                  T.C. Summary Opinion 2006-113



                     UNITED STATES TAX COURT



             CYRUS BARTHOLOMEW DAZZEL, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 11666-04S.            Filed July 18, 2006.


     Cyrus Bartholomew Dazzel, pro se.

     Robert Saal, for respondent.



     GOLDBERG, 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, and all Rule references are to the

Tax Court Rules of Practice and Procedure.
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     Respondent determined a deficiency in petitioner’s Federal

income tax of $4,499 for the taxable year 2003.    At trial,

petitioner conceded a previously claimed exemption for Shawnette

Starks (Ms. Starks).    Four issues for decision remain:   (1)

Whether petitioner is entitled to dependency exemption deductions

for MS and YS,1 (2) whether petitioner is entitled to head of

household filing status, (3) whether petitioner is entitled to an

earned income credit, and (4) whether petitioner is entitled to a

child tax credit.

                             Background

     Some of the facts have been stipulated, and they are so

found.    The stipulation of facts and attached exhibits are

incorporated herein by this reference.    At the time of filing the

petition, petitioner resided in Orange, New Jersey.

     During the year at issue, petitioner resided in Orange, New

Jersey, in a residence he purchased in 2001, and worked as a

self-employed carpenter.

     Petitioner began dating Ms. Starks sometime during 1999.

Also in 1999, Ms. Starks gave birth to MS.    Petitioner and Ms.

Starks were not living together at the time MS was born.

Petitioner was not present at the hospital at the time of the

birth, and no father was listed on MS’s birth certificate.




     1
         The Court uses the minor children’s initials.
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     In 2002, Ms. Starks gave birth to YS.    Following the birth,

Ms. Starks resided with her mother in Brooklyn, New York.    No

father was listed on YS’s birth certificate.    Hospital records

for Ms. Starks’s labor and delivery indicate her address is the

same as her mother’s in Brooklyn, New York.    Although petitioner

and Ms. Starks have lived together intermittently since 1999,

including the year at issue, they have never been married.

     Petitioner timely filed his Form 1040, U.S. Individual

Income Tax Return, for taxable year 2003.    In his Federal income

tax return, petitioner claimed MS and YS as dependents.

Petitioner also claimed head of household filing status, an

earned income credit, and a child tax credit.

     On June 7, 2004, respondent issued a notice of deficiency

denying petitioner: (1) The claimed dependency exemptions; (2)

head of household filing status; (3) an earned income credit,

and; (4) a child tax credit for taxable year 2003.    Petitioner

timely filed the underlying petition in this case on July 6,

2004.

                           Discussion

   Generally, the Commissioner’s determination of a deficiency

is presumed correct, and the taxpayer bears the burden of proving

that the determination is improper.    Rule 142(a)(1); Welch v.

Helvering, 290 U.S. 111, 115 (1933).    Deductions are a matter of

legislative grace, and the taxpayer bears the burden of proving
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that he is entitled to any claimed deductions.      New Colonial Ice

Co. v. Helvering, 292 U.S. 435, 440 (1934).      This includes the

burden of substantiation.     Hradesky v. Commissioner, 65 T.C. 87,

89-90 (1975), affd. per curiam 540 F.2d 821 (5th Cir. 1976).

Although section 7491 may shift the burden of proof to respondent

in specified circumstances, petitioner here has not established

that he meets the prerequisites under section 7491(a)(1) and (2)

for such a shift.

I.   Dependency Exemptions

     In general, a taxpayer is allowed as a deduction an exemption

for every dependent.   Sec. 151(a),(c).   A child of a taxpayer is

a dependent if the requirements of section 151(c)(1) are met, and

the taxpayer contributed over one-half of the support for the

child during the taxable year.    Sec. 152(a).   Accordingly, the

first issue for discussion is whether MS and YS meet the

requirements under section 151 entitling the petitioner to the

claimed dependency deductions.

     Both petitioner and Ms. Starks share a belief that petitioner

is the biological parent of MS and YS.    Petitioner testified that

the children lived with him in Orange, New Jersey, in 2003 when

they were not otherwise staying with Ms. Starks in her maternal

home in Brooklyn, New York.    At trial, Ms. Starks testified that

she, MS, and YS resided apart from petitioner in Brooklyn, New

York.   Petitioner asserts that his claimed exemptions for MS and
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YS are appropriate as they are his biological children with Ms.

Starks.

   The issue of paternity first came before this Court when the

case was called for trial in June 2005.   At that time, although

petitioner maintained his readiness for trial, respondent raised

the issue of the possible production of amended copies of birth

certificates for MS and YS.   Petitioner’s subsequent request for

a continuance was granted, with the Judge specifically directing

petitioner to obtain corrected copies of the children’s birth

certificates.

   When this case was again called for trial on October 17,

2005, petitioner did not produce corrected birth certificates,

despite being provided 4 months to obtain such copies.   Trial was

set for October 20, 2005, in order for petitioner to obtain

corrected copies of the birth certificates.   Petitioner testified

at trial that, although he had taken the steps necessary to

obtain corrected birth certificates, new certificates had yet to

be issued.

   We do not find petitioner’s testimony credible on this issue.

Petitioner was granted two continuances (the first lasting 4

months) where this Court specifically directed petitioner to

obtain birth certificates to establish his paternal relationship

to MS and YS.   Petitioner has not provided any substantiated or

credible evidence that he has sought to have his name added as
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the father of MS and YS on their respective birth certificates.

Moreover, we do not find Ms. Starks’ testimony credible that but

for his running an errand at the time that the birth certificate

for YS was signed in the hospital, petitioner would have been

listed as the father on that birth certificate.    Accordingly, we

find that the petitioner has not proven that he is the biological

parent of MS and YS.

   Although petitioner has failed to sustain his biological

claims with respect to MS and YS, section 152(a) permits a

dependency deduction for a foster child or an unrelated

individual who has the same principal place of abode as the

taxpayer and is a member of the taxpayer’s household during the

taxable year at issue.   Sec. 152(a)(9), (b)(2).   Accordingly, the

next inquiry is whether petitioner has shown that the children

principally resided in his Orange, New Jersey, residence during

2003.

   We find both inconsistency and irreconcilable vagueness in

the testimony of petitioner and Ms. Starks on the issue of where

the children principally resided during 2003.   Specifically,

although Ms. Starks testified that the children only resided in

Brooklyn, New York for 2 months while she recovered from surgery,

petitioner testified that the children stayed with their mother

and grandmother in New York when he was working.   Although

petitioner testified that medical costs incurred by the children

in 2003 ranged from six to seven thousand dollars, he did not
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produce any documentation in the form of a medical bill or

statement listing the children’s address as Orange, New Jersey.

      Because we cannot conclude that MS and YS meet either the

section 151(c)(3) or 152(a) definition of dependent, we need not

address whether petitioner provided more than one-half of their

support, and accordingly sustain the respondent on this issue.

II.    Head of Household Status

      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, for more than one-half of

the taxable year, constitutes the principal place of abode of a

person who is a dependent of the taxpayer, if the taxpayer is

entitled to a deduction for the taxable year for that dependent

under section 151.

      The Court has sustained respondent’s determination

disallowing the claimed dependency exemption deductions, and, as

a result, petitioner is not entitled to head of household filing

status for 2003.    Thus, respondent’s determination that

petitioner is not entitled to head of household filing status is

sustained.

III.    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
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pertinent part, defines an “eligible individual” as any

individual who has a qualifying child for the taxable year.

      The Court has determined that the claimed dependents do not

meet the definitional requirements of a qualifying individual.

Sec. 32(c)(3).    As a result, petitioner is not entitled to an

earned income credit for 2003.      Thus, respondent’s determination

that petitioner is not entitled to an earned income credit is

sustained.

IV.    Child Tax Credit

      We next consider the child tax credit.   A taxpayer may be

entitled to a credit against tax with respect to each “qualifying

child”.    Sec. 24(a).    The plain language of section 24

establishes a three-pronged test to determine whether a taxpayer

has a qualifying child.     If one of the qualifications is not met,

the claimed child tax credit must be disallowed.      The first tine

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).

      As stated supra, the Court has sustained respondent’s

determination that petitioner is not entitled to dependency

exemption deductions for the children.      Thus, petitioner fails

the first prong of the test of section 24.      The Court accordingly

sustains respondent’s determination regarding the child tax

credit under section 24.
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       Reviewed and adopted as the report of the Small Tax Case

Division.

                                     Decision will be entered

                              for respondent.
