                  T.C. Summary Opinion 2007-209



                      UNITED STATES TAX COURT



                 ANTONIO O. NEAL, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 12998-05S.              Filed December 13, 2007.



     Antonio O. Neal, pro se.

     Frederic J. Fernandez and Mark Miller, 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.   Pursuant to section

7463(b), the decision to be entered is not reviewable by any

other court, and this opinion shall not be treated as precedent

for any other case.   Unless otherwise indicated, subsequent

section references are to the Internal Revenue Code in effect for
                                - 2 -

the year in issue, and all Rule references are to the Tax Court

Rules of Practice and Procedure.

     Respondent determined a deficiency of $2,598 in petitioner’s

2003 Federal income tax and an accuracy-related penalty of

$519.60 under section 6662.    After concessions,1 the issues for

decision are:    (1) Whether petitioner is entitled to dependency

exemption deductions for his two minor children, (2) whether

petitioner is entitled to head of household filing status, (3)

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

whether petitioner is entitled to the additional child tax

credit, and (5) whether petitioner is liable for the accuracy-

related penalty under section 6662.

                              Background

     The stipulation of facts and the attached exhibits are

incorporated herein by reference.    At the time the petition was

filed, petitioner resided in Kenosha, Wisconsin.

     Petitioner is self-employed as a general contractor.

Petitioner runs a small contracting business under the name “The

Untouchables”.    Petitioner has two children:   A.O.N. and A.V.N.2



     1
       At trial, respondent conceded that there was no wage
income of $2,430 or scholarship or grant income of $961 received
by petitioner, as determined in the notice of deficiency.
Respondent also conceded that petitioner was engaged in a trade
or business and therefore, was entitled to a $15,000 loss
reported on his Schedule C, Profit or Loss From Business.
     2
         The Court uses initials when referring to minor children.
                                  - 3 -

The mother of A.O.N. is Terry Clark (Ms. Clark).       Ms. Clark

resides in Elgin, Illinois.      During the year in issue, A.O.N. was

14 years old.      The mother of A.V.N. is Kathryn M. Janecky (Ms.

Janecky).      The record is silent with respect to Ms. Janecky’s

place of residence.      During the year in issue, A.V.N. was 3 years

old.

       Petitioner married Tamera Neal (Ms. Neal) (a.k.a. Tamera

Gudmundson,3 a.k.a. Tamera Clare4) in 2001.      Petitioner and Ms.

Neal purchased a single-family home together in Zion, Illinois

(the Zion residence), sometime in 2001.       The couple lived

together at the Zion residence from 2001 through the beginning of

2003 with Ms. Neal’s four children.       At some time in early 2003,

petitioner’s son, A.O.N., came to live with him.

       On March 1, 2003, petitioner entered into a rental agreement

between himself and Tamera Clare, lessor,5 (a.k.a. Ms. Neal) for

a month-to-month lease on an apartment located in Kenosha,

Wisconsin6 (the Kenosha apartment).       The rental agreement

specified that the monthly rent due for the unit--$650--would be



       3
           Gudmundson is Ms. Neal’s former name by marriage.
       4
           Clare is Ms. Neal’s maiden name.
       5
       The record is silent as to when Ms. Neal became the lessor
on this apartment.
       6
       The Court takes judicial notice that the towns of Zion,
Ill., and Kenosha, Wis., are located 10 miles apart from each
other.
                               - 4 -

paid only to Ms. Neal.   From March 1, 2003, through the time of

trial, Ms. Neal remained in the Zion residence with her children.

Ms. Neal’s four children and A.O.N. were enrolled in the Zion-

Benton Township School District for the 2003-2004 school year.

     On December 19, 2005, petitioner and Ms. Neal refinanced the

Zion residence by executing a new mortgage on the property.    The

December 19, 2005, mortgage was made between Bergin Financial,

Inc., mortgagor, and “Antonio Neal and Tamera Gudmundson aka

Tamera Neal, Husband and Wife,” mortgagees.   The parties agree

that petitioner and Ms. Neal were married throughout 2003, and as

of the date of trial.

Custody and Care of A.O.N. and A.V.N.

     The record is silent as to any formal custody arrangement

between petitioner and Ms. Clark with respect to A.O.N.   A.O.N.

has resided with petitioner since early 2003.   Petitioner

receives no child support from Ms. Clark for A.O.N.

     A.O.N. attended Zion-Benton Township High School so that he

would be able to provide afterschool care to Ms. Neal’s four

children who were of elementary school age.

     Petitioner provided all the financial support for A.O.N.

during the taxable year in issue, including enrolling A.O.N. in

numerous afterschool and weekend athletics programs at the YMCA.

     With respect to A.V.N., the parties agree that Ms. Janecky

was the custodial parent of the child during the year in issue.
                               - 5 -

Pursuant to a Stipulation and Order for Child Support (Order)

entered by the Circuit Court of Racine County, Wisconsin, on

November 10, 2000, Ms. Janecky was awarded primary custody, with

petitioner receiving visitation with the child, “at all

reasonable times upon prior notice to the mother.”   According to

his arrangement with Ms. Janecky, petitioner had custody of

A.V.N. every other weekend, and throughout the entire summer.

The record is inconclusive, however, as to where A.V.N. stayed

when the child visited petitioner during the year in issue.7

     Petitioner provided financial support for A.V.N. when the

child stayed with him, including providing summer vacations,

trips, clothing, and food.   Pursuant to the Order, petitioner was

ordered to pay $26 per week in child support for A.V.N.

     The Order also provided that petitioner would be entitled to

claim a dependency exemption deduction for A.V.N. “every other

year * * * following the date of this document”.   Petitioner

claimed a dependency exemption deduction for A.V.N. in the year

at issue, but he did not attach a Form 8332, Release of Claim to

Exemption for Child of Divorced or Separated Parents,8 to his

2003 Federal income tax return.



     7
       Ms. Neal testified that A.V.N. stayed at the Zion
residence, while petitioner indicated that the child was with him
at the Kenosha apartment during visits.
     8
       The record is silent as to whether petitioner and Ms.
Janecky were ever married.
                               - 6 -

Filing of Petitioner’s 2003 Federal Income Tax Return

     Petitioner’s Form 1040, U.S. Individual Income Tax Return,

was prepared and electronically filed by H&R Block Tax Services

located in Gurnee, Illinois.   Petitioner filed his return as head

of household and claimed two children as dependents, the earned

income credit, and the additional child tax credit.    In the

notice of deficiency, respondent determined that petitioner’s

filing status was married filing separately and disallowed the

two claimed dependency exemption deductions, the earned income

credit, and the additional child tax credit.    The tax return

preparer prepared petitioner’s return based on information that

petitioner provided.   Petitioner’s 2003 return was filed on April

6, 2004.

                            Discussion

     In general, respondent’s determinations as set forth in a

notice of deficiency are presumed correct.     Welch v. Helvering,

290 U.S. 111, 115 (1933).   In pertinent part, Rule 142(a)(1)

provides the general rule that the burden of proof shall be upon

the taxpayer.   In certain circumstances, however, if the taxpayer

introduces credible evidence with respect to any factual issue

relevant to ascertaining the proper tax liability, section 7491

shifts the burden of proof to the Commissioner.    Sec. 7491(a)(1);

Rule 142(a)(2).   Petitioner does not argue that section 7491 is

applicable in this case, and he has not established that the
                                 - 7 -

burden of proof should shift to respondent.    Petitioner,

therefore, bears the burden of proving that respondent’s

determinations in the notice of deficiency are erroneous.     See

Rule 142(a); Welch v. Helvering, supra at 115.

Dependency Exemption Deductions

     Petitioner claimed dependency exemption deductions for

A.O.N. and A.V.N. for taxable year 2003.    Section 151 allows

deductions for personal exemptions, including exemptions for

dependents of the taxpayers.    See sec. 151(c).   Section 152(a)

defines the term “dependent”, in pertinent part, to include a son

or daughter of the taxpayer over half of whose support for the

calendar year was received from the taxpayer.      The term “support”

includes food, shelter, clothing, medical and dental care,

education, and the like.   Sec. 1.152-1(a)(2)(i), Income Tax Regs.

In determining whether an individual received more than half of

his or her support from a taxpayer there shall be taken into

account the amount of support received from the taxpayer as

compared to the entire amount of support which the individual

received from all sources.     Id.

     Section 152(e) provides a special support test for children

of individuals who are no longer or were never married.      See King

v. Commissioner, 121 T.C. 245, 248-249 (2003).      Simply put,

section 152(e) provides that if a child receives over half of his

or her support from his or her parents and is in the custody of
                               - 8 -

one or both of them for more than half of the calendar year, then

the parent having custody of the child for a greater portion of

the year at issue (the custodial parent) is entitled to claim the

dependency exemption deduction for that child unless, as relevant

here, the custodial parent has validly executed a written release

of his or her right to claim the dependency exemption deduction.

     With respect to A.O.N., we first note that respondent did

not disallow the exemption claimed by petitioner because the

child had also been claimed by another taxpayer.   Rather,

respondent disallowed the exemption claimed for A.O.N. on the

grounds that petitioner had failed to substantiate that he

supported A.O.N. and that A.O.N. resided with petitioner during

the year in issue.

     Based on the testimony and evidence provided, we are

convinced that A.O.N. resided with petitioner for the majority of

the 2003 taxable year.   Our conclusion is buttressed by a letter

from the Registrar of the Zion-Benton Township School District

stating that A.O.N. was “in the custody of his father, Antonio

Neal Sr., for the 2003-2004 school year”.   We also find

petitioner’s testimony that A.O.N. was enrolled at the YMCA

throughout 2003 to be credible and convincing.

     With respect to respondent’s argument that A.O.N. could have

stayed with his mother and still attended school in Zion, the

Court takes notice that the towns of Elgin and Zion are located
                                - 9 -

more than 60 miles apart, thus making the possibility of a daily

commute to and from school in excess of 2 hours highly

improbable.   Accordingly, we find that A.O.N. resided with

petitioner for the greater portion of the year in issue, and that

petitioner is, therefore, entitled to the dependency exemption

deduction pursuant to section 152(e)(1) with respect to A.O.N.

     With respect to A.V.N., petitioner admits that he was not

the custodial parent of her in 2003.    Moreover, although

petitioner did provide support for A.V.N. during the year in

issue of $26 per week, in addition to those incidental costs that

he incurred in providing for the child’s needs during visitation

times, he did not either provide substantiation for these amounts

or show the total amount of support provided to the child as

required under section 152.    See sec. 1.152-1(a)(2)(i), Income

Tax Regs.

     With respect to petitioner’s argument that he was

unequivocally entitled to claim the dependency exemption

deduction for A.V.N. based on the language in the aforementioned

Order, the law is clear that State courts, by their decisions,

cannot determine issues of Federal tax law.    See Commissioner v.

Tower, 327 U.S. 280, 288 (1946).

     Finally, petitioner did not attach a Form 8332 pertaining to

A.V.N. to his 2003 return.    His argument that the H&R Block

office that assisted him in the preparation of his 2003 return
                              - 10 -

was to blame for this error is both unconvincing and without

merit.9   It is the taxpayer’s duty, and not his return preparer’s

duty, to attach a valid Form 8332, or an equivalent written

declaration, to the return at the time of filing; this failure

prohibits the taxpayer from claiming a dependency exemption

deduction for his or her minor child.    See Presley v.

Commissioner, T.C. Memo. 1996-553.     Accordingly, we sustain

respondent’s determination with respect to petitioner’s claimed

dependency exemption deduction for A.V.N. only.

Head of Household Filing Status

     Petitioner filed his 2003 return as head of household, and

respondent determined that petitioner’s filing status was married

filing separately in the notice of deficiency.    Respondent’s

determination was made on the ground that petitioner had not

sufficiently established that he was not married to Ms. Neal in

2003.

     Section 1(b) imposes a special income tax rate on an

individual filing as head of a household.    Section 2(b) provides

the requirements for head of household filing status.     As

relevant here, to qualify as a head of household, a taxpayer must

(a) be unmarried at the end of the taxable year, (b) not be a

surviving spouse, and (c) maintain as the taxpayer’s home a



     9
       Petitioner testified that he was not aware of the Form
8332 requirement until the time of trial.
                               - 11 -

household that constitutes the principal place of abode of an

unmarried son or daughter.    Sec. 2(b)(1).

     Section 2(b)(1) clearly states that “an individual shall be

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

is not married at the close of his taxable year”.    Petitioner has

the burden of proving that he was unmarried.    Rule 142(a).

     The record is clear that petitioner was still married to Ms.

Neal at the close of the taxable year 2003.    First, both

petitioner and Ms. Neal testified that they were still married as

of the date of trial.    Second, we are unconvinced from our review

of the record before us that petitioner and Ms. Neal were

separated and maintaining separate households during the year in

issue.    See secs. 2(c), 7703(b).   Although the lease contained in

the record specifies that all rents were to be paid to Ms. Neal,

neither petitioner nor Ms. Neal produced any proof at trial that

petitioner paid the rent on the Kenosha apartment.    Petitioner

did not produce any evidence that he paid any costs associated

with the maintenance of the Kenosha apartment, including garbage

collection costs, cable television, or telephone service.10

     When asked by the Court why petitioner did not bring any

proof of his residence in 2003 to Court, petitioner replied that

he only brought those documents listed in a letter provided to


     10
       According to the lease, the rent for the unit covered all
utilities. Cable, television, telephone, and garbage collection
costs were the responsibility of the lessee.
                                - 12 -

him by respondent, and that had he known that the Court would

require proof of his residence in Kenosha, he would have brought

those documents with him.

     The burden of refuting respondent’s determinations rests

with petitioner.    Rule 142(a)(1).   It is not respondent’s duty to

ensure that petitioner is aware of the evidence that he or she

may need to present before the Court.    Further, petitioner

received a Standing Pretrial Notice from the Court which informed

petitioner to “organize” and “present all documents” at trial

pertinent to his case.    Petitioner was aware that both his

marital status and place of residence in 2003 were at issue in

this case.11    It follows, therefore, that petitioner has not met

his burden in refuting respondent’s determination with respect to

his marital status for 2003.

     Accordingly, and based on the foregoing, we hold that

petitioner is not entitled to head of household filing status for

the taxable year 2003.    Respondent’s determination on this issue

is sustained.

Earned Income Credit

     As previously stated, petitioner claimed an earned income

credit for 2003 with A.O.N. and A.V.N. as the qualifying



     11
       As grounds for review, the petitioner lists on his
petition to the Court that he “filed a true and complete tax
return” and that he and his wife “were separated” and living
apart during the year in issue.
                                - 13 -

children.   In the notice of deficiency, respondent disallowed the

earned income credit in full.

     Subject to certain limitations, an eligible individual is

allowed a credit which is calculated as a percentage of the

individual’s earned income amount.       Sec. 32(a)(1).   One such

limitation applies to married individuals.       Section 32(d)

provides:   “In the case of an individual who is married (within

the meaning of section 7703), this section shall apply only if a

joint return is filed for the taxable year under section 6013.”

Section 7703(a)(1) provides that “the determination of whether an

individual is married shall be made as of the close of his

taxable year” and that certain married individuals living apart

shall not be considered as married.

     The parties agree that petitioner was still married to Ms.

Neal at the close of the taxable year 2003, and for reasons

previously stated, the Court is not satisfied that petitioner

was living apart from Ms. Neal in 2003.       Accordingly, since

petitioner did not file a joint return for taxable year 2003, is

still married to Ms. Neal, and cannot prove that he was separated

from Ms. Neal in 2003, he is not entitled to an earned income

credit for taxable year 2003.    Respondent’s determination on this

issue is sustained.
                              - 14 -

Additional Child Tax Credit

     Petitioner claimed the additional child tax credit with

respect to A.O.N. and A.V.N. for the taxable year 2003.    Section

24(a) authorizes a child tax credit with respect to each

qualifying child of the taxpayer.   The term “qualifying child” is

defined in section 24(c).   A “qualifying child” means any

individual with respect to whom the taxpayer is allowed a

deduction under section 151, who has not attained the age of 17

as of the close of the taxable year, and who bears a relationship

to the taxpayer as prescribed by section 32(c)(3)(B).   Sec.

24(c)(1).

     For reasons previously discussed, petitioner is entitled to

the dependency exemption deduction with respect to A.O.N. under

section 151.   Therefore, A.O.N. is petitioner’s only qualifying

child, and petitioner is entitled to a child tax credit with

respect to A.O.N. only.

Section 6662 Penalty

     The final issue is whether petitioner is liable for the

accuracy-related penalty for the year 2003 under section 6662

for negligence, disregard of rules or regulations, or a

substantial understatement of income tax.   Sec. 7491(c) places

upon the Commissioner the burden of production with respect to

any penalty or addition to tax.   Based on the record, we hold

that respondent has satisfied the burden with respect to the
                                 - 15 -

section 6662(a) accuracy-related penalty for the reasons

discussed hereinafter.

     Section 6662(a) applies to any portion of an underpayment of

tax required to be shown on a return in an amount equal to 20

percent of the portion of the underpayment to which section 6662

applies.   Section 6662(b)(1) provides that the penalty shall

apply to any underpayment attributable to negligence or disregard

of rules or regulations.

     Section 6662(c) provides that the term “negligence” includes

any failure to make a reasonable attempt to comply with the

provisions of the Internal Revenue laws, and the term “disregard”

includes any careless, reckless, or intentional disregard of

rules or regulations.     Negligence is the lack of due care or

failure to do what a reasonable and ordinarily prudent person

would do under the circumstances.      Neely v. Commissioner, 85 T.C.

934, 947 (1985).

     Negligence frequently takes the form of overstated

deductions.     Alberico v. Commissioner, T.C. Memo. 1995-542.

Overstatement of deductions can reflect the taxpayer’s inability

to maintain adequate records; this inadequacy alone may be

grounds for imposing the penalty.      Id.   A taxpayer is required to

maintain records sufficient to establish information provided on

a tax return.     Id.   Failure to maintain records to substantiate

claimed deductions is evidence, therefore, of taxpayer
                                - 16 -

negligence.

     Petitioner filed his 2003 return as head of household and

claimed dependency exemption deductions for two minor children,

the earned income credit, and the additional child tax credit.

As previously discussed, petitioner was entitled to claim a

dependency exemption deduction for only one child, A.O.N., based

on the evidence presented to the Court.      Respondent’s other

determinations were sustained.

     With respect to the sustained determinations, petitioner was

responsible for complying with the provisions underlying the

requirements for the claimed deductions and filing status, and to

maintain records adequate to establish his entitlement thereto.

Petitioner failed to do this.

     Accordingly, and based on the foregoing,

                                             Decision will be entered

                                         under Rule 155.
