TAX COURT OPINION

Case: Agbai Omebe
Docket Number: 18522-17S
Judge: Guy
Opinion Type: bench
Filed: 05/14/2018
Pages: 10

CLC UNITED STATES TAX COURT WASHINGTON, DC 20217 AGBAI OMEBE, Petitioner, v. ) ) ) ) Docket No. 18522-17S. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) 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 Special Trial Judge Daniel A. Guy, Jr., at Syracuse, New York, containing his 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, decision will be entered for respondent. (Signed) Daniel A. Guy, Jr. Special Trial Judge Dated: Washington, D.C. May 14, 2018 SERVED May 14 2018 p 3 1 2 3 4 5 6 7 8 9 Bench Opinion by Special Trial Judge Daniel A. Guy, Jr. April 26, 2018 Agbai Omebe v. Commissioner of Internal Revenue Docket No. 18522-17S THE COURT: 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. 10 This proceeding for the redetermination of a 11 deficiency is a small tax case conducted pursuant to the 12 provisions of section 7463 of the Internal Revenue Code of 13 1986, as amended, and Rules 170 through 174 of the Tax 14 Court Rules of Practice and Procedure. 15 This bench opinion is made pursuant to the 16 authority granted by section 7459(b) of the Internal 17 Revenue Code of 1986, as amended, and Rule 152 of the Tax 18 Court Rules of Practice and Procedure. 19 20 21 Hereinafter in this bench opinion, section references are to the Internal Revenue Code of 1986, as amended and in effect for 2015 and 2016 (years in issue), 22 and Rule references are to the Tax Court Rules of Practice 23 and Procedure. 24 Petitioner Agbai Omebe, hereinafter petitioner, 25 appeared at trial pro se. Jonathan Bartolomei appeared on (973)406-2250|operationseescrberumt|www.escdbers.net 1 2 3 4 5 6 7 8 9 behalf of respondent. The parties filed with the Court a stipulation of facts, with attached exhibits, which are incorporated herein by this reference. The pertinent facts are as follows. Petitioner and Ehui Blavo are the parents of two minor children: E.O. and A.O. In 2012, petitioner and Ms. Blavo were divorced. At that time, the Supreme Court for the State of New York 10 issued a Judgment of Divorce which stated in pertinent 11 part that petitioner and Ms. Blavo were awarded joint 12 13 custody of the children, petitioner was obliged to pay child support for both children to Ms. Blavo, and 14 beginning in the taxable year 2011, and so long as 15 petitioner remained current in making child support 16 payments to Ms. Blavo, he would be entitled to claim E.O. 17 18 19 as a dependent for tax purposes. Ms. Blavo was entitled to claim A.O. as a dependent. In October 2015, petitioner filed an enforcement 20 petition with the Family Court in Rochester, New York. In 21 February 2016, the Family Court issued a Corrected Order 22 granting petitioner's petition and stating in pertinent 23 part that, so long as petitioner remained current in 24 making child support payments to Ms. Blavo, he would be 25 entitled to claim E.O. as a dependent for tax purposes. (973) 406-2250| operationseescribers.net I www.escribers.net Petitioner testified that E.O. and A.O. resided 5 with him more than 183 days during each of the years in issue. There is no objective evidence in the record, however, to substantiate petitioner's claim. Petitioner filed Forms 1040, U.S. Individual Income Tax Return, for 2015 and 2016 reporting his filing status as head of household. He also claimed two exemptions (including E.O. as a dependent), an earned income credit, and an additional child tax credit for both 1 2 3 4 5 6 7 8 9 10 of the years in issue. Petitioner did not attach to his 11 returns a Form 8332, Release/Revocation of Release of 12 Claim to Exemption for Child by Custodial Parent, signed 13 by Ms. Blavo. 14 Respondent reported that Ms. Blavo claimed both 15 children as dependents for the taxable years in issue. 16 Respondent issued notices of deficiency to 17 petitioner determining income tax deficiencies of $2,459 18 19 and $4,657 for the taxable years 2015 and 2016, respectively. Specifically, respondent determined that 20 petitioner was not entitled to: (1) deductions for 21 22 dependency exemptions for E.O.; (2) head of household filing status; (3) the earned income credit; and (4) the 23 child tax credit. Petitioner filed a timely petition for 24 25 redetermination with the Court. At the time the petition was filed, petitioner resided in New York. Petitioner BEIEI 973)406-2250|operationsgescrbersnet{www.esaibers.net 1 6 1 2 3 4 5 6 7 8 9 contends that E.O. was his qualifying child within the meaning of section 152. We begin our analysis with the fundamental principle of Federal tax litigation that the Commissioner's determinations normally are presumed correct. See INDOPCO Inc. v. Commissioner, 503 U.S. 79, 84 (1992); Welch v. Helvering, 290 U.S. 111, 115 (1933). In conjunction with this principle, tax deductions and credits are a matter of legislative grace, and the 10 taxpayer bears the burden of proving that he or she is 11 entitled to any deduction or credit claimed. See Rule 12 142(a); Deputy v. DuPont, 308 U.S. 488, 493 (1940); New 13 Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934). 14 15 16 Petitioner does not contend, and the record does not suggest, that the burden of proof should shift to respondent pursuant to section 7491(a). 17 Dependency Exemption 18 19 An individual is allowed as a deduction an exemption for "each individual who is a dependent (as 20 defined in section 152) of the taxpayer for the taxable 21 22 23 24 year." Sec. 151(a), (c). Section 152(a) defines the term "dependent" to include a qualifying child or a qualifying relative. Generally, a qualifying child must (1) bear a 25 specified relationship to the taxpayer (e.g., be the (973)406-2250|operationsøescrbers.net|www scribers.net 7 1 2 3 4 5 6 7 8 9 taxpayer's child), (2) have the same principal place of abode as the taxpayer for more than one-half of such taxable year, (3) meet certain age requirements, (4) not have provided over one-half of such individual's own support for the taxable year at issue, and (5) not have filed a joint return for that year. Sec. 152(c)(1). Section 152(d) generally defines a qualifying relative as an individual (1) who bears a specified relationship to the taxpayer (e.g., is the taxpayer's 10 child), (2) whose gross income is less than the exemption 11 12 13 14 15 16 amount, (3) with respect to whom the taxpayer provides over one-half of the individual's support, and (4) who is not a qualifying child of such taxpayer or any other taxpayer. With one exception, respondent does not dispute that E.O. satisfies the various requirements for a 17 qualifying child prescribed in section 152(c). In 18 particular, respondent maintains that petitioner failed to 19 show that E.O. shared the same principal place of abode 20 with him for more than one-half of each of the taxable 21 years in issue. We agree. Petitioner did not offer any 22 objective evidence in support of his testimony on this 23 point. Without more, petitioner has failed to satisfy his 24 burden of proof. 25 Respondent does not dispute that E.O. satisfies (973)406-2250|operationseescribers.net|www.escribers.net 1 2 3 4 5 6 7 8 9 10 11 the various requirements for a qualifying relative prescribed in section 152(d), again with one exception. Respondent maintains that petitioner failed to show that E.O. was not the qualifying child of Ms. Blavo. We agree. Although the Judgment of Divorce states that petitioner is entitled to claim E.O. as a dependent so long as he satisfies his obligation to make child support payments to Ms. Blavo, the fact remains that E.O. may be the qualifying child of Ms. Blavo under the provisions of section 152(c). As discussed above, petitioner failed to show 12 whether E.O. resided with him or Ms. Blavo for more than 13 one-half of each of the taxable years in dispute. 14 15 Finally, we note that section 152(e) provides special rules for divorced parents. Specifically, a 16 noncustodial parent may claim a dependency exemption 17 18 19 deduction with respect to a child if the custodial parent signs a written declaration conforming with Form 8332, indicating that he or she will not claim the dependent 20 child for that year. Although it is unclear on this 21 22 record whether petitioner or Ms. Blavo qualifies as E.O.'s custodial parent, respondent reports that Ms. Blavo 23 claimed E.O. as a dependent for the years in issue and 24 petitioner acknowledge at trial that he never requested 25 that Ms. Blavo execute a Form 8332. See Armstrong v. A Cribers (973)406-2250loperationsoestribers.netlwww.escribersmet Commissioner, 139 T.C. 468, 472 (2012), aff'd, 745 F.3d 890 (8th Cir. 2014). Under the circumstances, section 9 152(e) affords petitioner no relief. Child Tax Credit Section 24(a) provides a tax credit with respect to each qualifying child of the taxpayer for whom the taxpayer is allowed a deduction under section 151. Section 24(c)(1) defines the term "qualifying child" as a "qualifying child of the taxpayer (as defined in section 1 2 3 4 5 6 7 8 9 10 152(c)) who has not attained age 17." As previously 11 discussed, petitioner failed to show that E.O. is his 12 qualifying child as defined in section 152(c) for the 13 taxable years in issue, and therefore, petitioner is not 14 entitled to the child tax credits in dispute. 15 Earned Income Credit 16 17 Section 32(a)(1) allows an eligible individual an earned income tax credit (EIC). Section 32(c)(1) (A)(i) 18 defines an "eligible individual" as an individual who has 19 a qualifying child for the taxable year. Petitioner 20 offered no evidence that he is an eligible individual 21 under sec. 32(c) (1)(A)(ii). 22 23 24 25 The term "qualifying child" is defined in section 32(c)(3)(A) to mean a qualifying child of the taxpayer (as defined in section 152(c), determined without regard to paragraph (1)(D) thereof and section 152(e)). (973)406-2250|operationseescribertnetlwwwascribers.net t Consistent with the preceding discussion, E.O. was not petitioner's qualifying child as that term is defined in section 152(c). It follows that petitioner is not 10 eligible for an EIC for the years in issue. Head of Household Filing Status Section 1(b) prescribes a relatively favorable tax schedule for a taxpayer who qualifies as a "head of household". Section 2(b) defines a head of household, as relevant herein, as an individual taxpayer who: (1) is unmarried as of the close of the taxable year and is not a surviving spouse; and (2) maintains as his home a household that constitutes for more than one-half of the taxable year the principal place of abode, as a member of such household, of (a) a qualifying child of the individual (as defined in section 152(c), determined 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 without regard to section 152(e)), or (b) any other person 17 who is a dependent of the taxpayer, if the taxpayer is 18 entitled to a deduction for the taxable year for such 19 person under section 151. See Rowe v. Commissioner, 128 20 21 T.C. 13, 16-17 (2007). As previously discussed, E.O. was not 22 petitioner's qualifying child within the meaning of 23 section 152(c) for the years in issue, nor was petitioner 24 entitled to a dependency exemption deduction for the child 25 under section 151. Consequently, petitioner does not ) BEIEI (973)406-2250|operationseestrbersaiet|www.escribers.net qualify for head of household finding status for the years 11 in issue. Consistent with the foregoing, a decision will be entered for respondent. This concludes the Court's oral findings of fact and opinion in this case. (Whereupon, at 2:58 p.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 (9733406-2250|operationspescrbersnet|www.escribers.net