                  T.C. Summary Opinion 2005-149



                     UNITED STATES TAX COURT



               JONATHAN W. BODIFORD, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 20105-03S.             Filed October 12, 2005.


     Jonathan W. Bodiford, pro se.

     Steven M. Webster, 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 $2,506 for the taxable year 2002.

     The issues for decision are:   (1) Whether petitioner is

entitled to claim a dependency exemption deduction for JTMZ;1 (2)

whether petitioner is entitled to head-of-household filing

status; and (3) whether petitioner is entitled to an earned

income credit for taxable year 2002.

                             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.    Petitioner resided in

Barnwell, South Carolina, on the date the petition was filed in

this case.

     Petitioner began dating Katrina Laird (Ms. Laird) sometime

during 1999.   At that time, Ms. Laird was separated from her

spouse but was not divorced.   Ms. Laird had a child from her

previous relationship.   Petitioner and Ms. Laird dated and lived

together, along with her child from the previous relationship,

for nearly 3 years.   Unbeknownst to Ms. Laird and petitioner, at

the time they began dating Ms. Laird was pregnant.    In 1999, Ms.

Laird gave birth to JTMZ.    Both Ms. Laird and petitioner believed

that JTMZ was their child.   Petitioner loved and cared for JTMZ

as if he were petitioner’s own child.     Petitioner and Ms. Laird


     1
      The Court uses only the minor child’s initials.
                                 - 3 -

had a child together, MLB, during their relationship.    At all

times, after birth, MLB lived with Ms. Laird.    MLB is not at

issue in the present case.   By the taxable year 2002, petitioner

and Ms. Laird parted company and no longer lived together.     They

did not implement a formal custody agreement when they parted

company.

     During 2002, petitioner worked part-time in construction and

resided in a trailer on his parents’ property.

     In 2004, Ms. Laird requested that petitioner take a DNA

paternity test to determine whether he was the father of JTMZ.

The DNA paternity test verified that petitioner was not the

father of JTMZ.

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

Individual Income Tax Return, for the taxable year 2002.    In his

2002 Federal income tax return, petitioner claimed JTMZ as his

dependent.   Petitioner also claimed head-of-household filing

status and an earned income credit with JTMZ as the qualifying

child.

     On September 10, 2003, respondent issued a notice of

deficiency denying petitioner:    (1) The claimed dependency

exemption deduction, (2) head-of-household filing status, and (3)

the claimed earned income credit for taxable year 2002.
                                - 4 -

                              Discussion

     In general, the Commissioner’s determination set forth in a

notice of deficiency is 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 petitioner”.    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 places the burden of proof on the Commissioner.       Sec.

7491(a)(1); Rule 142(a)(2).    Credible evidence is “‘the quality

of evidence which, after critical analysis, * * * [a] court would

find sufficient * * * to base a decision on the issue if no

contrary evidence were submitted.’”2       Baker v. Commissioner, 122

T.C. 143, 168 (2004) (quoting Higbee v. Commissioner, 116 T.C.

438, 442 (2001)).    Section 7491(a)(1) applies only if the

taxpayer complies with substantiation requirements, maintains all

required records, and cooperates with the Commissioner for

witnesses, information, documents, meetings, and interviews.

Sec. 7491(a)(2).    Although neither party alleges the

applicability of section 7491(a), we conclude that the burden of

proof has not shifted to respondent with respect to any of the


     2
      We interpret the quoted language as requiring the
taxpayer’s evidence pertaining to any factual issue to be
evidence the Court would find sufficient upon which to base a
decision on the issue in favor of the taxpayer. See Bernardo v.
Commissioner, T.C. Memo. 2004-199.
                               - 5 -

issues in the case at bar.   Therefore, petitioner bears the

burden of showing that he is entitled to claim a dependency

exemption deduction for JTMZ; that he is entitled to head-of-

household filing status; and that he is entitled to an earned

income credit for taxable year 2002.

      Moreover, deductions are a matter of legislative grace and

are allowed only as specifically provided by statute.    INDOPCO,

Inc. v. Commissioner, 503 U.S. 79, 84 (1992); New Colonial Ice

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

1.   Deduction for Dependency Exemption

      As previously stated, on his 2002 Federal income tax return,

petitioner claimed a dependency exemption deduction for JTMZ.

Respondent disallowed the deduction in the notice of deficiency.3

     Section 151 allows deductions for personal exemptions.

Besides providing exemptions for the taxpayer and, in certain

circumstances, the taxpayer’s spouse, section 151 provides

exemptions for dependents of the taxpayer.    See sec. 151(c).

Section 152(a) defines the term “dependent”, in pertinent part,




      3
      The notice of deficiency did not question the paternity of
JTMZ. Instead, the Commissioner, in the notice of deficiency,
denied petitioner the dependency exemption deduction, head-of-
household filing status, and the earned income credit because
petitioner did not establish that his residence constituted the
principal place of abode for JTMZ for more than one-half of the
taxable year, nor did petitioner substantiate that he provided
more than one-half of JTMZ’s support for taxable year 2002.
                                - 6 -

to include “A son or daughter of the taxpayer[4] * * * over half

of whose support, for the calendar year * * * was received from

the taxpayer”.   “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 one-

half of his or her support from the 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.   A special support

test applies to certain parents.   Section 152(e) provides:

          SEC. 152(e).   Support Test in Case of Child of Divorced
     Parents, Etc.--

               (1) Custodial parent gets exemption.--Except as
          otherwise provided in this subsection, if--

                      (A) a child (as defined in section 151(c)(3))
                 receives over half of his support during the
                 calendar year from his parents--

                           (i) who are divorced or legally
                      separated under a decree of divorce or
                      separate maintenance,

                           (ii) who are separated under a written
                      separation agreement, or

                           (iii) who live apart at all times during
                      the last 6 months of the calendar year, and



     4
      As previously noted, the Commissioner did not question the
paternity of JTMZ; therefore, we consider JTMZ to have met the
relationship test of sec. 152(a). We also consider JTMZ to have
met the age requirement of sec. 151(c).
                               - 7 -

                    (B) such child is in the custody of one or
               both of his parents for more than one-half of the
               calendar year,

     such child shall be treated, for purposes of subsection (a),
     as receiving over half of his support during the calendar
     year from the parent having custody for a greater portion of
     the calendar year (hereinafter in this subsection referred
     to as the “custodial parent”).

               (2) Exception where custodial parent releases
          claim to exemption for the year.--A Child of parents
          described in paragraph (1) shall be treated as having
          received over half of his support during a calendar
          year from the noncustodial parent if--

                    (A) the custodial parent signs a written
               declaration (in such manner and form as the
               Secretary may by regulations prescribe) that such
               custodial parent will not claim such child as a
               dependent for any taxable year beginning in such
               calendar year, and

                    (B) the noncustodial parent attaches such
               written declaration to the noncustodial parent’s
               return for the taxable year beginning during such
               calendar year.

     For purposes of this subsection, the term “noncustodial
     parent” means the parent who is not the custodial parent.

     If the requirements of section 152(e)(1) are met, the child

is treated as having received over half of his support from the

custodial parent, and the custodial parent is entitled to the

dependency exemption deduction.   The noncustodial parent can gain

entitlement to the deduction if the custodial parent executes a

valid written declaration under section 152(e)(2) releasing the

claim to the deduction.   The declaration may apply to 1 year, a

set number of years, or all future years.   Sec. 1.152-4T(a), Q&A-
                                - 8 -

4, Temporary Income Tax Regs., 49 Fed. Reg. 34459 (Aug. 31,

1984).

      Petitioner testified that JTMZ resided with him during the

entire taxable year 2002.    Petitioner did not offer into evidence

any documentation to substantiate his claim that JTMZ resided

with him during the taxable year 2002.    At trial, petitioner had

letters that were typed by Ms. Laird claiming that JTMZ resided

with petitioner during taxable year 2002.    These letters were

signed by Ms. Laird, petitioner’s minister, and petitioner’s

father.   However, these letters were never received into evidence

in this case.   On the basis of the record and the facts of the

present case, we find that petitioner did not substantiate that

JTMZ resided with him during the taxable year 2002.    Therefore,

we conclude that petitioner was not the custodial parent of JTMZ

for taxable year 2002.    We further conclude that the letter

signed by Ms. Laird, referred to above, does not constitute a

valid written declaration under section 152(e)(2) releasing the

claim to the deduction.    Petitioner, therefore, is not entitled

to the dependency exemption deduction for taxable year 2002 with

respect to JTMZ.   Secs. 151(a), (c), and 152(a).   Respondent’s

determination on this issue is sustained.

2.   Head of Household

      As previously stated, petitioner claimed head-of-household

filing status on his 2002 Federal income tax return, and
                               - 9 -

respondent changed the filing status to single in the notice of

deficiency.

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

individual filing as head of household.     As relevant herein,

section 2(b) defines a “head of household” as an unmarried

individual who maintains as his or her home a household which

constitutes for more than one-half of the taxable year the

principal place of abode of a child of the taxpayer.     Sec.

2(b)(1)(A)(i).

      As previously stated, petitioner is unable to establish that

his residence constituted the principal place of abode for JTMZ

for more than one-half of the taxable year.     Petitioner has not

claimed that any other individual resided in his household.       It

follows, therefore, that petitioner is not entitled to claim

head-of-household filing status.

3.   Earned Income Credit

      As previously stated, petitioner claimed an earned income

credit for taxable year 2002 with JTMZ as the qualifying child.

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.   Sec. 32(a)(1).    Earned income

includes wages.   Sec. 32(c)(2)(A).    Section 32(c)(1)(A)(i), in

pertinent part, defines an “eligible individual” as “any
                               - 10 -

individual who has a qualifying child for the taxable year”.    A

“qualifying child” is one who satisfies a relationship test, a

residency test, and an age test.   Sec. 32(c)(3).   The pertinent

parts of section 32(c)(3) provide:

     (3) Qualifying Child.--

          (A) In general.--The term “qualifying child” means,
     with respect to any taxpayer for any taxable year, an
     individual--

               (i) who bears a relationship to the taxpayer
          described in subparagraph (B),

               (ii) who has the same principal place of abode as
          the taxpayer for more than one-half of such taxable
          year, and

                (iii) who meets the age requirements of
           subparagraph (C).

     As previously stated, petitioner has not established that

his residence was the principal place of abode for JTMZ for more

than one-half of the taxable year 2002.   We find that JTMZ fails

the residency test of section 32(c)(3)(ii); therefore, we need

not, and do not decide whether he satisfies the relationship test

of section 32(c)(3)(B) or the age test under section 32(c)(3).

     Petitioner may, however, still qualify for an earned income

credit.   An individual who does not have a qualifying child may

be eligible under section 32(a) for an earned income credit,

subject to, among other things, phaseout limitations.

Merriweather v. Commissioner, T.C. Memo. 2002-226; Briggsdaniels

v. Commissioner, T.C. Memo. 2000-105, affd. 2 Fed. Appx. 848 (9th
                              - 11 -

Cir. 2001).   An individual who does not have a qualifying child

is eligible for an earned income credit if:   (1) The individual’s

principal place of abode is in the United States; (2) the

individual, or his or her spouse, has attained the age of 25 but

not the age of 65 at the close of the taxable year; and (3) the

individual is not a dependent for whom a deduction is allowed

under section 151.   Sec. 32(c)(1)(A)(ii).   Further, for the year

in issue, individuals who do not have any qualifying children and

whose earned income is $11,060 or greater are not entitled to an

earned income credit for that year.    See Rev. Proc. 2001-13, sec.

3.03(1), 2001-1 C.B. 337, 339.

     On this record, the Court is unable to determine whether

petitioner is eligible for an earned income credit under section

32(c)(1)(A)(ii).

                            Conclusion

     We hold that petitioner is not entitled to claim a

dependency exemption deduction for JTMZ for taxable year 2002.

Petitioner also is not entitled to head-of-household filing

status for taxable year 2002, or an earned income credit under

section 32(c)(1)(A)(i) for taxable year 2002.   Petitioner may

qualify for an earned income credit under section

32(c)(1)(A)(ii).
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    Reviewed and adopted as the report of the Small Tax Case

Division.


                                  Decision will be entered

                             under Rule 155.
