TAX COURT OPINION

Case: George Ray Flanigan
Docket Number: 14996-05S
Judge: Goldberg
Opinion Type: summary
Filed: 01/09/2007
Pages: 6

AADM.__ -- RECORDED szRVIC E I I CAL . I S T AT . S . T . JUDG E T .C . Summary Opinion 2007-5 UNITED STATES TAX COUR T GEORGE RAY FLANIGAN, Petitioner v . COMMISSIONER OF INTERNAL REVENUE, Responden t Docket No . 14996-05S . Filed January 9, 2007 . George Ray Flanigan, pro se . Joseph Ferrick , for respondent . GOLDBERG, Special Trial Judge : This case was heard pursuant to the provisions of section 7463 of the Internal Revenue Code in effect at the time the petition was filed . The decision to be entered is not reviewable by any other court, and this opinion should not be cited as authority . Unless otherwise indicated, subsequent section references are to the Internal Revenue Code i n JAN 0 9 2001- - 3 - family support" to Ms . Flanigan . Specifically, the handwritten court order provided : (1) George shall pay to Margaret, as for unallocated family support until further order of court or either one of them dies, 48% of George's net income, the first payment shall be due on 6-14-01, subject to review and hearing . The issue of retroactivity to be reserved for trial . * * * On or about July 5, 2001, the Circuit Court of Cook County , Illinois, issued a modification to its May 29, 2001, order . The court found petitioner's net income to be approximately $895 .41 per week . Under the modified court order, petitioner wa s required to pay $429 .79 per week as "unallocated support ." Page 2 of the modified court order, however, provides that "[T]he amount of child support cannot be expressed exclusively as a dolla r amount because all or a portion of the obligor's income is uncertain as to source, time of payment, or amount ." The modified order further states that child support payments woul d be paid in an amount equal to 48% of petitioner's net weekly income (or $429 .82) . In addition to the child support payment, petitioner was required to continue to pay medical and dental insurance for Ms . Flanigan and the two children . Petitioner was also required to maintain a $250,000 life insurance policy on himself, with Ms . Flanigan as the beneficiary, at a cost to petitioner of $700 per year . The children, however, were not named as alternate income beneficiaries . - 5 - In an answer filed June 7, 2006, respondent conceded to petitioner's deduction of $22,349 as alimony for the "unallocated family support payments ." However, respondent raised new issues by alleging that petitioner is not entitled to the two claimed dependency exemption deductions and to the child tax credit . I . Burden of Proo f Discussion Generally, the burden of proof is on the taxpayer . Rule 142(a)(1) . Under section 7491, the burden of proof may shift to the Commissioner if the taxpayer produces credible evidence with respect to any factual issue relevant to ascertaining the taxpayer's liability . Sec . 7491(a)(1) . Where the Commissioner raises a new matter or claims an increase in the deficiency, however, the burden of proof remains upon the Commissioner . Rule 142(a)(1) ; Achiro v . Commissioner , 77 T .C . 881, 889-890 (1981) ; Burris v . Commissioner , T .C . Memo . 2001-49 ; Jamerson v . Commissioner , T .C . Memo . 1986-302 . Thus, the burden of proof is on respondent with respect to the new issues raised in the answer filed with the Court (i .e ., the dependency exemption deductions and the child tax credit) . Nonetheless, our findings and ultimate decision in this case are based on a preponderance of the evidence . - 7 - "Custody," for purposes of this section, will be determined by the terms of the most recent decree of divorce or separate maintenance, or subsequent custody decree, or, if none, a written separation agreement . In the event of so-called "split" custody, or if neither a decree or agreement establishes who has custody, * * * "custody" will be deemed to be with the parent who, as between both parents, has the physical custody of the child for the greater portion of the calendar year . [Sec . 1 .152-4(b), Income Tax Regs . ] A custodial parent may release claim to the exemption pursuant to the provisions of section 152(e)(2), which provides : SEC . 152(e) . Support Test in Case of Child o f Divorced Parents, Etc .-- * * * * * * * (2) Exception where custodial parent releases claim to exemption for the year .--A child * * * shall be treated as having received over half of his support during a calendar year from the noncustodial parent if- (A) the custodial parent signs a written declaration (in such manner and form as the Secretary may by regulations prescribe) that such custodial parent will not claim such child as a dependent for any taxable year beginning in such calendar year, and (B) the noncustodial parent attaches such written declaration to the noncustodial parent's return for the taxable yea r beginning during such calendar year . For purposes of this subsection, the term "noncustodial parent" means the parent who is not the custodial parent . The noncustodial parent is allowed a dependency exemption deduction under section 152(e)(2) if, and only if, the custodial parent signs a written declaration that such custodial parent - 9 - such written declaration . Further, the record does not indicate that petitioner obtained a Form 8332 from Ms . Flanigan . At trial, petitioner testified, with respect to Form 8332, that he never signed or obtained such a form . Because petitioner, the noncustodial parent, did not meet the requirements of the Internal Revenue Code, he cannot fall within the exception provided in section 152(e)(2) . Since petitioner fails to meet the requirements of the support test, the Court need not address the other factors . Accordingly, the Court holds that petitioner is not entitled to dependency exemption deductions for his two children for 2003 . III . Child Tax Credi t For 2003, petitioner claimed a child tax credit with respect to his two children in the amount of $1,000 . Respondent asserts that petitioner is not entitled to the child tax credit because all of the unallocated family support payments that petitioner made are alimony and not child support . Petitioner argues that the unallocated family support payments, as well as the expenses for medical and dental insurance for the two children, entitle him to the child tax credit . We disagree . Section 24(a) authorizes a child tax credit with respect to each qualifying child of the taxpayer . The term "qualifying child" is defined in section 24(c) . A "qualifying child" means an individual with respect to whom the taxpayer is allowed a iii 11111 iii~~~uIIIIIIII 704 2890 0000 9293 3785 1ITED STATES TAX COURT WASHINGTON, D.C. 20217-0002 OFFICIAL BUSINESS PENALTY FOR PRIVATE USE , $300 Dkt . th% "OS S A Doc u . ~ 3~~ ailed ~ ~~~ I1t r ila sum elerlr' a ott ic. olcl ~ wi l.b F~ . F'lanigay xt ~ Georg e Apt . 6 :3 Ha,~ver Pk u rc h ftd . . CERTIFIED MAIL