                  T.C. Memo. 2003-78



                UNITED STATES TAX COURT



           LARRY ALLEN COATS, Petitioner v.
     COMMISSIONER OF INTERNAL REVENUE, Respondent



Docket No. 2283-01.             Filed March 18, 2003.



     For P’s 1998 taxable year, R disallowed P’s
claimed earned income credit, filing status as head of
the household, and dependency exemptions for two
children.

     Held: P is entitled to an earned income credit
for an individual with one qualifying child.



Larry Allen Coats, pro se.

Kathleen C. Schlenzig, for respondent.
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              MEMORANDUM FINDINGS OF FACT AND OPINION


     NIMS, Judge:     Respondent determined a Federal income tax

deficiency for petitioner’s 1998 taxable year.      A copy of the

statutory notice of deficiency is not in the record.      In his

petition, petitioner alleges that respondent determined a

deficiency in the amount of $1,350.      In his answer, respondent

admits this allegation.    Respondent disallowed an earned income

credit that was claimed by petitioner on his 1998 return.

Respondent also disallowed petitioner’s claimed filing status of

head of the household and claimed dependency exemptions for two

children.   At trial, respondent conceded that petitioner is

entitled to a dependency exemption for one child, and an earned

income credit for an individual with no qualifying children.        On

brief, respondent conceded that the resolution of petitioner’s

proper filing status has no income tax consequences and,

therefore, is moot.    After concessions, the issue remaining for

decision is whether petitioner is entitled to an earned income

credit for an individual with qualifying children.

     Unless otherwise indicated, all section references are to

sections of the Internal Revenue Code in effect for the year at

issue, and all Rule references are to the Tax Court Rules of

Practice and Procedure.
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                           FINDINGS OF FACT

     At the time the petition was filed in this case, petitioner

resided in Chicago, Illinois.

     Petitioner timely filed his Federal income tax return for

1998.   On his return, petitioner reported gross income of $3,364

and claimed an earned income credit for an individual with two

qualifying children.

     On Schedule EIC, Earned Income Credit (Qualifying Child

Information), attached to his 1998 return, petitioner listed

Laura Coats and Shawona Higgins as qualifying children.     The

mother of both Laura Coats and Shawona Higgins is Jeanette Bates.

Petitioner has never been married to Jeanette Bates.     Petitioner

is the biological father of Laura Coats.      Petitioner is not the

biological father of Shawona Higgins.    Petitioner never adopted

Shawona Higgins.   Laura Coats and Shawona Higgins were both under

the age of 19 on December 31, 1998.     Throughout 1998, petitioner

resided at 2603 West Potomac, Chicago, Illinois (petitioner’s

West Potomac residence).    Throughout 1998, Laura Coats and

Shawona Higgins attended Wentworth Elementary School.     Wentworth

Elementary School is located approximately 13 miles from

petitioner’s West Potomac residence.    School records reflect that

Laura Coats and Shawona Higgins lived at 6915 South Green (the
                                 - 4 -

South Green residence) during 1998.       The South Green residence

was the residence of Jeanette Bates.       Wentworth Elementary School

is located less than half a mile from the South Green residence.

                                OPINION

     Section 32(a) provides that an “eligible individual” may be

allowed an earned income credit equal to the credit percentage as

provided in section 32(b).     The term “eligible individual”

includes a taxpayer who has a qualifying child for the taxable

year.   Sec. 32(c)(1)(A)(i).    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 (residency requirement), and has not attained the

age of 19 as of the close of the calendar year (age requirement).

Sec. 32(c)(3).

     As relevant here, the relationship test is satisfied if the

child is a daughter of the taxpayer or an “eligible foster child”

of the taxpayer.   Sec. 32(c)(3)(B).      An “eligible foster child”

is an individual who the taxpayer cares for as the taxpayer’s own

child and who has the same principal place of abode as the

taxpayer for the entire taxable year.       Sec. 32(c)(3)(B)(iii).

     Respondent argues that petitioner had no qualifying children

in 1998.   Petitioner argues that Laura Coats and Shawona Higgins

were his qualifying children in 1998.       Respondent concedes that
                                 - 5 -

both Laura Coats and Shawona Higgins satisfied the age

requirement.   Respondent concedes that Laura Coats satisfied the

relationship test.

     Respondent argues that Laura Coats did not satisfy the

residency requirement.   Respondent contends that school records

reflect that Laura Coats lived at the South Green residence, not

petitioner’s West Potomac residence, during 1998.    Respondent

also contends that the distance between Wentworth Elementary

School and the South Green residence as compared to the distance

between Wentworth Elementary School and petitioner’s West Potomac

residence reflects that Laura Coats lived at the South Green

residence.

     Petitioner argues that Laura Coats satisfied the residency

requirement in 1998.   Petitioner testified that Laura Coats lived

at petitioner’s West Potomac residence for more than 9 months in

1998.   Petitioner testified that 1998 was a volatile year in the

neighborhood surrounding the South Green residence.    Petitioner

testified that as a result of that volatility, and out of concern

for the well-being of the children, Laura Coats and Shawona

Higgins lived with petitioner.    He further testified that “it

wouldn’t have been just to take them out of school.    We thought

it was best just to commute back and forth for their sake.”

     We find petitioner’s testimony credible.    We find

convincing petitioner’s explanation for the discrepancy between
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the school records and his testimony regarding where Laura Coats

lived during 1998.   Under these circumstances, we afford more

weight to his testimony than to the school records.

Consequently, we find that Laura Coats had the same place of

abode as petitioner for at least 9 months during 1998.       As a

result of this finding, we conclude that Laura Coats satisfied

the residency requirement.   Since respondent conceded that Laura

Coats also satisfied the age requirement and the relationship

test, Laura Coats was a qualifying child of petitioner for

purposes of an earned income credit for 1998.

     Respondent argues that Shawona Higgins did not satisfy the

residency requirement or the relationship test.      Regarding the

relationship test, petitioner admits that Shawona Higgins is not

his biological or adopted child.   Therefore, in order for Shawona

Higgins to be a qualifying child, she must satisfy the test for

an eligible foster child.    Petitioner admits that Shawona Higgins

did not live with him for the entire taxable year.        Consequently,

Shawona Higgins was not an eligible foster child of petitioner.

Since Shawona Higgins did not satisfy the relationship test, she

was not a qualifying child for purposes of an earned income

credit for 1998.

     To reflect the foregoing and respondent’s concessions,


                                             Decision will be entered

                                        under Rule 155.
