                  T.C. Summary Opinion 2002-27



                     UNITED STATES TAX COURT



               NORMA A. RAMIREZ-OTA, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 1951-00S.               Filed March 28, 2002.


     Norma A. Ramirez-Ota, pro se.

     Rachael J. Zepeda, 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 years in issue, and all Rule references are to the

Tax Court Rules of Practice and Procedure.
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     Respondent determined deficiencies in petitioner’s Federal

income taxes in the amounts of $4,118 and $4,394, for tax years

1997 and 1998, respectively.

     After concessions by respondent,1 the issues for decision

are (1) whether petitioner is entitled to head of household

status and (2) whether petitioner is entitled to the earned

income credit for the years in issue.

     Some of the facts in this case have been stipulated and are

so found.   The stipulation of facts and the exhibits received

into evidence at trial are incorporated herein by this reference.

At the time the petition was filed, petitioner lived in Tempe,

Arizona.

     During 1997, petitioner and her two minor daughters

(collectively the children) lived “on and off” in her former in-

laws’ home located at 3938 West Montebello, Tempe, Arizona

(Montebello residence).   Petitioner and her ex-husband divorced

in 1993, but “were trying to patch things up because of the

kids.”   Sometime during 1997, petitioner’s ex-husband was in a

car accident and was hospitalized.     Petitioner did not pay rent

to her former in-laws while she and her children stayed at the

Montebello residence.   However, petitioner testified that during


     1
          Respondent concedes that petitioner is entitled to two
dependency exemption deductions claimed for her minor daughters
in 1997 and 1998. Respondent further concedes that petitioner is
entitled to the child tax credit of $377 in 1998.
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1997 her former in-laws did not provide any other financial

assistance to her or the children.    During 1997, petitioner’s

former father-in-law worked for the State of Arizona Department

of Highways, and petitioner’s former mother-in-law was studying

to become a teacher.

     Despite the above, petitioner stipulated that during 1997

and 1998, she and her children lived in a 3-bedroom home located

at 1217 W. Manhattan, Tempe, Arizona (Manhattan residence), owned

by her brother, Esau Ramirez III (brother).    Petitioner’s

parents, Esau G. and Adelina B. Ramirez (parents), her brother,

and her younger sister also resided at the Manhattan residence.

While petitioner lived at the Manhattan residence, she paid a

monthly rent, including utilities, ranging from $110 to $120.      In

1998, petitioner paid the cable bill, approximately $47.56 per

month, for 7 months.

     During the years in issue, petitioner paid for the

children’s clothing, school supplies, and some food.    While at

the Montebello residence, petitioner’s former in-laws paid for a

majority of the food and groceries.    The record does not

establish the amount of utilities, mortgage payment, or other

expenses necessary to maintain the Montebello residence.      While

at the Manhattan residence, petitioner’s parents and her brother

paid for a majority of the food and groceries.    Petitioner’s

brother further testified, and petitioner did not dispute at
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trial, that monthly expenses, including the water bill of

approximately $50, the electricity bill of approximately $300,

the mortgage payments of $615, and the telephone bill of

approximately $50, were paid by either petitioner’s brother or

petitioner’s parents.

     Petitioner estimated her monthly expenses in 1997 and 1998

as follows:

     Car and insurance payments           $477.00
     Rent (including utilities)            120.00

Petitioner spent approximately $100 per child for school

clothing.   The record does not reflect the amount paid by

petitioner for her children’s school supplies.

     During the years in issue, petitioner was employed as a

clerk typist III at the Attorney General’s Office in Phoenix,

Arizona.    Both petitioner’s gross wage and adjusted gross income

for 1997 and 1998 were $14,622 and $14,838, respectively.

Petitioner filed her 1997 and 1998 Federal income tax returns as

head of household and claimed the earned income credits.

     Petitioner’s parents reported adjusted gross income for 1997

and 1998 of $21,116 and $31,411, respectively.      Petitioner’s

brother filed his Federal income tax returns as head of household

for the years in issue.

     Respondent determined that petitioner’s filing status was

single, not head of household, because she did not provide over
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half of the cost to maintain the household during the years in

issue.     Further, respondent disallowed the earned income credits

because petitioner’s parents also qualify to claim the earned

income credit for the children during the years in issue.

     Respondent’s determination is generally presumed to be

correct, and petitioner bears the burden of proving that it is

incorrect.    Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115

(1933).2

Head of Household Status

     According to the relevant part of section 2(b), an

individual shall be considered a head of household if such

individual (1) is not married at the close of the taxable year

and (2) maintains as her home a household which constitutes for

more than one-half of the taxable year the principal place of

abode of a person who is a dependent of the taxpayer, if the

taxpayer is entitled to a deduction for the taxable year for such

person under section 151.    An individual is considered as

maintaining a household only if she provides over half of the

cost of maintaining the household during the taxable year.    Sec.

2(b); Wooten v. Commissioner, T.C. Memo. 2000-54.

     2
          Respondent’s examination of petitioner’s case began
after July 22, 1998. However, since sec. 7491(a) does not alter
the taxpayer’s burden of proof where the taxpayer has not
complied with all applicable substantiation requirements, sec.
7491(a) does not apply in this case. Higbee v. Commissioner, 116
T.C. 438, 442 (2001).
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     In this case, petitioner was not married at the close of

1997 or 1998, and it is undisputed that the children stayed with

petitioner for more than one-half of the taxable year.   However,

petitioner has not established that she provided over half of the

cost of maintaining the household during each taxable year in

issue.

     The record is not clear as to where petitioner and her

children resided during 1997.   If we find that petitioner lived

with her former in-laws during most of 1997 at the Montebello

residence, petitioner would not prevail on this issue.   We have

no evidence as to the annual cost of maintaining this household;

i.e., mortgage payments, utility bills, telephone bills, food or

grocery bills, and other expenses relating to the household.

Sec. 1.2-2(d), Income Tax Regs.   Petitioner’s former in-laws did

not testify at trial.   See Briggsdaniels v. Commissioner, T.C.

Memo. 2001-321.

     Moreover, if we were to find that petitioner and her

children lived with her parents and siblings during most of 1997

at the Manhattan residence, the result would not change.

     Based upon the testimony at trial and the stipulation of

facts, the overall monthly household expenses of the Manhattan

residence for 1997 and 1998 were as follows:

          Mortgage                      $615
          Electricity                    300
          Water                           50
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          Cable                       48
          Phone                       50
          Total                   $1,063

Petitioner contributed approximately $110 to $120 per month in

rent and a portion of the utilities.3   Petitioner also

contributed to the household by paying the cable bill for 7

months in 1998.   However, based upon the total expenses for the

household in 1997 and 1998, it is clear that petitioner did not

provide more than half of the cost of maintaining the household.4

     Therefore, on the basis of the record, we hold that

petitioner is not entitled to file her 1997 and 1998 Federal

income tax returns as head of household.

Earned Income Credit

     The relevant parts of section 32 provide that an individual

is eligible for the earned income credit if the individual has a

qualifying child.   A “qualifying child” is a son or daughter of

the taxpayer who has not attained the age of 19 at the end of the

taxable year and shares the same principal place of abode in the

United States with the taxpayer for more than one-half of the


     3
          The record is unclear how this amount was calculated
for rent or utilities.
     4
          We also note that the list of household expenses is not
complete. The list does not include expenses for gas and other
utility charges, property taxes, upkeep and repairs, property
insurance, and food consumed on the premises. Sec. 1.2-2(d),
Income Tax Regs. The record is absent any evidence to support a
finding that petitioner contributed any amount of the listed
household expenses.
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taxable year.    Sec. 32 (c)(3).    Petitioner’s children are

qualifying children under the requirements of section 32(c)(3).

     However, even if a taxpayer meets all of the requirements

under section 32, she may not be eligible to claim the earned

income credit if there are two or more persons who are eligible

for the earned income credit with respect to the same qualifying

child.   In that situation, only the individual with the highest

modified adjusted gross income shall be treated as an eligible

individual with respect to the qualifying child.      Sec.

32(c)(1)(C).    In the instant case, the children are also

qualifying children of petitioner’s parents.

     On the other hand, for 1997 if petitioner and her children

lived with her former in-laws for most of the year, petitioner

failed to show that her adjusted gross income exceeded that of

her former in-laws.    Therefore, petitioner has not met her burden

in this scenario.

     In 1997 and 1998, petitioner’s parents had adjusted gross

income of $21,116 and $32,810, respectively.      Petitioner’s

adjusted gross income for the years in issue was $14,622 and

$14,852, respectively.    There is no dispute that petitioner’s

parents had the greater adjusted gross income during the years in

issue.

     Because petitioner has failed to show that she is entitled

to the earned income credits for the years in issue, respondent
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is sustained on this issue.   Sutherland v. Commissioner, T.C.

Memo. 2001-8.

     Reviewed and adopted as the report of the Small Tax Case

Division.

                                           Decision will be entered

                                      under Rule 155.
