                  T.C. Summary Opinion 2004-61



                     UNITED STATES TAX COURT



              HUMBERTO M. BETANCOURT, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 1154-03S.              Filed May 13, 2004.


     Humberto M. Betancourt, pro se.

     Ric D. Hulshoff, for respondent.



     PANUTHOS, Chief 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 in effect for the year in issue.
                                - 2 -

       Respondent determined a deficiency in Federal income tax of

$4,305.35 for the 2001 taxable year.      The issues for decision

are:    (1) Whether petitioner is entitled to head-of-household

filing status for 2001; (2) whether petitioner is entitled to

dependency exemption deductions for Erica Benicna Maceda and Ivan

Maceda Rodriguez for 2001; (3) whether petitioner is entitled to

an additional child tax credit of $22 for 2001; and (4) whether

petitioner is entitled to an earned income credit of $4,008 for

2001.

                             Background

       Some of the facts have been stipulated, and the stipulated

facts are incorporated in our findings by this reference.      At the

time of filing his petition, petitioner resided in Los Angeles,

California.

       During the year in issue, petitioner was a hardwood flooring

installer, and Cristina Rodriguez (Ms. Rodriguez) was a cook.

Ms. Rodriguez received wages of approximately $15,000 in 2001.

       Petitioner and Ms. Rodriguez have three children:    (1) Erica

Benicna Maceda (Erica), born February 13, 1988; (2) Tanya, born

1989; and (3) Ivan Maceda Rodriguez (Ivan), born April 15, 1993.

       Petitioner and Ms. Rodriguez were not married in 2001, but

they shared a checking account during the year.      Also in 2001,

they owned a duplex with two addresses:      4219 Zamora Street and

4221 Zamora Street.    The duplex consisted of side-by-side
                                - 3 -

apartments with separate entrances.     The apartment at 4219 Zamora

Street has one bedroom, and the apartment at 4221 Zamora Street

has two.    Erica, Tanya, and Ivan had keys to both apartments and

ate meals sometimes in one or the other apartment.

     Petitioner filed a timely Federal income tax return for the

2001 taxable year.    The return reflected an address of “4221

Zamora Street” and reported total income of $11,000.    Petitioner

filed as a “head of household” and claimed dependency exemption

deductions for Erica and Ivan, but not Tanya.    Petitioner also

claimed an additional child tax credit of $22 and an earned

income credit of $4,008 with Erica and Ivan as qualifying

children.

     Respondent issued petitioner a notice of deficiency dated

November 15, 2002.1

                             Discussion

     Section 7491(a) provides that in a court proceeding, the

burden of proof with respect to any factual issue shifts to the


     1
        The notice of deficiency included a rate adjustment
credit of $138.65, which petitioner had not claimed in his 2001
tax return. The Economic Growth and Tax Relief Reconciliation
Act of 2001, Pub. L. 107-16, sec. 101(a), 115 Stat. 38, 41-42,
created a new regular income tax bracket of 10 percent for
taxable years beginning after Dec. 31, 2000. See sec. 1(i).
Congress decided to implement the 10-percent rate bracket for
2001 via a rate reduction credit for that taxable year. See
secs. 1(i)(1)(D), 6428; H. Conf. Rept. 107-84, at 5-6 (2001).
The maximum amount of the rate reduction credit depends upon a
taxpayer’s filing status for 2001, and thus it is computational.
See sec. 1(i)(1)(B).
                                 - 4 -

Commissioner under certain prescribed conditions.    We conclude

that the burden of proof remains with petitioner, since he has

not met the criteria of section 7491(a)(2)(A) and (B).    Indeed,

we found petitioner’s testimony was at times inconsistent with

both Ms. Rodriguez’s testimony and documents made part of this

record.

1.   Head-of-Household Filing Status

      Petitioner filed as “head of household” for 2001.   In

general, section 2(b)(1)(A)(i) provides that a taxpayer shall be

considered a head of a household if, and only if, such taxpayer

is not married at the close of his or her taxable year, is not a

surviving spouse, and maintains as his or her home a household

which constitutes for more than one-half of such taxable year the

principal place of abode, as a member of such household, of a son

or daughter of the taxpayer.     A taxpayer shall be considered as

maintaining a household only if over half of the cost of

maintaining the household during the taxable year is furnished by

such taxpayer.   Sec. 2(b)(1).

      During the year in issue, petitioner was not married to Ms.

Rodriguez and was not a surviving spouse.    With respect to

maintaining a household, petitioner contends that 4221 Zamora

Street was a household that constituted the principal place of

abode for Erica, Ivan, and petitioner during 2001.    Petitioner

further contends that the other address of the duplex–-4219
                                - 5 -

Zamora Street–-was a household solely for Ms. Rodriguez and Tanya

during the taxable year.    The record, however, does not support

petitioner’s contentions.

      The extent of a “household” is not determined solely by

physical boundaries; instead we must look to all of the facts in

any particular case.   Estate of Fleming v. Commissioner, T.C.

Memo. 1974-137.   Tanya had unrestricted access to petitioner’s

household and had meals with Erica and Ivan during 2001.

Moreover, Ms. Rodriguez testified that she and the children lived

at the same address that petitioner claimed as his household.      On

the basis of the record, we find that petitioner’s household

consisted of Ms. Rodriguez, the children, and petitioner, whether

it be at 4221 Zamora Street or the entire duplex.

      Consequently, petitioner did not maintain such household

under section 2(b)(1), because he did not establish that he

furnished over half the cost of maintaining it for 2001.

Petitioner reported total income of $11,000, whereas Ms.

Rodriguez had wages of approximately $15,000.    Accordingly, we

conclude that petitioner is not entitled to head-of-household

filing status, and we sustain respondent’s determination on this

issue.

2.   Dependency Exemption Deductions

      A taxpayer may be entitled to a deduction of the exemption

amount for each dependent.   Sec. 151(a), (c).   The term
                                - 6 -

“dependent” includes a son of the taxpayer “over half of whose

support, for the calendar year in which the taxable year of the

taxpayer begins, was received from the taxpayer”.    Sec. 152(a).

      Given the limited information as to the amount paid for

support of the children, the existence of the joint checking

account and Ms. Rodriguez’s higher income for 2001 lead us to the

conclusion that petitioner did not provide over half of the

support for Erica and Ivan.   Accordingly, petitioner is not

entitled to dependency exemption deductions for Erica and Ivan

for 2001, and we sustain respondent on this issue.

3.   Additional Child Tax Credit

      Section 24(a)(1) provides for a “credit against the tax * *

* for the taxable year with respect to each qualifying child of

the taxpayer”.   The term “qualifying child” means any individual

if three tests are satisfied.   Sec. 24(c)(1).

      In the present case, the only relevant test is whether the

taxpayer is allowed a deduction under section 151 with respect to

such individual for the taxable year.   Sec. 24(c)(1)(A).   We have

concluded, however, that petitioner is not entitled to dependency

exemption deductions for Erica and Ivan for 2001.    Accordingly,

they are not qualifying children, and petitioner is not entitled

to the additional child tax credit of $22 for 2001.   We sustain

respondent’s determination on this issue.
                               - 7 -

4.   Earned Income Credit

      Section 32(a) provides for an earned income credit in the

case of an eligible individual.    Section 32(c)(1)(A)(i), in

pertinent part, defines an “eligible individual” as any

individual who has a qualifying child for the taxable year.2    A

qualifying child is one who satisfies a relationship test, a

residency test, and an age test.    Sec. 32(c)(3).   Erica and Ivan

satisfy all three tests, and they are qualifying children with

respect to petitioner.

      However, they are also qualifying children with respect to

Ms. Rodriguez.   Under such circumstances, for taxable years

beginning on or before December 31, 2001, section 32(c)(1)(C)

provides:

         (C) 2 or more eligible individuals.–-If 2 or more
      individuals would * * * be treated as eligible
      individuals with respect to the same qualifying child
      for taxable years beginning the same calendar year,
      only the individual with the highest modified adjusted
      gross income for such taxable years shall be treated as
      an eligible individual with respect to such qualifying
      child.

Section 32(c)(5) defines the term “modified adjusted gross




      2
        Petitioner could also be an eligible individual, even if
we were to find that he did not have any qualifying children.
See sec. 32(c)(1)(A)(ii). In such a situation, however,
petitioner would still not be entitled to the earned income
credit for 2001 because his total income of $11,000 exceeded the
“completed phaseout amount” of $10,710. See Rev. Proc. 2001-13,
sec. 3.03(1), 2001-1 C.B. 337, 339.
                                 - 8 -

income” to be the taxpayer’s adjusted gross income with certain

amounts disregarded and certain amounts included.

     In the present case, we conclude that petitioner’s modified

adjusted gross income would not be higher than that of Ms.

Rodriguez, given that her wage income alone was greater than

petitioner’s total income for 2001.       Accordingly, we sustain

respondent’s determination on this issue.

     Reviewed and adopted as the report of the Small Tax Case

Division.

     To reflect the foregoing,

                                              Decision will be entered

                                         for respondent.
