TAX COURT OPINION

Case: Garaad Mohamed Muse & Shukri Jeylani Abdalla
Docket Number: 15191-24S
Judge: Buch
Opinion Type: bench
Filed: 07/14/2025
Pages: 9

United States Tax Court Washington, DC 20217 Docket No. 15191-24S. GARAAD MOHAMED MUSE & SHUKRI JEYLANI ABDALLA, COMMISSIONER OF INTERNAL REVENUE, Petitioner v. 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 with this order to petitioner and respondent a copy of the pages of the transcript of the trial in this case before Judge Ronald L. Buch at St. Paul, Minnesota, 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, a decision will be entered under Rule 155. (Signed) Ronald L. Buch Judge Served 07/14/25 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 Ronald L. Buch June 12, 2025 Garaad Mohamed Muse & Shukri Jeylani Abdalla v. Commissioner of Internal Revenue Docket No. 15191-24S 3 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. The oral findings of fact and opinion are made pursuant to the authority granted by section 7459(b) of the Internal Revenue Code and Tax Court Rule 152. Rule references in this opinion are to the Tax Court Rules of Practice and Procedure, and section references are to the Internal Revenue Code, as in effect at all relevant times. This case was heard pursuant to the provisions of section 7463. Pursuant to section 7463(b), the decision to be entered is not reviewable by any other court, and this Opinion may not be treated as precedent for any other case. Petitioners, Garaad Mohamed Muse and Shukri Jeylani Abdalla, dispute notices of deficiency in which the Commissioner determined deficiencies, accuracy-related penalties, and additions to tax for 2020 and 2021. For 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 4 Mr. Muse, the Commissioner determined a deficiency of $3,169 in his income tax for 2020, and $3,542 for 2021, as well as accuracy-related penalties pursuant to section 6662 of $633.80 for 2020 and $708.40 for 2021. For Ms. Abdalla, the Commissioner determined a deficiency of $5,616 in her income tax for 2020, and $6,508 for 2021, as well as accuracy-related penalties pursuant to section 6662 for both years. Since then, the Commissioner has conceded the penalty under section 6662 as to Ms. Abdalla. The parties have resolved all issues in this case other than the filing status of Mr. Muse and Ms. Abdalla and related issues that might result from a change in their filing status. FINDINGS OF FACT Mr. Muse and Ms. Abdalla resided in Shakopee, Minnesota at the time they filed their petition in this case. During the years at issue, Mr. Muse worked as a tax return preparer with his own firm Garaad Accounting & Tax Services, in addition to other jobs he held. On his tax 2020 return, Mr. Muse identified his occupation as accountant and he identified himself and his accounting practice on the paid preparer line. On Ms. Abdalla's 2020 return, she likewise listed Mr. Muse and his accounting practice on the paid preparer line. Ms. Abdalla also worked, earning wages from Amazon. 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 5 For 2020 and 2021, Mr. Muse and Ms. Abdalla filed separate tax returns claiming head of household filing status. On Ms. Abdalla's 2020 and 2021 returns, she claimed the earned income tax credit. On their 2020 tax returns, Mr. Muse and Ms. Abdalla list different addresses, but Ms. Abdalla's home address shown on her return is the same address shown on both her and Mr. Muse's returns for Mr. Muse's accounting practice. On their 2021 tax returns, Mr. Muse and Ms. Abdalla list the same home address. No one disputes that before 2020, Mr. Muse and Ms. Abdalla were married. They married in Kenya in 1994 in a religious ceremony recognized in Kenya. Before moving to the United States, Mr. Muse and Ms. Abdalla had one child. Ms. Abdalla moved to the United States in 1997, and Mr. Muse moved to the United States in 1998. Since moving here, they have had five more children. They filed joint tax returns beginning in 1999 and until 2020. Mr. Muse and Ms. Abdalla had a ceremonial divorce in 2020. According to Mr. Muse, in their faith tradition, a ceremonial divorce occurs when the couple states their intent to separate in the presence of at least two witnesses. Because of what appeared to be irreconcilable differences, they declared that intent before two witnesses in 2020. Mr. Muse and Ms. Abdalla 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 6 did not obtain a Decree of Dissolution of Marriage from any Minnesota court. Two years later, Mr. Muse and Ms. Abdalla were able to reconcile their differences, and they declared their intention to reunite in marriage. It is unclear whether Mr. Muse and Ms. Abdalla lived apart during their period of ceremonial divorce. Most contemporaneous records show them sharing the same address as before the ceremonial divorce. But both testified that they resided separately. During that time, Mr. Muse financially supported his elderly father, his wife, and their children, who lived with Ms. Abdalla. Ms. Abdalla also supported their children, as did the older children who worked and contributed to supporting the family. The Commissioner mailed a notice of deficiency to Ms. Abdalla on June 28, 2024, and a separate notice of deficiency to Mr. Muse on July 1, 2024. The notices of deficiency determined Mr. Muse and Ms. Abdalla's filing status to married filing separately, made other adjustments that are no longer in dispute, and imposed accuracy-related penalties. I. Filing Status OPINION An individual may file a tax return as head of a household if, and only if, that individual is not married 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 7 at the close of the taxable year, is not a surviving spouse (as defined in I.R.C. § 2(a)), and, generally, maintains a household where a qualifying child or parent of the individual is a member. I.R.C. § 2(b)(1). Treasury Regulation § 301.7701-18(b)(1) provides that a marriage of two individuals is recognized for federal tax purposes if the marriage is recognized by the state, possession, or territory of the United States in which the marriage is entered into. In the case of a foreign marriage, it is recognized as a marriage for federal tax purposes if it would be recognized as marriage under the laws of at least one state, possession, or territory of the United States. Treas. Reg. § 301.7701-18(b)(2). The Minnesota Supreme Court has held, "The validity of a marriage normally is determined by the law of the place where the marriage is contracted. If valid by that law the marriage is valid everywhere unless it violates a strong public policy of the domicile of the parties." In re Kinkead's Estate, 57 N.W.2d 628, 631 (1953). See also MN ST § 517.20, providing that marriages contracted outside the State of Minnesota are valid in the state if they were valid by the laws of the place where the marriage was contracted. In this case, no one disputes that Mr. Muse and Ms. Abdalla were validly married in Kenya and remained married until 2020. 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 8 We have consistently held that for the purpose of Federal income tax the determination of marital status of the parties must be made in accordance with the law of state of their domicile. Boyter v. Commissioner, 74 T.C. 989, 994 (1980); Steffke's Estate v. Commissioner, 64 T.C. 530 (1975) ("Marriage, its existence and dissolution, is particularly within the providence of the States."). Mr. Muse and Ms. Abdalla were domiciled in Minnesota during the year they ceremonially divorced, thus we must look to Minnesota law. Under Minnesota law, no divorce may be granted except on grounds prescribed by statute. Gerber v. Gerber, 64 N.W.2d 779, 781 (1954). Minnesota law does not recognize religious or ceremonial divorces. Rather, parties must obtain a decree of dissolution of marriage for a divorce to have legal effect. MN ST § 518.06. As residents of the state of Minnesota in 2020 and 2021, Mr. Muse and Ms. Abdalla were required to obtain a decree of dissolution for their divorce to have legal effect. Thus, in the eyes of the state of Minnesota, Mr. Muse and Ms. Abdalla were married. And because we look to state law to determine marital status, they were likewise married for Federal income tax purposes. As married individuals, they may not claim head of household as a filing status. I.R.C. § 2(b). Further, the earned income tax credit is not available to taxpayers who claim the 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 9 married filing separately status. I.R.C. § 32(d)(1). All other adjustments are computational. II. Penalties The section 6662 accuracy-related penalty for negligence includes any failure to make a reasonable attempt to comply with tax laws, including any careless, reckless, or intentional disregard, unless the taxpayer acted with reasonable cause and in good faith. See I.R.C. §§ 6662(c), 6664(c). The determination of whether a taxpayer acted with reasonable cause and in good faith is made on a case-by-case basis, taking into account all pertinent facts and circumstances. Treas. Reg. § 1.6664-4(b)(1). Circumstances that might indicate reasonable cause and good faith include an honest misunderstanding of fact or law that is reasonable in light of all of the facts and circumstances, including experience of the taxpayer. Id. In a stipulation of facts entered into by the parties, it is established that the Commissioner satisfied the supervisory approval requirements of section 6751(b). At trial, the Commissioner conceded that the penalty does not apply to Ms. Abdalla. What is left to decide is whether the penalty applies to Mr. Muse. Mr. Muse married Ms. Abdallah in Kenya in manner accepted by both his religion and that country. In the 10 eyes of Kenya, Minnesota, and the Federal government, this was a valid marriage. Following those same customs and practices, Mr. Muse and Ms. Abdalla ceremonially divorced. While not a valid dissolution of marriage in the state of Minnesota, Mr. Muse was nevertheless reasonable in his belief that he obtained a valid divorce. In his experience, following the traditions of his religion with respect to marriage was respected in the eyes of the law. We find that he acted with good faith and reasonably believed performing a ceremonial divorce would satisfy the requirements of divorce in Minnesota. III. Conclusion For federal tax purposes, Mr. Muse and Ms. Abdalla were married for 2020 and 2021, and they may not claim head of household filing status. Accuracy-related penalties, however, do not apply. Because all other adjustments are computational as a result of concessions by the parties, decision will be entered under Rule 155. This concludes the Court's oral findings of fact and opinion in this case. (Whereupon, at 9:17 a.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