                  T.C. Summary Opinion 2002-142



                     UNITED STATES TAX COURT



                JOSE ANTONIO RIOS, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 8302-01S.                Filed November 1, 2002.


     Jose Antonio Rios, pro se.

     Travis Vance III, for respondent.



     DEAN, 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.    Unless otherwise

indicated, subsequent section references are to the Internal

Revenue Code in effect for the year in issue, and all Rule

references are to the Tax Court Rules of Practice and Procedure.

The decision to be entered is not reviewable by any other court,

and this opinion should not be cited as authority.
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     Respondent determined a deficiency in petitioner's Federal

income tax for 1998 of $1,610.    After concessions,1 the issues

that remain for decision are:    (1) Whether petitioner is entitled

to claim an additional dependency exemption deduction; (2)

whether petitioner is entitled to claim an additional child tax

credit; and (3) whether petitioner qualifies for head of

household filing status.

     Some of the facts have been stipulated and are so found.

The stipulation of facts and the accompanying exhibits are

incorporated herein by reference.    At the time the petition was

filed, petitioner resided in Athens, Georgia.

                             Background

     Petitioner and Terri Butler Chandler were never married.

Mrs. Chandler is Grant J. Butler's mother.    On May 9, 1994, the

Superior Court of Athens-Clarke County, Georgia, adjudged that

petitioner is Grant's father and ordered petitioner to pay

monthly child support of $500, provide major-medical insurance

for Grant, and pay $17,000 in past due child support at a rate of

12-percent interest.   Petitioner began making the $500 monthly

child-support payments.    During 1998, petitioner paid $15,386



     1
       In the notice of deficiency, respondent determined that
petitioner was not entitled to deductions for two dependency
exemptions, two child tax credits, and head of household filing
status. During the appeal process, respondent conceded that
petitioner is entitled to deduct an amount for one dependency
exemption and claim one child tax credit.
                                 - 3 -

towards the child-support arrearage.      Petitioner is appealing the

superior court's decision.   For purposes of this case, however,

the Court assumes that petitioner is Grant's biological father.

     Petitioner timely filed his 1998 Federal income tax return

as head of household and reported income of $44,417.     Petitioner

claimed a dependency exemption deduction and a child tax credit,

naming Grant as his "qualifying child".     Respondent issued a

notice of deficiency determining that petitioner is not entitled

to head of household filing status, the dependency exemption

deduction, or the child tax credit because he failed to

substantiate his claims.

                             Discussion

     Deductions are a matter of legislative grace, and taxpayers

must maintain adequate records to substantiate the amounts of any

deductions or credits claimed.    Sec. 6001; INDOPCO, Inc. v.

Commissioner, 503 U.S. 79, 84 (1992); sec. 1.6001-1(a), Income

Tax Regs.   The Court decides this case without regard to the

burden of proof.   Accordingly, the Court need not decide whether

current section 7491(a)(1) is applicable in this case.     See

Higbee v. Commissioner, 116 T.C. 438 (2001).

1.   Dependency Exemption Deduction

     Section 151(c) allows a taxpayer to deduct an exemption

amount for each "dependent" as defined in section 152.     Section

152(a) defines a dependent to include a son or daughter of the
                                - 4 -

taxpayer "over half of whose support, for the calendar year in

which the taxable year of the taxpayer begins, was received from

the taxpayer (or is treated under subsection (c) or (e) as

received from the taxpayer)".

     Section 152(e) provides a special rule in the case of a

child of parents who lived apart at all times during the last 6

months of the calendar year.    Section 152(e)(1) provides that, if

the child receives over half of his support from his parents and

he is in the custody of one or both of his parents for more than

half of the year, then the child is treated as receiving over

half of his support from the custodial parent.   In the case of

the remarriage of a parent, such as Mrs. Chandler, support of a

child received from the parent's new spouse is treated as

received from the parent.   Sec. 152(e)(5).

     Section 152(e)(1)(B) provides that the custodial parent is

the parent who had custody of the child for the greater portion

of the calendar year.   Petitioner testified that he has not seen

Grant for 8 years and that Grant did not live with him at any

time during 1998.    Because Mrs. Chandler had custody of Grant for

the greater portion of 1998, she is the custodial parent.    See

sec. 152(e)(1)(B).

     Pursuant to section 152(e)(2), the child is treated as

receiving over half of his or her support from the noncustodial

parent only if the custodial parent signs a written declaration
                                  - 5 -

that the custodial parent will not claim the child as a dependent

and the noncustodial parent attaches the declaration to the

noncustodial parent's return.     The declaration required by

section 152(e)(2)(A) must be made either on Form 8332, Release of

Claim to Exemption for Child of Divorced or Separated Parents, or

on a statement conforming to the substance of that form.     Sec.

152(e)(2); Miller v. Commissioner, 114 T.C. 184, 189 (2000).

      In the present case, Mrs. Chandler, as the custodial parent,

did not sign Form 8332 or any written declaration or statement

agreeing not to claim an exemption for Grant, and no such form,

declaration, or statement was attached to petitioner's return for

the year in issue.      It follows, therefore, that the exception set

forth in section 152(e)(2) does not apply and that the general

rule of section 152(e)(1) does apply.     Accordingly, petitioner is

not entitled to a deduction for a dependency exemption for Grant

for 1998.   See sec. 152(e)(1); Miller v. Commissioner, supra.2

2.   Child Tax Credit

     Respondent determined that petitioner is not entitled to

claim the child tax credit on his 1998 return because he is




     2
       The Court notes that even if it was determined that
petitioner is not Grant's father, the outcome of this case would
not differ. In that case, petitioner would not be entitled to a
dependency exemption deduction for Grant because in 1998 Grant's
principal place of abode was not petitioner's home and Grant was
not a member of petitioner's household. Sec. 152(a)(9).
                               - 6 -

unable to substantiate that Grant was a "qualifying child" as

defined in section 151.

      For the taxable year 1998, taxpayers are allowed to claim a

tax credit of $400 for each qualifying child.   Sec. 24(a).

Section 24(c)(1) defines a "qualifying child" as any individual

if:

           (A) the taxpayer is allowed a deduction under
      section 151 with respect to such individual for the
      taxable year,

           (B) such individual has not attained the age of 17
      as of the close of the calendar year in which the
      taxable year of the taxpayer begins, and

           (C) such individual bears a relationship to the
      taxpayer described in section 32(c)(3)(B). [Emphasis
      added.]

The plain language of section 24 establishes a three-pronged test

to determine whether a taxpayer has a qualifying child.     In

effect, if one of the qualifications is not met, the claimed

child tax credit must be disallowed.   The first element of the

three-pronged test requires that a taxpayer must have been

allowed a deduction for that child under section 151.   Sec.

24(c)(1)(A).

      Respondent determined that petitioner is not entitled to a

section 151 dependency exemption deduction for Grant for 1998.

The Court has held that respondent's determination regarding the

section 151 deduction is valid.   That holding is dispositive of

this issue, and, as a result, the Court sustains respondent's

determination regarding the section 24 child tax credit and
                                 - 7 -

holds, because of the plain language of the statute, that

petitioner is not eligible to claim the child tax credit.

3.   Head of Household Filing Status

     Respondent determined petitioner's filing status to be

single rather than head of household for 1998 because Grant did

not reside with petitioner for more than one-half of the year.

     Section 1(b) imposes a special tax rate on individuals

filing as head of household.   As relevant herein, section 2(b)

defines a "head of household" as an unmarried individual who

maintains as his home a household that constitutes the principal

place of abode for a son or daughter for more than half of the

taxable year.

     Petitioner has not demonstrated that he maintained such a

household.   The parties agree that Mrs. Chandler is Grant's full-

time custodian, and in 1998 petitioner and Mrs. Chandler lived in

separate residences.   As previously stated, petitioner had not

seen Grant for 8 years and Grant did not live with him at any
time during 1998.

     The evidence petitioner presented fails to establish that he

provided the principal place of abode for Grant for more than

one-half of the year in issue.    Moreover, petitioner offered no

evidence to show that he paid more than one-half the cost of

maintaining a household.   See sec. 2(b)(1).   The Court thus holds

that petitioner is not entitled to head of household filing

status.
                             - 8 -

    Reviewed and adopted as the report of the Small Tax Case

Division.

                                          Decision will be entered

                                     under Rule 155.
