                   T.C. Summary Opinion 2003-49



                       UNITED STATES TAX COURT



           HEATHER LEE COMEAU SLIWINSKI, Petitioner v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 9620-01S.               Filed May 9, 2003.


     Heather Lee Comeau Sliwinski, pro se.

     Cynthia J. Olson and James Gehres, for respondent.



     VASQUEZ, Judge:    This case was heard pursuant to section

7463.1   The decision to be entered is not reviewable by any other

court, and this opinion should not be cited as authority.

     Respondent determined a deficiency of $2,341 in petitioner’s

Federal income tax.    The issues for decision are whether, during



     1
        Unless otherwise indicated, all section references are to
the Internal Revenue Code, and all Rule references are to the Tax
Court Rules of Practice and Procedure.
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the 2000 taxable year (year at issue), petitioner is entitled to

(1) a dependency exemption deduction,2 (2) head-of-household

filing status, and (3) the earned income credit (EIC).

                            Background

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

The stipulation of facts and the attached exhibits are

incorporated herein by this reference.   At the time she filed the

petition, petitioner resided in Wolf Creek, Montana.

     Petitioner was born in 1981.   Petitioner has three

biological children:   Jacob, Rebekah, and Michael.   The father of

these children is not involved with them, nor does the father

claim these children as dependents.    Petitioner does not receive

assistance from the State to support these children.

     In 1999, petitioner purchased from her father a 2-acre tract

of land within his 20-acre ranch.   During the year at issue,

petitioner lived with her children in a cabin located on this 2-

acre tract.   Petitioner paid the monthly expenses, which included


     2
        At trial, petitioner raised for the first time that she
is entitled to a dependency deduction for two of her biological
children. As a general rule, we do not consider an issue raised
for the first time at trial because it has not been properly
pleaded. Estate of Mandels v. Commissioner, 64 T.C. 61, 73
(1975). When issues not raised by the pleadings are tried by
implied consent of the parties, however, the issues shall be
treated as if they had been raised in the pleadings. Rule 41(b).
The parties satisfied Rule 41(b) when they introduced the issue
at trial and acquiesced in the introduction of evidence on that
issue without objection. LeFever v. Commissioner, 103 T.C. 525,
538 (1994), affd. 100 F.3d 778 (10th Cir. 1996); see also Hardin
v. Manitowoc-Forsythe Corp., 691 F.2d 449, 456 (10th Cir. 1982).
                                   - 3 -

expenses for propane and gas for the generators to provide

electricity.

        Petitioner’s family has picked nuts for about 15 years.

Petitioner has led this activity for the last 5 or 6 years.

During the nut-picking season, petitioner and her children go to

Utah or Nevada to pick nuts and stay in a small trailer.

Petitioner then sells the nuts on a cash basis and earns about

$10,000 per season.       During the year at issue, petitioner also

worked at Goodwill Industries, Denny’s Restaurant, and Southern

Utah Pecan Ranch.

        On her 2000 tax return, petitioner filed under “Head of

household” filing status and claimed her stepbrother, Brendin

Sliwinski, and her stepsister, Anna Sliwinski, as dependents.

Petitioner reported $10,150 on the Schedule C, Profit or Loss

From Business, as self-employment income from the nut picking,

and $3,780 in wages.       After claiming the EIC, petitioner claimed

a refund of $2,341.

        In the notice of deficiency, respondent determined that

petitioner was not the custodial parent of the claimed

dependents, changed her filing status to “Single”, disallowed her

Schedule C self-employment income, and denied her claim to the

EIC.3       As a result, respondent denied petitioner’s refund.


        3
        The notice of deficiency reports that the year at issue
is 2001. We note that the year at issue is 2000 as shown on
petitioner’s tax return, the petition, and forms attached to the
                               - 4 -

Petitioner filed a timely petition disputing respondent’s

determinations.

     After the petition was filed, petitioner filed an amended

tax return in which she claimed two of her biological children,

Rebekah and Michael, as dependents.    Petitioner received the

birth certificates and Social Security numbers for Rebekah and

Michael after she filed her original tax returns.    The birth

certificates state that Rebekah was born on October 27, 1998, and

Michael was born on October 30, 2000.

                            Discussion

     At trial, petitioner conceded that she is not entitled to

dependency exemption deductions for her stepbrother and

stepsister.   Petitioner, however, argues that she is entitled to

dependency exemption deductions for two of her biological

children, Rebekah and Michael, and is entitled to the EIC.

Petitioner bears the burden of proof.4   Rule 142(a).   As an

initial matter, we found petitioner’s testimony to be credible.




notice of deficiency (i.e., Form 4549-CG-S, Income Tax
Examination Changes; Form 886-A, Explanation of Items).    Further,
the notice of deficiency was issued on May 5, 2001.
     4
        Petitioner did not argue that the burden of proof should
be shifted pursuant to sec. 7491(a). Further, we do not find
that the resolution of this case depends on which party has the
burden of proof. We resolve the issues on the basis of a
preponderance of evidence in the record.
                                 - 5 -

Dependency Exemption Deduction

     Section 151 allows a deduction for exemptions provided by

that section.    Sec. 151(a).   A taxpayer is allowed an exemption

for each dependent, as defined in section 152, if the dependent,

for the taxpayer’s calendar year, (1) has gross income less than

the exemption amount, or (2) is a child of the taxpayer and has

not attained the age of 19 or is a student who has not attained

the age of 24.    Sec. 151(c)(1).

     A dependent is an individual listed in section 152(a), over

half of whose support is received from the taxpayer.    Sec.

152(a).   In order to qualify as a dependent, the individual must

be related to the taxpayer in one of the ways enumerated in

section 152(a)(1) through (8), or, if the individual is unrelated

to the taxpayer, the individual must live with the taxpayer and

be a member of the taxpayer’s household throughout the entire

taxable year of the taxpayer.    Sec. 152(a)(9); Trowbridge v.

Commissioner, 268 F.2d 208 (9th Cir. 1959), affg. 30 T.C. 879

(1958); Turay v. Commissioner, T.C. Memo. 1999-315; Butler v.

Commissioner, T.C. Memo. 1998-355; sec. 1.152-1(b), Income Tax

Regs.

     We conclude that Rebekah and Michael are dependents of

petitioner because they are the daughter and son, respectively,

of petitioner, as shown by their birth certificates, and

petitioner credibly testified that she provided more than half of
                                 - 6 -

their support in 2000.   Sec. 152(a); see Lilley v. Commissioner,

T.C. Memo. 1989-602 (taxpayer is entitled to dependency exemption

based upon his credible testimony that he supplied over half of

the support for his daughter).    Further, we hold that petitioner

is entitled to a deduction for the exemption amount for Rebekah

and Michael because Rebekah and Michael are children of

petitioner who have not attained the age limits provided for in

section 151(c)(1)(B).

Head-of-Household Filing Status

     In order to qualify for head-of-household filing status,

petitioner must satisfy the requirements of section 2(b).

Pursuant to section 2(b), and as relevant therein, an individual

qualifies as a head of household if the individual is not married

or a surviving spouse at the close of the taxable year and

maintains as his home a household that constitutes for more than

one-half of the taxable year the principal place of abode of a

son or daughter.   Sec. 2(b)(1)(A)(i).   Further, a taxpayer

“maintains a household” if over half of the cost of maintaining

the household is furnished by the taxpayer.    Sec. 2(b)(1).

     We conclude that petitioner qualifies for head-of-household

filing status because she is not married or a surviving spouse,

her home was a household that constituted for more than one-half

of 2000 the principal place of abode for her son and daughter,

Michael and Rebekah, respectively, and petitioner credibly
                                - 7 -

testified that she provided over half the cost of maintaining her

household.

Earned Income Credit

       Section 32(a)(1) allows an eligible individual an EIC

against the individual’s tax liability.    An eligible individual

is any individual who either:    (1) Has a “qualifying child” as

defined by section 32(c)(3)(A), or (2) has no qualifying child

and meets the requirements of section 32(c)(1)(A)(ii).

Briggsdaniels v. Commissioner, T.C. Memo. 2001-321.

       A “qualifying child” includes a child who satisfies the

relationship test, has the same principal place of abode as the

taxpayer for more than one-half of the taxable year, and

satisfies the age requirements.    Sec. 32(c)(3).   We conclude that

petitioner’s children meet these requirements to entitle

petitioner to the EIC for a qualifying child.

       Respondent argues that petitioner is not allowed the EIC,

however, because petitioner did not prove that she made the

income, specifically the $10,150 of self-employment income, to

support the claimed EIC.

       We found petitioner’s testimony to be credible and

sufficient to establish that she earned $10,150 of self-

employment income through her nut picking to support the claimed

EIC.    This testimony is corroborated by an invoice which reports
                                 - 8 -

that petitioner received income from nut picking during the year

at issue.

     In reaching our holdings herein, we have considered all

arguments made, and to the extent not mentioned above, we

conclude them to be moot, irrelevant, or without merit.

     To reflect the foregoing,

                                              Decision will be

                                         entered for petitioner.
