TAX COURT OPINION

Case: Ron J. Waterman
Docket Number: 7435-07S
Judge: Colvin
Opinion Type: bench
Filed: 12/17/2008
Pages: 7

Ski' 5- <rvr UNITED STATES TAX COURT WASHINGTON, D .C . 2021 7 RON J . WATERMAN, Petitioner , V . COMMISSIONER OF INTERNAL REVENUE , Respondent . Docket No . 7435-07 S O R D E R Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it i s 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 of the above case before Judge Diane L . Kroupa at Seattle, Washington on October 28, 2008, containing her oral findings of fact and opinion rendered at the conclusion of trial . In accordance with the oral findings of fact and opinion, decision will be entered under Rule 155 . (Signed) Diane L . Kroupa Judge Dated : Washington, D .C . December 17, 2008 SERVED DEC 17 2008 3 1 Bench Opinion by Judge Diane L . Kroupa 2 Ron J . Waterman v . Commissione r 3 Docket No . 7435-07S October 28, 200 8 4 THE COURT : The Court has decided to render 5 oral findings of fact and opinion in this case and the 6 following represents the Court's oral findings of fact 7 and opinion . These oral findings of fact and opinion 8 shall not be relied upon as precedent in any othe r 9 case . 10 This proceeding was heard as a small ta x 11 case pursuant to the provisions of section 7463 of th e 12 Internal Revenue Codekas amended, and Rules 17 0 of t q&, 13 through 175 of the Tax Court Rules of Practice an d 14 Procedure . All section references are to the Internal 15 Revenue Code for the year 2005, the year at issue, and 16 all Rule references are to the Tax Court Rules o f 17 Practice and Procedure . 18 This bench opinion is made pursuant to the 19 authority granted by section 7459(b) and Rule 152 . 20 Petitioner is incarcerated and was unable to 21 attend the hearing . The Court treated Petitioner' s 22 response to respondent's motion for summary judgment 23 as a Rule 50(c) statement . Shawn L . Barrett appeared 24 on behalf on respondent . 25 Heritage Reporting Corporation (202) 628-4888 4 1 FINDINGS OF FACT 2 The record reflects or the parties do not 3 dispute the following : 4 Petitioner resided in Washington at the time 5 he filed the petition in this case . 6 Petitioner was previously married and had 7 three children of that marriage, consisting of two 8 sons : RYW and SW and a daughter, AW . Petitione r 9 divorced from his first wife and entered into a 10 Separation Agreement dated June 16, 1999 . Pursuant to 11 the separation agreement, Petitioner was required to 12 pay child support for the three children, the ex-wife 13 would have sole physical custody of the thre e 14 children, and Petitioner was entitled to claim the 15 three children as dependents for Federal income tax 16 purposes . 17 During 2005 several things occurred . First, 18 Petitioner had the children 170 days and they were in 19 camp for three additional weeks . In addition , 20 Petitioner married a female through a Russian Mai l 21 Order Bride Organization . The Russian bride had a son 22 through a previous relationship . Petitioner and the 23 Russian bride remarried in 2006 to comply with certain 24 immigration requirements . 25 Petitioner filed a Federal income tax return Heritage Reporting Corporatio n (202) 628-4888 5 1 for 2005 married filing jointly with his Russia n 2 bride, claiming his three biological children and his 3 Russian wife's son as dependents . He did not attach a 4 Form 8332, entitled Release of Claim to Exemption for 5 Child of Divorced or Separated Parents, regarding the 6 three biological children but he did attach relevan t 7 portions of the separation agreement . Petitioner did 8 not include the Social Security number of the Russian 9 bride's son because no number had been assigned t o 10 him . 11 Petitioner's ex-spouse submitted a Form 8332 12 as of May 1, 2007 but for only two of the biological 13 children, not three . This Form 8332 was not in time 14 for the return filed for 2005 . 15 Respondent issued a deficiency notice to 16 Petitioner determining a $3,000 deficienc y 17 attributable to disallowing a dependency exemption for 18 the Russian wife's son because of no Social Security 19 number . Respondent also disallowed Petitioner' s 20 entitlement to a child tax credit . Respondent did not 21 challenge, however, Petitioner's claiming his thre e 22 biological children for the dependency exemption but 23 did challenge whether Petitioner was entitled to the 24 child tax credit for any of the children . Because the 25 child tax credit is tied to having a qualifyin g Heritage Reporting Corporation (202) 628-4888 6 1 dependent for exemption purposes, respondent admits 2 that he should have disallowed the dependenc y 3 exemption for Petitioner's three biological children . 4 Respondent nonetheless does not seek a highe r 5 deficiency by disallowing the dependency exemption for 6 Petitioner's three biological children . W e 7 accordingly will not adjust the three dependency 8 exemptions that respondent allowed for Petitioner' s 9 three biological children . 0 IPLNS0 N 10 We first address the dependency exemptions . 11 As noted previously, respondent does not contes t 12 Petitioner claiming his three biological children as 13 dependents . The parties agree that no exemption i s 14 allowed for an individual, such as the Russian bride's 15 son, who did not have a Social Security number at the 16 time Petitioner filed the return for 2005 . Sec . 17 152(e) . Petitioner now concedes that he was not 18 entitled to claim the Russian wife ' s son as a 19 dependent in 2005 . We agree . 20 Because of respondent' s concession as to the 21 biological children, we need not address whethe r 22 Petitioner satisfied the requirements for a non- 23 custodial parent to claim children as dependents . 24 We next address the child tax credit an d 25 additional child tax credit . Section 24( a) authorizes Heritage Reporting Corporatio n (202) 628-4888 7 1 a child tax credit with respect to each "qualifying 2 child" of the taxpayer . Section 24(d) authorizes a n 3 additional child tax credit for families with three or 4 more "qualifying" children . The term "qualifying 5 child" is defined in section 24(c) . As relevant here, 6 a "qualifying child" means an individual with respect 7 to whom the taxpayer is allowed to claim as a 8 dependent under section 152 . Sec . 24(c)(1)(A) . 9 We have pointed out that respondent does not 10 contest that Petitioner is entitled to claim a 11 dependency exemption for his three biologica l 12 children . Accordingly, the three biological'children 13 are a "qualifying child" within the meaning of section 14 24(c) . It follows, therefore, that Petitioner i s 15 entitled to a child tax credit under section 24(a) and 16 an additional child tax credit under section 24(d ) 17 regarding the three biological children . We note that 18 only the tax year 2005 is before the Court . We might 19 well have ruled otherwise had respondent challenged 20 the dependency exemption for the three biologica l 21 children . 22 To reflect the foregoing and concessions of 23- the parties, a decision will be entered under Rul e 24 155 . In addition, an appropriate order will be issued 25 denying respondent's motion for summary judgment, Heritage Reporting Corporatio n (202) 628-4888 8 1 filed September 24, 2008, as moot . 2 This concludes the Court's oral findings of 3 fact and opinion in this case . 4 (Whereupon, at 1 :24 p .m ., the bench opinion 5 in the above-entitled matter was concluded . ) 6 7 8 9 10 11 // 1 2 13 14 15 16 / / 17 18 19 / / 20 // 21 // 2 2 23 // 2 4 25 Heritage Reporting Corporation (202) 628-4888