TAX COURT OPINION

Case: Helen A. Harding
Docket Number: 25577-16S
Judge: Leyden
Opinion Type: bench
Filed: 05/04/2018
Pages: 9

CT UNITED STATES TAX COURT WASHINGTON, DC 20217 HELEN A. HARDING, Petitioner, v. ) ) ) ) Docket No. 25577-16S. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ORDER Pursuant to Rule 152(b), Tax Court Rules of Practice of 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 Special Trial Judge Diana L. Leyden at Aberdeen, South Dakota, containing her oral findings of fact and opinion rendered at the trial session at which the case was heard. In accordance with the oral findings of fact and opinion, a Decision will be entered for petitioner. (Signed) Diana L. Leyden Special Trial Judge Dated: Washington, D.C. May 4, 2018 SERVED May 04 2018 1 2 3 4 5 6 7 8 9 Bench Opinion by Special Trial Judge Diana L. Leyden April 18, 2018 Helen A. Harding v. Commissioner of Internal Revenue Docket No. 25577-16S 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. See Rule 152(c), Tax 10 Court Rules of Practice and Procedure. 11 12 Hereinafter in this bench opinion, all Rule references are to the Tax Court Rules of Practice and 13 Procedure, and all section references are to the Internal 14 Revenue Code, as amended, in effect at all relevant times. 15 This proceeding was heard as a Small Tax Case 16 pursuant to the provisions of section 7463 and Rules 170 17 through 174. This bench opinion is made pursuant to the 18 authority granted by section 7459(b) and Rule 152. 19 The Court uses the term "Internal Revenue 20 Service" or "IRS" to refer to administrative actions taken 21 outside of these proceedings. The Court uses the term 22 "respondent" to refer to the Commissioner of Internal 23 Revenue, who is the head of the IRS and is respondent in 24 this case, and to refer to actions taken in connection 25 with this case. cdbers 73)406-2250|operationseescribers.net|www.esalbers.net 4 Minor children are identified in this bench opinion by initials. See Rule 27(a)(3). The trial of this case was conducted on April 23, 2018, in Aberdeen, South Dakota. Petitioner appeared on her own behalf. Timothy Peel appeared on behalf of respondent. In a notice of deficiency dated September 6, 2016, the IRS determined a deficiency in petitioner's 2014 Federal income tax of $1,000. In the notice of deficiency the IRS disallowed casualty and theft losses of $100 reported on Schedule A, Itemized Deductions, and a dependency exemption deduction for petitioner's son, P.H., on the basis that P.H. was claimed as a dependent by another taxpayer. As a result of the disallowed dependency exemption deduction, the IRS disallowed a claimed additional child tax credit. Petitioner did not raise the issue of the 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 disallowed casualty and theft losses of $100 in her 19 petition, and she presented no evidence or argument on the 20 issue at trial. This issue is therefore not properly 21 before the Court and is deemed conceded. See Rule 22 34(b)(4) ("Any issue not raised in the assignments of 23 error shall be deemed to be conceded."). 24 The only issued raised by parties at trial was 25 whether petitioner had released the dependency exemption (973)406-2250|operationsees ribers.net|www.escribersmet deduction for P.H. to Ms. Schroeder by allegedly signing a Ja Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent. Respondent did not argue that petitioner did not otherwise satisfy the requirements to claim P.H. as her qualifying child for 2014. Therefore the only issue for the Court to decide is whether the signature on a Form 8332 is that of petitioner. If it is not, then petitioner was entitled to claim a dependency exemption deduction for her son, P.H., and the additional child tax credit with respect to P.H. The Court finds that the signature on the Form 8332 1 2 3 4 5 6 7 8 9 10 11 .12 bearing a date of "3/30/07" was not that of petitioner and 13 14 15 that petitioner credibly testified as to circumstances that convince the Court that she would not have signed the Form 8332. 16 Background 17 18 Some of the facts are stipulated and are so found. The first stipulation of facts and attached 19 exhibits and the supplemental stipulations of facts and 20 21 22 23 24 25 attached exhibits are incorporated herein by this reference, with the following exception: Exhibit 4-R is not admitted on the basis of hearsay. Further, lAh(cid:16)254Vdt4C£ the Court sustained respondent's objections that Exhibits 19-P, 21-P, 22-P, and 23-P were not relevant to the tax year at issue, 2014, because they pertain to modifications of a } MIIEl 1973)406-2250|operationseescrberuwt|www.escribers.net 6 1 2 3 4 5 6 7 8 9 child support agreement after the year at issue. Petitioner resided in the State of South Dakota at the time that the petition was filed with the Court. . Petitioner gave birth to her son, P.H., on July 13, 2001. Jey Schroeder is the father of P.H. Mr. Schroeder is essentially an absent parent. Aside from two years, 2004 and 2005, when he took P.H. to a McDonald's on Thursdays, he has not been involved in raising P.H. Petitioner, on the other hand, is the custodial parent. 10 Mr. Schroeder was ordered to pay child support but as of 11 2008, he was in arrears. In 2008 petitioner filed with 12 State of South Dakota Circuit Court for the Seventh 13 Judicial Circuit a Petition and Affidavit for a Protection 14 Order (Domestic Abuse) (hereinafter protective order 15 petition) after incident that occurred on December 16, 2008. 16 17 Petitioner has a habit of signing her name "H.A. 18 Harding" or "H. Anne Harding" on other forms and 19 documents, such as her driver's license and Social 20 Security card. The only evidence in the record that shows 21 22 her signature as "Helen Anne Harding" is the protective order petition, which was captioned using her full name. 23 The Court also observed that her signature tilts to left 24 on that document as well as on her driver's license and 25 Social Security card and that the "H" in "Harding" Cribers (973}406-2250|operationseescrbers.net[www.escribers.net 7 1 2 3 4 5 6 contains a loop. Respondent provided a copy of a Form 8332, revised as of January 2006, that purports to contain two signatures by petitioner releasing the dependency exemption deduction for P.H. to Mr. Schroeder. In the first block of the Form 8332, the signature "Helen" is 7 written in print and "Anne Harding" is written in cursive 8 9 but does not contain the loop in the "H" of "Harding" that is in petitioner's signature in the protective order 10 petition. This block relates to a release of a dependency 11 12 13 14 15 16 17 exemption deduction for P.H. for 2006. In the second block of the form there is another signature in which all three names, "Helen", "Anne", and "Harding", are in cursive and are different from the signature in the first block. This block purports to release the dependency exemption deduction for 2007 through 2018. 18 Discussion 19 Generally, the Commissioner's determination of a 20 deficiency is presumed correct, and the taxpayer bears the 21 burden of proving it incorrect. See Rule 142(a); Welch v. 22 Helvering, 290 U.S. 111, 115 (1933). Deductions are a 23 matter of legislative grace, and the taxpayer bears the 24 25 burden of proving entitlement to any deduction claimed. INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992); New (973)406-2250|operationseescribersnet|www.esalbersJiet 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934). Under section 7491(a), the burden of proof may shift to the Commissioner if the taxpayer produces credible evidence with respect to any relevant factual issue and meets other requirements. Petitioner has not argued that section 7491(a) applies nor established that its requirements are met. The burden of proof remains with petitioner. Petitioner credibly testified that she did not sign the Form 8332, a copy of which respondent provided as a stipulated exhibit. Upon review of the signature on the stipulated protective order petition and her signature on her driver's license and Social Security card, which she showed to both the Court and respondent's counsel, the 15 Court finds that petitioner has met her burden of proving 16 that the signatures on the Form 8332 are not her 17 18 signatures. In addition, petitioner credibly testified she 19 had a habit of filing her prior tax returns for 2006 20 21 through 2009 before March 30. Respondent's counsel indicated that he was not aware of any other year in which 22 the IRS had disallowed or challenged petitioner's claimed 23 dependency exemption deduction for P.H., despite the 24 proffered Form 8332 purporting to relate to 2007 through 25 2018. Petitioner also credibly testified that she had (973)406-2250|operations@estrbers.netlwwwsscrbers.net 9 1 2 3 4 5 6 7 8 9 claimed a dependency exemption deduction for P.H. for 2006 through 2009. She testified that she could not locate copies of her tax returns for 2010 through 2013, which is why she could not testify as to claiming a dependency exemption deduction for P.H. for those years. Petitioner also credibly testified that as of the date on the Form 8332, she had been harassed by Mr. Schroeder and that he had been in arrears with his child support obligation. These facts support petitioner's 10 assertion that she would have been unwilling to release 11 12 her dependency exemption. Respondent did not call Mr. Schroeder as a 13 witness to testify as to the Form 8332 and instead 14 produced an affidavit by Mr. Schroeder. However, without 15 Mr. Schroeder's testimony at the trial the Court is unable 16 to determine the veracity or credibility of the statements 17 18 19 in the affidavit, especially considering the fact-specific inquiry for the issue before the Court. The Court concludes that petitioner is entitled 20 to claim a dependency exemption deduction for P.H. as 21 qualifying child on her 2014 tax return and is entitled to 22 the additional child tax credit with respect to P.H. for 23 24 25 that year. In order to give effect to our disposition of the disputed issues, a decision will be entered for 973)406-2250|operationseescribers.net|www.escribers.net 1 2 3 4 petitioner. THIS CONCLUDES THE COURT'S ORAL FINDINGS OF FACT AND OPINION IN THIS CASE. (Whereupon, at 2:42 p.m., the above-entitled 10 5 matter was concluded.) 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 ) cribers (973)406-2250|operationseescrbers.twt|wwwasoibers.net