. Accordingly, the burden of proof remains on the Petitioner. Given that burden of proof and the fact that the only evidence Petitioner offered to support the fact that the children would have been in his physical custody for over half the year is his testimony, We must determine whether his testimony is sufficient for him to carry the burden of proof. There are two different avenues to analyze this case. One is under Section 152(c), under which the children would potentially be Petitioner's dependents if they had the same principal place of 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 8 1 abode as he did for more than one-half the year. The 2 . other statutory avenue to analyze this case is based 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 upon Section 152(e), which addresses situations where the parents are divorced but basically yields the same test, because it provides that the custodial parent would normally be entitled to the dependency exemptions and defines custodial parent as the parent having custody for the greater portion of the calendar year. Sinc.e custody could be construed to mean the same thing as having the same principal place of abode as the children, the result of those two statutory analyses is the same and both turn on whether Petitioner has sufficiendyestablished that the children lived with him for over one-half of the calendar year. There are several factors which weigh against Petitioner's position. The first is the fact that his former spouse had physical custody of the children pursuant to the state agreements, as enforced by the local county court in Tuscaloosa County. In addition, Petitioner's position overlooks regulatory guidelines, which potentially would give his wife credit for certain days when she 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 9 1 2 3 4 5 6 7 8 worked at night, although she had custody of the children during the daytime. There is simply no evidence in the record to analyze how many of those days existed and how they might impact this situation, but the regulations do provide that a spouse that works in the evening and who had physical custody of the children would be entitled to certain days when the children might not necessarily reside 9 with the spouse that evening. 10 11 12 Given these facts, which are uncertain in the current record, and the fact that Petitioner's estimates as to the number of days the children spent 13 with him were clearly self-serving, we reach the 14 15 16 17 18 19 20 21 22 23 24 25 conclusion that Petitioner simply did not carry his burden of proof and we determine that Respondent's position relative to the two dependency exemptions is sustained. Since Petitioner's arguments relative to head of household and the earned income credit are derivative of his position relative to the dependency exemptions, he likewise loses his argument relative to those two adjustments in this case. Those being the only issues in the case, the result of our analysis is that a decision should be entered for Respondent. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company This concludes the Court's Oral Findings of 10 Fact and Opinion in this case. (Whereupon, at 11:11 a.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