                            T.C. Memo. 2008-270



                         UNITED STATES TAX COURT



                     ORALIA PAVIA, Petitioner v.
            COMMISSIONER OF INTERNAL REVENUE, Respondent



       Docket No. 640-07.                  Filed December 4, 2008.



       Oralia Pavia, pro se.

       Jeffrey D. Heiderscheit, for respondent.



               MEMORANDUM FINDINGS OF FACT AND OPINION


       VASQUEZ, Judge:    Respondent determined a $5,527 deficiency

in petitioner’s 2005 Federal income tax.      The issues for decision

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

deductions for her nieces; (2) whether petitioner is entitled to

child tax credits for her nieces; (3) whether petitioner is
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entitled to an earned income tax credit; and (4) whether

petitioner is entitled to head of household filing status.

                         FINDINGS OF FACT

     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 her

petition, petitioner resided in Texas.

     During 2005 petitioner was single and lived with her sister

and her sister’s two children.    In 2005 the children, ALG and

YEG,1 were 7 and 11 years old, respectively.   Both ALG and YEG

were born in Texas.   Petitioner’s sister was divorced from the

children’s father, and neither petitioner, petitioner’s sister,

ALG, nor YEG had had any contact with him since 2002.    ALG and

YEG did not receive any support from their father.

     Petitioner worked as a school bus driver and school bus

monitor.   She earned approximately $1,100 per month.

Petitioner’s sister occasionally cleaned houses.    This was her

only source of income.

     Expenses incurred in supporting the occupants of the

household were paid by petitioner, petitioner’s sister, and

public aid.   Petitioner paid the mortgage, home insurance, and

half of the property taxes.   Petitioner’s sister paid the other


     1
        It is the policy of this Court to not identify minors.
We shall refer to petitioner’s nieces by using their initials.
Rule 27(a)(3).
                               - 3 -

half of the property taxes, the utility expenses, the cost of a

land line telephone in the home, and approximately 30 percent of

the costs of feeding the household.    Petitioner, petitioner’s

sister, ALG, and YEG also received public aid to support the

household.   The food stamps they received in 2005 paid 70 percent

of the costs of feeding the household.    The Medicaid program paid

for ALG and YEG to each receive two teeth cleanings in 2005.

Both petitioner and petitioner’s sister bought clothes for ALG

and YEG.   The costs of the mortgage and home insurance combined

accounted for over half of the expenses incurred in supporting

the household.

     Petitioner’s sister did not file a tax return in 2005.

Petitioner filed a tax return in 2005 claiming dependency

exemption deductions for ALG and YEG, claiming child tax credits

for ALG and YEG, claiming an earned income credit, and claiming

head of household status.   Respondent issued a notice of

deficiency which disallowed the dependency exemption deductions

for ALG and YEG, the child tax credit, the earned income credit,

and the head of household status.
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                               OPINION

     Petitioner has neither claimed nor shown that she satisfied

the requirements of section 7491(a)2 to shift the burden of proof

to respondent with regard to any factual issue.

I.   Dependency Exemption Deductions

     Section 151(c) allows taxpayers an annual exemption

deduction for each “dependent” as defined in section 152.     A

dependent is either a qualifying child or a qualifying relative.

Sec. 152(a).   The requirement is disjunctive, and, accordingly,

satisfaction of either the qualifying child requirement or the

qualifying relative requirement allows the individual to be

claimed as a dependent.    A qualifying child must meet the

following four statutory requirements:

     •   Relationship.--The individual (dependent) is a child of

         the taxpayer, descendant of a child of the taxpayer, a

         brother, sister, stepbrother, or stepsister of the

         taxpayer, or a descendant of any such relative.   Sec.

         152(c)(1)(A), (2).

     •   Residence.--The individual has the same principal place

         of abode as the taxpayer for more than one-half of such

         taxable year.   Sec. 152(c)(1)(B).




     2
        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.
                                 - 5 -

      •   Age.--The individual must not yet have attained the age

           of 19, or the individual is a student who has not yet

           attained the age of 24.   Sec. 152(c)(1)(C), (3)(A).

      •   Support.--The individual has not provided over one-half

           of such individual’s own support.    Sec. 152(c)(1)(D).

      Petitioner’s nieces satisfy the first three statutory

requirements.     ALG and YEG are descendants of petitioner’s

sister, and this satisfies the relationship test.       During 2005

ALG and YEG lived with petitioner for the entire year, and this

satisfies the residence test.     In 2005 ALG and YEG were ages 7

and 11, and this satisfies the age test.       In order for ALG and

YEG to each be a qualifying child, each must meet the support

test in the statute.     We must now determine whether ALG provided

over one-half of her own support and whether YEG provided over

one-half of her own support.     See sec. 152(c)(1)(D).

      A taxpayer must establish the total cost of monetary

“support” expended on behalf of a claimed dependent from all

sources for the relevant year.       Sec. 1.152-1(a)(2)(i), Income Tax

Regs.     The term “support” includes items such as “food, shelter,

clothing, medical and dental care, education, and the like.”

Id.   To determine whether an individual provided more than half

of the support for himself or herself, the amount of support

provided by the individual is compared to the individual’s total

amount of support.     Sec. 1.152-1(a)(2)(ii), Income Tax Regs.
                                   - 6 -

       Petitioner credibly testified as to the amount of total

support received by ALG and YEG and the sources of such support.

Petitioner, her sister, public aid (in the form of food stamps),

and Medicaid provided support for ALG and YEG in 2005.      We find

that neither ALG or YEG provided over half of the total amount of

support that each received.      Both ALG and YEG satisfy the support

test and are qualifying children.      Accordingly, we conclude that

petitioner is entitled to dependency exemption deductions in 2005

for ALG and YEG.

II.    Child Tax Credits

       A taxpayer may claim a child tax credit for “each qualifying

child”.    Sec. 24(a).     A qualifying child for purposes of section

24 is a “qualifying child” as defined in section 152(c) who has

not attained the age of 17.      Sec. 24(c)(1).   We concluded supra

that each of petitioner’s nieces, ALG and YEG, is a qualifying

child of petitioner for purposes of section 152(c).      Accordingly,

ALG and YEG are qualifying children for purposes of section

24(a).    Therefore we conclude that in 2005 petitioner is entitled

to a child tax credit for both ALG and YEG.

III.    Earned Income Credit

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

income credit against the individual’s income tax liability.

Section 32(c)(1)(A) defines an “eligible individual” as either

“any individual who has a qualifying child for the taxable year”
                                  - 7 -

or any individual who does not have a qualifying child and who

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

v. Commissioner, T.C. Memo. 2002-226.      A qualifying child is

defined as an individual who satisfies the relationship test in

section 152(c)(1)(A),(2), the residency test in section

152(c)(1)(B), and the age test in section 152(c)(1)(C),(3).        Sec.

32(c)(3).

      We concluded supra that ALG and YEG are qualifying children

for purposes of section 152(c) and each satisfied the

relationship test, the residency test, and the age test contained

in section 32(c)(1).      Accordingly, we conclude that petitioner is

an eligible individual for purposes of section 32(a)(1) because

petitioner has the qualifying children ALG and YEG.     Sec.

32(c)(1)(A)(i).   As a result, petitioner is entitled to claim an

earned income credit in 2005.

IV.   Head of Household

      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

at the close of the taxable year and maintains as her home a

household that constitutes for more than one-half of the taxable

year the principal place of abode of a qualifying child of the

individual as defined in section 152(c).     Sec. 2(b)(1)(A)(i).    An
                                 - 8 -

individual is considered as maintaining a household if over half

of the cost of maintaining the household during the taxable year

is furnished by such individual.    Sec. 2(b)(1).

     Petitioner is not married and maintains a household because

petitioner furnishes over half of the cost of maintaining the

household.   As we have determined, ALG and YEG are qualifying

children of petitioner as defined in section 152(c).

Accordingly, petitioner qualifies as a head of household for

2005.

     To reflect the foregoing,


                                              Decision will be entered

                                         for petitioner.
