TAX COURT OPINION

Case: Christopher James Brauer
Docket Number: 21000-16S
Judge: Nega
Opinion Type: bench
Filed: 10/27/2017
Pages: 9

JRN UNITED STATES TAX COURT WASHINGTON, DC 20217 CHRISTOPHER JAMES BRAUER, Petitioner, v. ) ) ) ) Docket No. 21000-16S. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ORDER Pursuant to Rule 152(b) of the Tax Court Rules of Practice and Procedure, it is ORDERED that the Clerk of the Court shall transmit to petitioner and to respondent a copy of the pages of the transcript of the proceedings in the above case before Judge Joseph W. Nega at Memphis, Tennessee, on October 3, 2017, 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 petitioner. (Signed) Joseph W. Nega Judge Dated: Washington, D.C. October 27, 2017 SERVED Oct 27 2017 3 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 Bench Opinion by Judge JOSEPH W. NEGA October 3, 2017 CHRISTOPHER JAMES BRAUER V. COMMISSIONER Docket No. 21000-16S The Court has decided to render oral findings of . fact and opinion in this case. The following represents the Court's oral findings of fact and opinion. This Bench Opinion is made pursuant to Section 7459(b) and Rule 152. This case was a small tax case subject to the provisions of section 7463 and Rules 170 through 174. Pursuant to section 7463(b), the decision to be entered is not reviewable by any other court, and this opinion shall not be treated as precedent for any other case. Unless otherwise indicated, all sectión references are to the Internal Revenue Code in effect r6 he year at for issue, and( all rule references are to the Tax Court Rules of Practice and Procedure. The Petitioner Christopher James Brauer appeared pro se. Dustin J. Pitts appeared on behalf of Respondent. By a notice of deficiency dated June 20, 2016, respondent determined a deficiency of $3,242 in petitioner's Federal income tax for 2014. The primary issue in this case is whether the petitioner is entitled to an exemption for his minor child for the year 2014 under section 152(e). This issue also informs our [973)406-2250|operationseescribers.net|www.escnbers.net 4 disposition with respect to whether petitioner is entitled to a related earned income credit under section 32(a), and A a child tax credit under section 24(a). FINDINGS OF FACT This case was tried on October 2, 2017, in Memphis, Tennessee. Petitioner resided in Tennessee when he filed the petition. Petitioner and his ex-wife (custodial parent) divorced in 2012. Pursuant to their divorce, Petitioner and the custodial parent entered into a permanent parenting plan (parenting plan). This parenting plan was an unconditional release wherein the custodial parent agreed, in the absolute, to waive her right to claim a dependency exemption deduction with respect to their minor child, K.D.B.; that petitioner, although he was the noncustodial parent, should instead be eligible to claim the dependency exemption. Petitioner filed a timely income tax return for 2014 (return). The custodial parent, however, refused to provide to Petitioner a Form 8332, Release/Revocation of Release of Claim to Exemption for Child By Custodial Parent (Form 8332). In lieu of the Form 8332 and hoping to .substantiate his claimed entitlement to the dependency exemption, petitioner included with his return a copy of the parenting plan. 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 (973) 405-2250 I operations©escribersmet | www.escribers.n et 5 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 By a notice of deficiency dated June 20, 2016, respondent determined a deficiency in petitioner's 2014 Federal income tax liability of $3,242. The adjustments resulting in the deficiency exclusively arose from respondent disallowing petitioner's claim of a dependency exemption with respect to K.D.B. Petitioner timely filed a petition with this Court, seeking redetermination. Thereafter, petitioner subsequently sought and received a state court order recognizing that the custodial parent breached the parenting plan, ordering her to provide petitioner with a completed Form 8332. On January 11, 2017, the custodial parent complied with the state court order, and provided petitioner with a completed Form 8332 wherein she again unconditionally waived any claim of right to the dependency exemption with respect to K.D.B. Petitioner has previously provided respondent with this Form 8332 and it has been entered into evidence. OPINION A. Section 152(e) Special Rules for Noncustodial Parents. Section 15 (c) permits a taxpayer to claim as a deduction an exemption for each dependent. Section 152(a) provides that a dependent must be either a "qualifying child" or a "qualifying relative" of the taxpayer. A (973)406-2250{operations@escribersaet|wwwæscribersaet 1 qualifying child is a child who, among other things, lived 2 with the taxpayer for more than one-half of the taxable 6 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 year at issue. Sec. 152(c)(1) (B). In the case of divorced parents, however, an otherwise qualifying child that lives with a custodial parent for the greater portion of the calendar year may be treated as the qualifying child of the noncustodial parent when certain criteria are met. Sec. 152(e). In order for a noncustodial parent to claim a dependency exemption in this manner, the custodial parent must sign a written declaration waiving in the absolute his or her entitlement to claim the otherwise qualifying child for the taxable year, and the noncustodial parent must attach such written declaration to his or her return filed for the taxable year. Sec. 152(e) (2) (A)&(B). Generally, an executed Form 8332 included with a return filed by a noncustodial parent satisfies the statutory requirements of section 152(e)(2). But noncustodial parents may also rely on alternative on ()Üdk documents provided it conforms to the statute's CÑld substance. See Boltinghouse v. Commissioner, T.C. Mem Chnd 2003-134. Petitioner was a credible witness. Through the terms of the parenting plan, the custodial parent unconditionally waived any claim of right she may have cdbers (973)406-2250|operations@escrkrs.netjwww.escribersmet 7 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 otherwise had to a dependency r K.D.B. Petitioner included a copy of this waiver with his return for 2014, wherein he claimed a dependency exemption for the child. Upon examination and respondent' s subsequent denial of petitioner's claimed exemption for the want of a Form 8332, petitioner pursued his available legal remedy to secure from the custodial parent the necessary Form 8332 sought by the respondent to substantiate petitioner' s right to claim a dependency deduction for K.D.B. At trial, respondent did not dispute the validity or veracity of the Form 8332. Respondent did not invite our attention to any terms of the parental plan or other documentary evidence indicating the noncustodial spouse's waiver was conditional, and we find none. Respondent did not allege petitioner and the custodial parent I'm corry, ctrike that. Respondent did not lluded to "double-dip" with respect to claiming a dependency r K.D.B. Instead Respondent argues petitione is ineligible to claim a dependency deduction because the Form 8332 was not "attached" to the petitioner' s return as required by an applicable regulation. Petitioner does not dispute the applicability of that regulation, but invites our attention to his inclusion of the parenting plan with his timely filed tax return, and invites us to contemplate (973)406-2250|operations@escribersmet|vmw.escribersnet 8 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 his dogged pursuit of legal remedies against the custodial parent in order to secure the Form 8332 that respondent desired. When pressed by the Court, respondent did not proffer an opinion as to whether petitioner could still properly file an amended return for tax year 2014, "attach" the Form 8332, and again satisfy the requirements by claiming the subject dependency exemption. We observe that petitioner's return was timely filed less than three years ago. We similarly note that the return of the custodial spouse is likely still open to either audit or amendment. The Court is aware of the dicta in Armstrong v. Commissioner, 139 T.C. 468,473(2012 aff'd, 745 F.3d 890 (8th Ci 2014), that explored the contours of what ought to constitute a section 152(e)(2) "attachment." However, because we find the parental plan petitioner included with his return, and the Form 8332 supplied to respondent satisfied the statutory requirements of section 152(e) (2), we need not and do not weigh in on that subject here. Accordingly, we hold that under section 152, petitioner was entitled to claim a dependency exemption for his qualifying child K.D.B. for tax year 2014 B. Earned Income Tax Credit Section 32(a)(1) provides an eligible individual (973)406-2250|operations@escribers.net|wwvcescribersmet 9 1 with an earned income credit against the individual's 2 3 4 5 6 7 8 9 income tax liability, subject to a phase out in section 32(a)(2). Section 32(b) describes different percentages and amounts used to calculate the credit. The limitation amount is based on the taxpayer's earned income and adjusted gross income and whether the taxpayer has any qualifying children. Sec. 32(b),(f). To be eligible for a higher earned income credit with respect to a child, the taxpayer must establish that the child meets the 10 definition of a qualifying child under section 152(c) as 11 modified by 32 (c) (A) , 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Respondent reduced petitioner's earned income credit in light of the respondent's determination that K.D.B. did not constitute petitioner's qualifying child. Respondent did not allege or argue any other grounds for this reduction in petitioner's earned income credit. Because we hold that K.D.B. constitutes petitioner's qualifying child, we similarly hold that the petitioner is entitled to the earned income credit for taxable year 2014 reflecting that determination. See Sec. 32(b). C. Child Tax Credit for 2014. A taxpayer is entitled to a child tax credit for "each qualifying child", as defined in section 152, who has not yet reached the age of 17. Sec. 24(a),(c)(1). Reflective of his determination that petitioner was (973)406-2250|operations@escribers.net|mvw.escribers.net 10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 ineligible to claim K.D.B. as a qualifying child, respondent disallowed Petitioner's claimed child tax credit. Respondent did not allege or argue any other grounds for disallowing petitioner's child tax credit. Given our holding above, petitioner is entitled to the child tax credit for tax year 2014. See Sec. 24(b). .D. Conclusion Accordingly, a decision will be entered for petitioner. This concludes the Court's oral findings of fact and opinion in this case. In reaching our holdings herein, we have considered all arguments made and to the extent not mentioned above, we conclude they are moot, irrelevant, thout merit. (Whereupon, at 11:55 a.m., the above-entitled 15 matter was concluded.) 16 17 18 19 20 21 22 23 24 25 Cribers (9733406-2250|operationseescribersmet|vmwescribersnet