TAX COURT OPINION

Case: Tomikann M. Hatchett
Docket Number: 26573-10
Judge: Laro
Opinion Type: bench
Filed: 11/21/2011
Pages: 7

UNITED STATES TAX COURT WASHINGTON, DC 20217 RMM TOMIKANN M. HATCHETT, Petitioner, Docket No. 26573-10 COMMISSIONER OF INTERNAL REVENUE, Respondent O R D E R 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 transcript of the hearing in the above case before Judge David Laro at Detroit, Michigan, on October 27, 2011, containing his oral findings of hearing. fact and opinion rendered at the the conclusion of the In accordance with the oral findings of fact and opinion, decision will be entered under Rule 155. (Signed) David Laro Judge Dated: Washington, D.C. November 21, 2011 SERVED Nov 21 2011 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 3 Bench Opinion By Senior Judge David Laro Tomikanr M. Hatchett v. Commissioner Docket Fo . : 26573 -10 October 27, 2011 THE COURT: The Court has decided to render Oral Fir dings of Fact and Opinion in this case . This bench of inion is made pursuant to the authority granted by section 7459 (b) of the Internal Revenue Code, ar d Rule 152 of the Tax Court Rules of Practice and Procedure. Petitioner refers to Tomikann M. Hat chett , Ms . Taylor ref ers . to Crystal Taylor, and WC3 refers to Wayne County Community College. Section references are to the applicable version of the Internal Revenue Code, . and Rule references are to the Tax Court Rules of Practice and . Procedure . Petitioner, while residing in Michigan, petitioned the Court to redetermine respondent's determiration of a $6,429 deficiency in her 2009 Federal income tax. After concessions by respondent, we decide whether petitioner is entitled to a dependercy exemption deduction for her sister. We ' hold, she is not . We. also decide whether the Court should Eua sponte impose a penalty under section 6673. .We will in the amount of $500 . // Heritage Reporting Corporation (202) 628-4888 1 2 3 4 5 6 7 8 9 1p 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 4 Background Petitioner is a bus attendant with Detroit Public Schools. She is the primary caregiver of Ms. Taylor, her sister, and M.H., her niece. Ms. Taylor was borr on March 21, 1989, and graduated from high school in the'spring of 2007. She enrolled at WC3 for the fall semester of 2007, and she was enrolled there throughdut the fall semester of 2008. Ms. Taylor struggled academically and rarely, if ever, attended class. She was not enrolled at WC3 at any point during ;009. Petitioner filed her 2009 Form 1040, U.S. Individual Income Tax Return (2009 return), on which she elected head of household filing status and claimed Ms. Taylor and M.H. as dependents. The 2009 return reported wages of $18,679, a deduction for tuition and fees of $698, and adjusted gross income of $17,981 On the 2009 return, petitioner also claimed an earned income credit of $4,553, an additional child tax credit of $1,000, and a making work pay àredit of $400. In a notice of deficiency dated August 30, 2010, respondent determined a $6,429 deficiency in petitioner's 2009 Federal income tax. The deficiency is attrLbutable to four adjustments. First, 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 5 respondent disallowed petitioner's dependency exemption deductions for Ms. Taylor and M.H. Second, respondent. disallowed the additional child tax credit. Third, respondent disallowed the earned income credit. Fourth, respondent adjusted petitioner's filing status from head of household to single. At trial, respondent conceded that petitioner is entitled to head of household filing status, a dependency exempticn deduction for M.H., and the earned income credit. Discussion The Commissioner's determinations in a notice of deficiency are generally presumed correct, and the taxpayer must prove those determinations erroneous in order to prevail. Rule 142(a); Welch v. Helvering, 290 U.S. 111., 115 (1933). Where a taxpayer meets certain substantiation and recordkeeping requirenents, the burden of proof as to factual matters may shift to the Commissioner. See sec. 7491(a) , Petitioner does not assert, and we do not conclude, that the burden of proof should shift to respondent. See sec. 7491(a) (2) (A) and (B). Respondent determined.that petitioner was not entitled to a dependency exemption deduction for Ms. Taylor. We agree. A taxpayer may claim a 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 dependency exemption deduction for an individual who is either a "qualifying child" or a "qualifying relative". Secs. 151(c), 152 (a). To be a taxpayer's "qualifying child", an individual must: (A) Bear a qualifying relationship to the taxpayer; (B) have the same principal place of abode as the taxpayer for more than one-half of the taxable year; (C) meet certain age regtirements; and (D) not have provided more than one-half of his or her own support for the year. Sec. 152(c) (J). These requirements are in the conjunctive; each recuirement must be met before the Court will treat ar. individual as a qualifying child for purposes of claiming a dependency exemption deduction. We focus on the third requirement and ask ourselves whether Ms. Taylor meets the age requirements of section 152(c) (1). We find that she does not. To satisfy the age requirement, an individual must be under the age of 19 or a student under the age of 24. See sec. 152(c) (3) (A). Because Ms. Tay:.or was more than 19 years old in 2009, she meets the age requirement of a qualifying child only if she was a student under the age of 24 in that year. For purposes of section 152, the term "student" is defined as an individual who during each of 5 months during the year is a fulltime student at an 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 7 educaticnal institution that normally maintains a regular faculty, curriculum, and enrolled body of students in attendance at the place where educational activities are conducted. Secs. 152(f) (2), 170(b) (3) (A) (ii). Petitioner and Ms. Taylor testified at trial that Ms. Taylor was. enrolled at WC3 as a student during 2009, though they were unable to produce documentary evidence to corroborate their claims. The Court held the record open for their. benefit until Wednesday, October 26, 2011, at 12:00 p.m., ir. order to allow petitioner an opportunity to obtain proof of Ms. Taylor's enrollment. Petitioner never provided proof of Ms. Taylor's enrollment. To the contrary, respondent offered a declaration of an administrative specialist at WC3 which stated that Ms. Taylor was not enrolled at WC3 during 2009. We credit that declaration as credible and find that Ms. Taylor was not enrolled as a fulltime student during 2009. It follows that in 2009 Ms Taylor was not a qualifying child under section 152(c), and that ·petitioner is not entitled to a dependency exemption deduction for her in that year. Respondent's determination on this issue is sustained. We next consider sua sponte whether to impose a penalty against petitioner pursuant to 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 8 section 6673 (a) (1) . That section allows. the Court to impose c penalty of up to $25, 000 whenever it ·appears that a t axpayer instituted or maintained a proceeding primarily for delay or that the taxpayer's position is frivolors or groundless. We will impose a penalty upon. petitioner of $500. The record is clear that petitioner's positior in this case regarding her entitlement to claim Ms . Taylor as a dependent is frivolous and , groundle s s . Al though pet it ioner and Ms . Taylor. each testified under oath that Ms. Taylor was enrolled at WC3 as a student during·2009, she was not. Respondent believes that such statements were intentionally deceptive and misleading. We therefore believe that sanctions are appropriate and, pursuant to section 6673 (a) (1) , we imposé .against petitioner a penalty of $500 In reaching these holdings, we have considered all arguments made at trial and, to the extent.not mentioned.above, we conclude that they are moot irrelevant, or without merit . Decision will be entered under Rule 155 . This concludes the Court ' s Oral Findings of Fact and Opinion in this case . (Whereupon, at 9:30 a.m. w the bench opinion in the above-entìtled matter was concluded.) Heritage Repor3ting Corporation (202) 628-4888