TAX COURT OPINION

Case: Lisa Renee Bruton
Docket Number: 30572-09
Judge: Colvin
Opinion Type: bench
Filed: 02/24/2011
Pages: 7

UNITED STATES TAX COURT WASHINGTON, DC 20217 KVC LISA RENEE BRUTON, Petitioner, v. ) Docket No. 30572-09 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 petitioner and to respondent a copy of transcript of January 27, 2011, containing her oral opinion rendered in this case after the trial. the pages of the above case before Judge Diane L. Kroupa on findings of fact and transmit the to In accordance with the oral findings of fact and opinion, decision will be entered for petitioner. (Signed) Diane L. Kroupa Judge Dated: Washington, D.C. February 24, 2011 SERVED Feb 25 2011 2 1 2 3 4 5 6 7 8 9 10 11 12 13 Bench Opinion by Judge Diane L . Kroupa aruton v. Commissioner Docket No. 30572-09 January 27, 2011 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. These oral findings of fact and opinion shall not be relied upon as precedent in any other case. This bench opinion is made pursuant to the authority granted by section 7459(b) and Rule 152. All section references are to the Internal Revenue Code for 2006, 2007 and 2008, referred to as the years 14¯ at issue, and all Rule references are to the Tax Court 15 16 17 18 19 20 21 22 23 24 25 Rules of Practice and Procedure. Kathlyn coulter Curtis appeared on behalf of Petitioner, and Bettina Nadler appeared on behalf of Respondent. FINDINGS OF FACT Certain facts have been stipulated. The stipulation of facts and the supplemental stipulation of facts, with accompanying exhibits, are incorporated by this reference. The facts are so found. Petitioner was previously married to William Bruton, with whom she had two children, a daughter and Heritage Reporting Cofporation (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 3 a son. Petitioner and her ex-husband were divofced in 2003.. They had joint custody of the two children. They agreed which school district would be best for the children and which school they would attend ,Each parent provided a separate household-for the two children during the years at issue. Petitioner maintained an apartment in, Katy, Texas, then later an eight-acre property in Hempstead, Texas, towards the end of the years at issue. Each residence that Petitioner maintained had separate bedrooms for the two children. The children were also listed as residents or occupants on the leased premises for the relevant years. Petitioner's ex-husband also maintained a single-family house, first in Stafford, Texas, then in Sugar Land, Texas, during the relevant years. Petitioner and her ex-husband agreed in the divorce settlement that Petitioner would be entitled to claim the two children as dependents, regardless of with whom the children resided. The children resided with Petitioner often three days a week during the school year. This included Friday, Saturday, Monday holidays, in-service days, holiday breaks, and spring break. The children also spent the summers with Petitioner. Her apartment 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 4 complex had a swimming pool, and the children enjoyed the ATV she had for them on the eight-acre property. The only time the children did not live with Petitioner during the summer was for approximately three weeks when they visited their grandparents in St. Louis or attended a tony Christian camp Petitioner' s in-laws financed. Petitioner claimed a dependency exemption for each of thé children and an earned income credit for the children on her Federal tax returns for the years at issue. Petitioner's ex-husband also claimed the children as dependents in violation of the divorce agreement . Respondent issued Petitioner a deficiency notice for the years at issue. The parties have resolved all issues in the case for the three years at issue, except whether Petitioner is entitled to the earned income credit for 2006 and 2007, the relevant years . Respondent concedes that Petitioner is entitled to the dependency exemptions for the children for the years at issue. OPINION Different rules apply to allow a parent to claim a child as a dependent for different purposes of the Code. A qualifying thild for the dependency Heritage Repórting 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 exemption under section 152 is different than a qualifying child for earned income credit purposes under section 32. We focus on the earned income credit Petitioner claimed on her return-for the years. at issue. Eligible individuals may claim an earned income credit on their Federal tax return. Sec. 32(a). An individual is eligible if he or she has a qualifying child for the taxable year. Sec. 32(c) (1) (A) (i). A qualifying child for this purpose is anyone who satisfies three requirements set forth in section 32(c) relating to the age, residency and relationship to the taxpayer claiming the credit. Respondent concedes that the children satisfy the age and relationship requirements. Respondent only challenges the residency requirement. The residency requirement mandates that the taxpayer and the child must share -the same principal place of abode for more than half of the taxable year for which the earned income credit is claimed. Sec. 32(c) (3). Certain temporary absences, such as education, business or vacation should not be counted against taxpayers in determining whether taxpayers lived with a qualifying child.for'more than half the taxable year. Rowe v. Commissioner, 128 T.C. 13(2007). Here, we must decide whether Petitioner and her two children 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 6 had the same "principal place of abode" for at least half of each relevant year. In making hès determination, we exclude the three weeks each summer that the children.spent with their grandparents in St. - Louis or attended the Christian camp the grandparents financed. This three-week period is treated as a temporary absence for residency.requirements. This was a complicated case, because both parents maintained a home for the òhildren. The result would have been different had Petitioner not leased space large enough for the children to have separate bedrooms to call their own or "home." As we stated previously, we find that the children resided with Petitioner at least three days a week during the school year. We acknowledge that there was conflicting testimony regarding how many days the children resided with Petitioner during the school year. We tipped the scales in Petitioner's favor, given her job.flexibility to handle Monday holidays or in-service days. Moreover, there was no conflitting testimony that the children resided with Petitioner during the summer. There was only at question how long the children were in camp or stayed with their grandparents during the summer. We exclude this uncertainty in our calculation. Accordingly, we find 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 that Petitioner's children spent more than half of each relevant year liking with Petitioner, and therefore, Petitioner has satisfied the residency requirement for the darned income credit. Petitioner is therefore entitled to the earned income credit she claimed for the children for the relevant years; To reflect the foregoing, a decision will be entered for Petitioner. This concludes the Court's oral findings of fact and opinion in this case. (Whereupon at 10:52 a.m., the bench opinion in the above-entitled matter was concluded.) // // // // // // // // // // // // // Heritage Reporting Corporation (202) 628-4888