TAX COURT OPINION

Case: Joy Webb
Docket Number: 19128-09
Judge: Chiechi
Opinion Type: memo
Filed: 06/06/2011
Pages: 16

T.C. Me o 2011-124 UNITÉD STATES TAX COURT ÓŸ WEBB, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent Docket No. :.9]:28-09. Filed June 6, 2011. Joy Webb, pro se . Courtney S. Bacon, for respondent. MEMORANDUM FINDINGS OF FACT AND OPINION CHIECHI, Juó.ge: Respondent determined a deficiency of $2,401 in pet li.ticne 's Federal income tax (tax) for her taxable year 2008. SE8VED JUN -6 2011 The issues for decision for petitioner' s taxable year 2008 -2- are: (1) Does petitioner have gross receipts and net profit of $10,400 from a trade or business? We hold that she does not. (2) Is petitioner entitled to a dependency exemption deduc- tion under section 151(a)2 for each of her- two grandchildren, Nina 'Moore and Kyle Moore? We hold that she - is not . (3) Is petitioner entitled to head of household filing status under sec t ion 2 (b) ? :We hold that she is - not . (4) Is petitioner sentitled to the cearned income tax credit under section 32 (a) ? We hold that she is not . FINDINGS OF FACT Some of the facts have been, stipulated and are so foùnd. At the time petitioners filed the petition, she re.sided in Union City, Georgia (Union City) which is in Fulton County, Georgia (Fulton County) . Certain other issues arise from certain other determina- tions of respondent tioner for her taxable year 2008. Resolution of tihose issues flows automatically from our rešolution of certain issues addressed herein. in the notice of deficiency issued to peti- 2All section references are to the Internal Revenue Code in effect for the year at Court Rules of Practice and Procedure. iss(e. All Rule references are to the Tax 3We take judicial notice that Union City is in Fu-lton County. e-3- Petitiorier is the maternal grandmother öf iNina Moore, wlio was born'on October 11, 198'/ and:Kyle Moore, who was born on July , 1991-. Petitioner's;daughter, Deana Moore (Ms. Moore). is the mothèr of Nila Moore and "Kyle Moore. ,At alla relevant times, Ms. -Mooi-ë reside at 460 Rivers Roadi Fayetteville; Georgia - (Fayetteville) hich is in Fayette County Georgia (Fayette Countý) . 4 During 2008 Nina .Móore twäs enfalled at ValdostasState University where she? started matriculáting in -the fall of 2006. A transcript 'wit tesj5ect td Nina Moóre that Valdosta -University issued on March 24, 2009, showed- her address as 460 -Rivers Road, Fayetteville; wh cÝi was thã residence of her mother, "Ms. Moore. JDür'ing 2008 Kyle «Mooi-e was- enrolled as a, senior at Sandy Creek' High Schoo int Fayette County, where, he started matriculat- iritjlin the falilt of 2005. A transcript with respect to Kyle Moore thåt Sandy Creek High Sähool issued ón October 3, -2008 did-not show his raddres s At no relevant ime did petitioner niaihtain a checking account or document any money that she. may have received or, expended. On dates not disclosed abye the record petitioner provided certain babysitt:.ng services for certains children of twooindivid- 4We take judicidl notice that Fayetteville is in Fayette County. -4- uals, which at times includen providing food. In exchange for those babysitting services, petitionér received -certain house- keeping services from one of those individuals and a small amount of cash from the other. At no time did petitioner include»the value of those housekeeping services ,or that small amount otcash in income in. a tax return that she filed. Petitioner filed Form 1040, U.S. Individual Income/Tax Return, for her taxable 'year 2008 (2008 return) . In that return, petitioner reported taxable gint-erest of $820 and taxable pensions añd annuities, of ,$3, 631. Iri Schedule C-EZ, Net- Profit From, Business (Schedule C) ; that petitioner included with her 2008 2 return, petitioner described her 2claimed busiriess as "CHILDCARE" and claimed gross receipts ðf «$10, 400, sno expenses; 'and net profit of $10;400., In her 2008 return, petitioner also claimed (1) dependency exemption deductions for her grandchildren, Nina Moore and Kyle Moore, (2) head of household filing status, and (3) the earned income tax credit with respect .T to those grarídchil- dren. In Schedule EIC, Earned Income Credit, that petitioners included with, her 2008 return, petitioner claimed that during, 2008 both Nina Moore and Kyle Moore lived with her for 12 months. However; petitioner indicated, inconsistently, on page 1 of her 2008 return, on which she s owed Nina Moore and Kyle Moore orE line 6c as her dependents, that during 2008 neither of those grandchildren lived with her. -5- Respondent issued to þetitioner a notice of deficiency (notice) for her taxable year 2008 In that notice, respondent, inte alia, dete emiñed that petitioner has no Schedule C gross < receipts ortnet 2rofit. Respondent salso determined in the notice that-petitionerMs notr entitled to (1) dependency exemption deductions for N Ena Moore and Kyle Moore, (2) head of household f iling status and (3 )N the earned aïncome tax credit . OPINION Petitioner has the burden of establishing that the determi- nations in theenotice are wrong. See Rule 142(a); Welichsv. Helvering, =290 EU St 111 115 n(1933) . In- supòòrt f/her position withyrespect toteach-of the issues presented in this case, Apetitioner relies primarily on her own testimony an on the testimony of her daughter Ms . Moore . We found the testimony of petitioner to be in certain material respects tonclusury, general,mrague uncorroborated,sand self- serving. We found the testimony of Ms. Moore to be in certain materials 'respects conclusory, vague uncorroborated, and serving the interests of petitioner, her mother. We are»not required to, and we shall not rely on the respective testimonies of peti- tioner and her daughter, Ms . Moore, in order to establish peti- tioner' s positior .with respect to . each of the issues presented. ee, .g. Í'okarski . CotämŠssi ner, 8T t.C. 74, 77 (1986) . Schedule C Gross Receipts. and Net Profit - Petitioner claims~ that curin 2008 Ms. Mooré,Thee dàuc.jhter, paid her $200 a week to "watch"' certain ofyMes .Moore's chiidren. The only evidence that petitioner presenteddin support of thats claim is the respective testimonies of herself and Ms Moore, on which we are unwilling to rely, and a letter writ-ten by Ms Moore that stated: ."This is a letter stating thàt I -pay $200 a week to Joy Webb [petitioner) to watch my children. She has been watch- ing them f or - years . " «On the record before ,us, we reject petitioner's claim that during 2008 Ms. Moore paid her $200 a -week to "watch" certain of Ms. Moorë's childten. Even if we accepted .that claim, petitioner has failed tot carry*her burden of establishing that forsher taxable year 2008 she wäs in the trade or business of (1) "watching" oertain of M . Moore' s children, (2) babysitting - any other children, or (3) performing any other child care activities. Based upon moue exainination of the entire record before us, we find that þetitioner hast failed to scarry her burden of estab- sWe do not know what petiitioner and sMs . Moore ir tended when they sused the word "watch" her testimony that she paid petiltiionee $200 a week to ßabysit two of her children, petitioner claims on brief that her daughter, Ms. Moore, paid her $200 a eek-to-"to do various things such as baby-sit, clean house Although Ms. Moore claimed during run errands and cook." lishing that for her taxable year 2008 she has Sdhedule C gross -7- receipts and net profit of $10,400. Dependenáy Éxemp;ion Deductions> Section 151(a) provides that "the exemptions provided by this section shallabe allòwed as deductions" to a taxpayer. Section 151(c) p::ovides an exemption for each dependent of the taxpayer as defined in section 152. Section 152 :a) defines the term "dependent" to mean either a qualifying child or a güalifyingsrelative.a~ Section 152 c) defines the te'rm "quàlifying child" as follows: SEC. 152. DEPENDENT DEFINED. (c) Que.lifying Child --For purposes of this section-- (3) In general.--The term "qualifying child" means, with respect able year, an individual-- to any taxpayer for -any tax- (A) who bears a relationship to the taxpayer described in paragraph (2), (B) who has the same pbincipal place of atode as the taxpayer for more than one-half of such taxable year, (C) who meets the age requirements of pa ragraph - (3) , and (D) whos hast not provided over one-half of such individual's own support for the calendar year in which the taxable year of the taxpayer begins . -8- As pertinent here, for purposes of section 152 (c) (1) (A) an individual bears a relationship to the -taxpayer "if that.individ- ual is a grandchild of the tiaxpayer. -See sec. 152(c) (2) (A) . As pertinent here, for purposes' of section 152(c) (1) (C) an individ- ual meets the age requirements if that individual - is (1) under age .19 as of ,the eclose of the calendar year in which the tax- payer's taxable year begins,2 see sec. 152(c) (3) (A) (i), or (2) a student,- as defined in sectOn 152 (f) (2)-, who is not. 24 years old as of the close of that calendar year, see sec. 152(c) (3) (A) (ii) . Section 152 (d)- defines the term:"qualifying relative" as follows: SEC. 152. DEPENDENT DEFINED. (d) Qualifying Relative.--For purposes of.this .section-- (1) In general.--The term "qualifying rela- tive" means, with respect -to any'taxpayer .for any taxable year, an individual-- (A) who bears a relationship to the taxpayer, described in paragraph (2) , . (B) whose gross income for the calendar year in which such taxable year begins is less than the exemption amount section 151(d)), (as defined in (C) withsrespect to whom the taxpayer the individual' s provides over one-half of support for the calendar year in which such taxable year-begins, and. • (D) who is not a qualifying child of such taxyayer or of any otiher taxpayer for any taxable (yeaž béginning in the calendar -year in which such ;taxable year begins . As Í>er'tinent here, ifor purposes of section ]±52 (d) (1) (A) an individual bears a relationship to the taapayer -if that individ- uals is a grandchild of the itaxpayer, see sec . 152 (d) (2) (A) , or .is "An individual * * * who, afor*the - taxable year of the taxpayer, has the same pri:lcipai place of abode as the taxpayer and is a member ôË the ta:<payer' s -household",, esee secd 152 (d) (2) (H) . The disi>dt-es between thé parties as to twhether petitioner is erititled to a dependency exemption deduction for each of .her grandchildren, Nina Moore and Kyle Moore, for petitioner'as taxable year 200W'includeathe following: or (1) Did Nina Moore and K le Moore eachahave the same princi- þal'plaäe of abode* as petitioner, for more than oneshalf of þétitioner's taxnble year 2008 -astrequired for each of them to satisfy t he definltion of a dependent in section 152 (a) (1-) as a quali fying child under sect ion 152 (c ) ? Sees sec . 152 (c-) (1) (B)-. (2) D d petitioner "provide for 2008 more: than one-halfs of , tile total supporÍ: of" each of her grandchileiren, Nina Moore and Kyle Moor'e, ah rlüguired fož each of them to,satisfy the defini- tion of a dependent in section"152 (a) (2)-as .a qualifying relative under section 7155(d) ?a Seensec . 3152 (d)t(1) (C) We turn to tihes f irsts question* set forth above . We . find no re]iiable 'e'vidence 'in the record that Nina Moore or Kyle Moore résided nith pétitfaner during any poitiòn of- 2008. On the record before us we find that petitioner has failed to -carrysher -102 burden of establishing that she and Nina Moore- and she and Kyle Moore had the same principal place of abode at any time during that year, let alone for mo: e than one-half of :that year. See. sec. 152(c) (1) (B) . On 2that record, we find that petit oner has failed to carry her burden cf establishing -that for herstaxable year 2008 each of her grandchildren, Nina Moore and Kyle Moore, is her qualifying child, as defined in section 152(c), and that therefore each of them is her dependent, as defined in section 152 (a) (1) . We turn now to the sec nd question stated above; namely, whether petitioner provided for 2008" more than one-half of the total support of each of her -grandchildren, Nina Moore and Kyle Moore . - In orders to p ove thats she did pet itioner must- establish (1) thertotal amount of supbort from all sources provided during 2008 to each of those grandchildren and (2) that petitioner provided during that year' over àne-half of that. total amount for each grandchild. See Archee v. Commissioner, 73 T.C. 96 967 (1980) ; Blanco v. 'Commissio ier, 56 T.C. 512, 514-515 (1971) ; sec. 1.152-1(a) (2) (i) , Income Tax Regs. The term "support" includes food, shelter, clothing, medical and dental care, education, and the like. Sec. 1.152-1(a) (2) (i), Income Tax Regs. The totan amount of support for each claimed dependent" provided by all é ources during the' year in question must be shown by competent evidence. Blanco v. Commissioner, -11- supra at 514 Waere the total amount of ~support provided -to a child during the Tyearsin qùestion is not shown and may not reasonably be inferred "from cdmpetent evidence, it is not possi- ble to find' that the taxpayer contributed more than one-half of that child's total support. Id. at 514-515; Fitzner v;. Commis- sioner, 31 T. C. :.252, 1255 (1959) . « - - We find-no reliable levidence in the record establishing (1): the total amount ofíany*aupport that petitioner provided dür'ing 32008 to each of hér grandchildren Nina Moore, and Kyle Moore, and~ (2) the' total amountlof ~ support "from all sources p ovided during t:hat year to each of Ethem:n Nor did petitioner þroffer anyaevidence from which the Cöurt might infer-the. total amoünt of sußport: from all" sòurces proVi'ded4during 2008 to each of "her grandchildfen, Nina Moore and Kyle Moore i On the record befóbé us; we find that petitïoner hasa failed to carry her burden of establishi'ñg t hat for 2008 she providedemore ethan one-half of the total support of Nina Moore and one-half of ' the .total support of "Kyle Moore . Cn that recórd a we ~ fúrther " f ind, that petitioner has failed to catry her -burden of establishing that for her taxable year 2008 each of her grandchitldren, Nina Moore and Kyle Moore,a is"her qualifying rel'at ive, aâl defined in section 152 (d) , see sec.' 152(d)/(1) (C), and that therefore .each of them is her dependent, as defined in section 152 (a) (2) . 12- Based upon our examination of the entire record before us, we find that petitioner ha failèd to carry -her burden of estab- lishing that she is ehtitled foreher taxable year 2008 to depend- ency exemption- deductions uñder section 151(a) for her grandchile dren Nina Moore and Kyle Moore . Head of Household Filing Status Section 1(b) -provides a special taxarate for an individual who qualifies'as a head of dousehold. As pertinent here, section 2 (b) (1) provides that an unmarried indiiidual "shall - be cohsid- ered a head of a household" if that individual "maintains as his home a householcn which cons itutes fcir more than one half of such, taxable eyear the principal place of abode" of 'a cjualifying child of the individual (as defined in section 152(c) * * *)", sec. 2 (b)3(1) (A) (i) , or "any the person who, is a dependent r of the tax]Šaye if the taxpayer i entitled to a deduction for the taxable year for such: person under section 151, " sec. 2 (b) (1) (A)-(ii) . We have found that penitioner,has, failed to scarry her burden of - establishing that she and Nina Moore and -she .and Kyle Moore had tihe same principal place of abode -at any time during 2008, . let alone for more than one-half of thate year. We have also found that petitioner has failed to darry her burden of estab- MSec . 2 (b) ( ) (A) (i) contains two limitations thati deny head of household filing statàs%here the taxpayer has a qualifying child. Neither of those limitations is applicable in this case. -13- lishing that for her taxable year 2008 (1) each of sher grand- children, Nina M ore and Kyle Moore, is her qualifying child, as defined :ba section 152(c), or her qualifying relative, as defined in section 151(di , and (2) shesis entitled to a dependency exemption deduction for each of them. Based upon anne examination of the entire record before us, we find that petationer has failed to carry her burden of estab- lishing that she is entitled for heretaxable year 2008 to head of household filing status under section 2 (b) . Earned Income TaÅ Credit Section 32(a) (1) permits an eligible individual as a credit against tax for t he taxable year an amount equal to the credit - percentage of so much of the taxpayer's earned income for -the yeareas does not exceed the earned income amount. We turn first to whether for her taxable year 2008 peti- tioner is an elicible individual for purposes of the earned income tax credit provided in section 32(a) (1). As pertinent here, section 32(c) (1) (A) (i) defines the term 'eligible individ- ual" to meant"any individual who has a qualifying child for the taxable year". Sec. 32(c) (1) (A) (i)." As pertinent here, section 32(c) (3) (A) defires the term "qualifying child" to mean "a 7The amount of the credit is determined according to. percentages that vary depending on whether the taxpayer has one qualifying child, qualifying children. a limitation based on adjusted gross income . two or more qualifying children, or no Sec . 32 (a) (2) . Sec. 32(b). The credit is also subject;to qualifying child of the taxpayer (as defined in section 152(c) -14- * * *)" Wé have found that petitioner has failed to carry her burden of establishing that for her taxable year 2008 each of her grandchildren, Nina Moore arid Kyle Moore, is a qualifying child, as defined in section 152(c) On the record before us, we find that petitioner has failed to carry her burden of establïshing that for her taxable year 2008 each of them is a qualifying child, as defined in section 32 (c) (3) (A) . On that record, we further find that petitiorež has failed to carry her burden of establishing that for her taxable year 2008 she is an eligible individual, as defined in section' 32 (c) (1) (A) (i) .* We turn now to whether for her taxable year 2008 petitioner has- earned income for purposes òf the earned income tai credit provided by section 32 (a)- (1) . As pertirient here, ssection 32 (c) (2) (A) defines the term "earned income" as follows: (2) Earned income . - - (A) The term "earned ináome" means - - tips, and other employee compensation, but only if such amounts are includ- (i) wages, salaries, the record is devoid of evidence -establishing peti- "Petitioner does not claïm t hat she is an eligible individEven if she made that ual, as defined in sec. 32(c) (1) (A) (ii). claim, tioner's age before the end of 2008. As a result, petitiòner has failed to carry her burden ;of establishing that she satisfies the age requirements of sec . 32 (c) (1) (A) (ii) (II) , which she must satisfy, among other rediuirements, in order to qualify as an eligible individual, as defined in sec. 32(c) (1) (A) (ii). 15- ible i gross income for the staxable year, plus ( i) the amoùnt of the taxp'ayer' s net earn- the meaning of section 1402 (a) ) ings f om selfiemployment for the taxable year (withi net ea nings shall be determined with regard to the de uction allowed to the taxpayer by section 164 (f) , but such Section 32 (c) (2) B) provides that for purposes, of section 32 (c) (2) (A) the t erm "earned income" does not include amounts received as a per sion or-an annuity. We have fou d that petitioner has failed to carry her burden of establishing t hat for her taxable year 2008 she has Schedule C gross receipts a d net profit of $10-,400. The only other income that petitioner eported i'n her 2008 return was taxable interest of $820 and taxa le pensions and annuities of $3, 631. On the record before us we find that.petitioner has failed to .carry her burden of establ shing that for her taxable year 2008 she has earned income, a defined in section 32 (c) (2) . Based upon ur examination of the entire record before us, we find that pet tioner has failed to cariy her burden of estaba lishing that she is entitled for her taxable year 2008 to the earned income ta credit under section 32 (a) . We have cons dered all of petitioner' s contentions and arguments that a e not distusåed herein, and we f ind them to be without merit, i relevant, and/or moot. I . % To reflect the foregoing -16 È Decision will be entered or respondent È y · · . ,s. Í L t · é 4 pi. . 4 T t u G t a T St