Court Opinion

ID: 6345002
Source: CourtListenerOpinion
Date Created: 2022-05-27 17:01:42.330842+00
Date Added: 2024-06-11T09:06:56.670210
License: Public Domain

United States Tax Court
Docket No.: 13891-20                                                                  Page 1 of 1

                                     Washington, DC 20217

  DAMON L. CAMPBELL,
               Pet it ioner
               v.                                Docket No. 13891-20

  COMMISSIONER OF INTERNAL
  REVENUE,
               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 herewith to petitioner
  and to respondent a copy of the pages of the transcript of the trial in the above case
  before Judge Albert G. Lauber at New York, New York, con­t aining his oral findings of
  fact and opinion rendered on April 12, 2022, during the trial session at which the case
  was heard.

        In accordance with the oral findings of fact and opinion, decision will be entered
  in due course.

                                (Signed) Albert G. Lauber
                                          Judge

                                      Served 05/27/22
                                                                  3
1    Bench Opinion by Judge Albert G. Lauber

2    April 12, 2022

3    Damon L. Campbell v. Commissioner

4    Docket No. 13591-20

5                THE COURT:   The Court has decided to render the

6    following as its oral findings of fact and opinion in this

7    case.   This bench opinion is made pursuant to the

8    authority granted by section 7459(b) of the Internal

9    Revenue Code and Tax Court Rule 152, and it shall not be

10   relied upon as precedent in any other case.    Rule

11   references in this opinion are to the Tax Court Rules of

12   Practice and Procedure, and statutory references are to

13   the Internal Revenue Code, as amended and in effect at all

14   relevant times.   We round all monetary amounts to the

15   nearest dollar.

16               This case involves petitioner's 2018 tax year.

17   On September 21, 2020, the Internal Revenue Service (IRS

18   or respondent) issued petitioner a timely notice of

19   deficiency determining a deficiency of $5,682 and an

20   accuracy-related penalty of $1,136.    The IRS subsequently

21   conceded the penalty.    Thus, only the deficiency remains

22   in issue.

23               The question for decision is whether petitioner

24   for 2018 was entitled to claim two minor children as

25   "qualifying children" within the meaning of section
                                                                    4
1    152(c).     His ability to claim his children as qualifying

2    children determines the outcome of all the remaining

3    issues.     We tried this case on April 11, 2022, in New

4    York, New York.

5                            FINDINGS OF FACT

6                 The following facts are drawn from the

7    pleadings, a joint stipulation of facts, and the documents

8    and testimony admitted into evidence at trial. Petitioner

9    resided in Jersey City, New Jersey, when he filed the

10   petition.

11                Petitioner and his wife, Precious Scott, married

12   in 2011.     They have two children, D.C. and J.C., and

13   petitioner has one stepdaughter, A.C.      (We refer to minor

14   children by their initials.)      In 2018 petitioner and his

15   wife separated.     Since then,   D.C., J.C., and A.C. have

16   lived at all relevant times with Ms. Scott in Brooklyn,

17   New York, where they attend public school.      There is no

18   separation agreement in place.

19                Petitioner timely filed a Federal income tax

20   return for 2018.     On this return he claimed head-of-

21   household filing status, which resulted in his claiming a

22   standard deduction of $18,000.      In 2018 the standard

23   deduction was $18,000 for heads of households and $12,000

24   for single filers.     He claimed D.C. and A.C. as qualifying

25   dependents, which generated an earned income tax credit of
                                                                    5
1    $880 and an additional child tax credit of $1,437.

2                 The IRS selected petitioner's 2018 return for

3    examination and determined that he had failed to establish

4    that his minor children were qualifying children.        The IRS

5    accordingly determined that he was not entitled to head-

6    of-household filing status, the earned income tax credit,

7    or the additional child tax credit.      The IRS reduced his

8    standard deduction from $18,000 to $12,000 and disallowed

9    the two credits.     These adjustments generated the $5,682

10   deficiency at issue.

11                               OPINION

12                The IRS's determinations in a notice of

13   deficiency are generally presumed correct, and the

14   taxpayer bears the burden of proving them erroneous.        Rule

15   142(a).   Deductions and credits are a matter of

16   legislative grace, and the taxpayer bears the burden of

17   proving his entitlement to deductions and credits allowed

18   by the Code.     INDOPCO, Inc. v. Commissioner, 503 U.S. 79,

19   84 (1992).     Petitioner does not contend that the burden of

20   proof should shift to respondent      under section 7491.

21   Petitioner therefore bears the burden of proof on all

22   factual issues.

23                On his Federal income tax return for 2018

24   petitioner claimed head-of-household filing status, an

25   earned income tax credit, and an additional child tax
                                                               6
1    credit.   His entitlement to head-of-household status, the

2    earned income tax credit, and child tax credit is governed

3    by sections 2, 32, and 24, respectively.

4               To qualify as the head of a household the

5    taxpayer must, among other requirements, "maintain as his

6    home a household which constitutes for more than one-half

7    of such taxable year the principal place of abode ... [of]

8    a qualifying child."   § 2(b)(1)(A).    To be entitled to an

9    earned income tax credit, the taxpayer must have a

10   "qualifying child" during the taxable year.     § 2(c)(1)(A).

11   And a child tax credit is allowable only "with respect to

12   each qualifying child of the taxpayer."     § 24(a).   Thus,

13   petitioner bears the burden of proving that during 2018

14   D.C. and A.C. were "qualifying" children.

15              Section 152(c)(1) defines the term "qualifying

16   child."   See §§ 2(b)(1)(A)(i), 24(c)(1), and 32(c)(3)(A)

17   (cross-referring to section 152(c)).     Section 152(c)(1)(B)

18   provides that a child is not a qualifying child unless he

19   "has the same principal place of abode as the taxpayer for

20   more than one-half of such taxable year."     Petitioner did

21   not produce any evidence showing that his children resided

22   with him at any point during 2018.     Quite the contrary:

23   Petitioner stipulated that, after separating from his wife

24   in 2018, he lived in New Jersey, while D.C. and A.C. lived

25   in New York with their mother 100% of the time.
                                                              7
1    Accordingly, petitioner has not established that he had a

2    "qualifying child" during 2018.     He is therefore not

3    entitled to head-of-household filing status, an earned

4    income tax credit, or a child tax credit.

5                Petitioner urges that he helped support his

6    children.   But support is not relevant where the children

7    do not have "the same principal place of abode as the

8    taxpayer for more than one-half of [the] taxable year."

9    § 152(c)(1)(B).    And even if support were relevant,

10   petitioner supplied no evidence that he provided

11   meaningful support to D.C. and A.C.     There is nothing in

12   the documents petitioner supplied to respondent or to the

13   Court that substantiates any support.

14               At trial petitioner admitted that he did not

15   send his wife monthly checks or provide other support

16   directly to her.     He stated that he took the children to

17   restaurants occasionally and that his wife sometimes asked

18   him for money.     But petitioner did not supply to

19   respondent or the Court actual proof of support because

20   (he said) "it was not enough."

21               Consistent with the foregoing, decision will be

22   entered for respondent with respect to the deficiency and

23   for petitioner with respect to the accuracy-related

24   penalty.    This concludes the Court's oral findings of fact

25   and opinion in this case.
                                                    8
1    (Whereupon, at 3:47 p.m., the above-entitled

2    matter was concluded.)

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