TAX COURT OPINION

Case: Donnell Thompkins & Suzanne L. Thompkins
Docket Number: 2183-14S
Judge: Buch
Opinion Type: bench
Filed: 12/09/2014
Pages: 8

S4 Auk SEC UNITED STATES TAX COURT WASHINGTON, DC 20217 DONNELL THOMPKINS & SUZANNE L. THOMPKINS, Petitioners, v. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ) ) ) Docket No. 2183-14S. ) ) ) ) ) ORDER Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it is ORDERED that the Clerk of the Court shall transtnit with this order to both petitioners and respondent a copy of the pages of the transcript of the trial in this case that contain the oral findings of fact and opinion that was rendered at the trial session at Washington, D.C. In accordance with the oral findings of fact and opinion, decision will be entered for respondent. (Signed) Ronald L. Buch Judge Dated: Washington, D.C. December 5, 2014 SERVED Dec092014 Capital Reporting Company 3 1 Bench Opinion by Judge Ronald L. Buch 2 October 31, 2014 3 Donnell Thompkins and Suzanne L. Thompkins v. Commissioner Docket No. 2183-14S THE CLERK: Docket number 2183-14S, Donnell Thompkins and Suzanne L. Thompkins. Please state your appearances. 5 6 8 THE COURT: The following represents the 10 Court' s oral findings of fact and öpinion. The oral 11 12 13 15 16 18 19 20 21 22 23 24 25 findings of fact and opinion may not be relied upon as precedent in any other case. This opinion is. in conformity with Section 7459 (b) and Rule 152 (a) . This case was heard pursuant to Section 7463 of the Internal Revenue Code in effect when the Petition was filed. Unless otherwise indicated, all section references are to the Internal Revenue Code in effect for the years in issue, and all rule references are to the Tax Court Rules of Practice and Procedure. Under Section 7463 (b) the decision to be entered in this case is not reviewable by any other court. And this opinion may not be treated as precedent in any other case. The issue in this case is whether the Thompkins' can claim a dependency exemption and child 866.488.DEPO twww.CapitalReportingCompany.com Capital Reporting Company 4 1 2 3 4 5 6 7 8 9 tax credits for Ms. Thompkins' two children for 2010 when Ms. Thompkins was the non-custodial parent. In order for a non-gustodial parent to be entitled to these exemptions and credits, Section 152(e) requires that the custodial parent relinquish their claim. We hold that the Thompkins' are not entitled to the exemptions and credits, because there was no evidence of a release by the custodial parent. Findings of fact. Ms. Thompkins has two 10 minor children from a previous marriage to Mr. John 11 12 13 S. Porter. On February 18, 2010, the Circuit Court for Montgomery County, Maryland ordered the children would stay with their father, Mr. Porter, for the 14 majority of the time, but the children were allowed 15 16 to stay with Mrs. Thompkins according to the 1 following schedule, every other weekend, every 17 Wednesday from 5:00 p.m. to 9:00 p.m. and on Friday 18 19 20 21 22 23 24 evenings from 5:00 p.m. to 9:00 p.m. for the weekends that the children were not staying with Mrs. Thompkins. Additionally, Mrs. Thompkins was ordered to pay Mr. Porter child support. Mr. and Mrs. Thompkins timely filed their 2010 US individual income tax return form 1040 and claimed Mrs. Thompkins' two 25 minor children as dependents. Accordingly, the 866.488.DEPO twww.CapitalReportingCompany.com Capital Reporting Company 5 1 2 3 4 5 6 7 8 9 10 11 Thompkins took a dependency exemption deduction and a child tax credit for each child. The children's father, Mr. Porter, also claimed the children as dependents in 2010. On January 18, 2014, the Commissioner issued a Notice of Deficiency for tax year 2010 that disallowed the dependency exemptions and child tax credits. The.Thompkins timely petitioned to challenge the Commissioner's determination. Opinion. As a general matter the Commissioner's determinations in the Notice of 12 Deficiency are presumed correct, and the taxpayer 13 bears the burden of proving an error, Rule 142(a), 14 Welch v. Helvern, 290 US 111 at 115, 1933. Further, 15 16 17 18 19 20 21 22 23 24 25 Income tax deductions are considered a matter of legislative grace and the taxpayer bears the burden of proving an entitlement to any claimed deduction or credit, Rule 142(a), in Dopco v. Commissioner, 503 US 79 at 84, 1992. The Thompkins do not argue that the burden should shift to Respondent under Section 7491(a), and the record does not illustrate that the requirements of Section 7491(a) are met. Therefore the Thompkins' bear the burden of proof. Dependency exemptions. Section 151(c) allows a taxpayer additional exemption deductions for 866.488.DEPO twww.CapitalReportingCompany.com Capital Reporting Company 6 1 2 3 4 5 6 7 8 9 dependents, if the child qualifies as a dependent under Section 152. Section 152(a) provides that a dependent is either a qualifying child or qualifying relative. Generally, among other requirements, a qualifying child must share a residence with the person claiming the dependency exemption for more than six months of the taxable year, Section 152(c)(1)(B). If a child is not a qualifying child, then a person claiming a dependency exemption on the 10 basis that the child is a qualifying relative, 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 generally among other requirements, must show that they provided more than one half of the support for that child during the taxable year, 152(d)(1)(C). However, Section 152(e) has a special rule for divorced parents, separated parents and parents who live apart to determine which parent is entitled to a dependency exemption deduction. Section 152(e) provides that notwithstanding the general requirements for qualifying children and qualifying relatives mentioned above, the custodial parent is entitled to the dependency exemption, unless the custodial parent releases the claim to the exemption for that year. Section 152(e)(4)(A) defines the custodial parent as that parent who has custody of the child for the greater portion of the calendar 866.488.DEPO twww.CapitalReportingCompany.com Capital Reporting Company 1 2 year. In order for the non-custodial parent to claim the exemption the custodial parent must sign a 3 written declaration that the custodial parent will 4 5 6 7 8 9 not claim the dependent for that taxable year and that declaration must be attached to the non- custodial parent's return, Section 152(e)(2). The declaration required under Section 152(e)(2) must be made either on a completed form 8332 or on a statement conforming to the substance of form 8332. 10 Miller v. Commissioner, 114 TC 184 at 189, 2000. 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Form 8832 is titled Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent, and requires the following, the name of the child, the custodial parent's social security number, the signature of the custodial parent, and the date the form was signed. In this case Mrs. Thompkins is the non-custodial parent, because she did not have custody of the children for the greater portion of the year at issue. Mrs. Thompkins did not attach a form 8832 or any other release by the custodial parent to her 2010 return. Nor is there any evidence of an unequivocal court order signed by the custodial parent before July 2, 2008 that entitled Ms. Thompkins to the exemptions. See Reg. Section 1.152- 4(e)(1). Because there is no evidence of a release 866.488.DEPO twww.CapitalReportingCompany.com Capital Reporting Company 8 1 2 3 4 5 6 7 8 9 by the custodial parent, Mr. Porter, the Thompkins are not entitled to claim the dependency exemptions for 2010. Two, child tax credit. Taxpayers are allowed a credit against their income tax for any qualifying child for whom the taxpayer was allowed a deduction under Section 151, the dependency exemption deduction, Section 24 (a) . A qualifying child is defined by the requirements in Section 152(c) as 10 modified by Section 152(e), Section 24(c)(1). 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Because the two children are not qualifying children of Mrs. Thompkins for 2010, the Thompkins are not entitled to a child tax credit in 2010. Three, additional arguments. The Thompkins argued at trial that Respondent should not be able to challenge the dependency exemptions and child tax credits they claimed for 2010, because the Commissioner allowed Mrs. Thompkins to take these in previous years. However, the Thompkins are mistaken. It is well settled that even if the Commissioner erroneously may have accepted the tax treatment of certain items in previous years, he is not precluded from correcting that error in a subsequent year. Hawkins v. Commissioner, 713 F 2nd, 347 at 351 to 352, 1983, affirming TC Memo 1982-451. The Supreme 866.488.DEPO twww.CapitalReportingCompany.com Capital Reporting Company 9 1 2 Court has also noted that in the Agency's failure to assert a power, even if prolonged, cannot alter the 3 meaning of a statute. US v. Woods, 134 Supreme Court 4 5 6 7 8 9 10 11 12 13 14 15 547, Note 5, 2013. Therefore, our focus is on whether the Thompkins were entitled to the deductions and credits that they claimed under the law for 2010. Despite the Commissioner' s prev1ous acqulescence, we find that they were not entitled to the deductions and credits. Conclusion. We commend the Thompkins for providing support for Mrs. Thompkins two children. However, the tax law as written does not allow them the deductions and credits they claim. The Court is bound by the laws as written. We sustain the Commissioner' s determination in the Notice of 16 Deficiency for 2010. An appropriate order and decision will be forthcoming. (Whereupon, at 12:20 p.m. the above- entitled matter was concluded.) 17 18 19 20 21 22 23 24 25 866.488.DEPO twww.CapitalReportingCompany.com