                  T.C. Summary Opinion 2006-138



                      UNITED STATES TAX COURT



     GARY LYLE GIBSON AND MIRIAN JULIA ALVES, Petitioners v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 19638-05S.            Filed September 11, 2006.



     Gary Lyle Gibson, pro se.

     Brian A. Pfeifer, for respondent.



     JACOBS, 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.   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.   The decision to be

entered is not reviewable by any other court, and this opinion

should not be cited as authority.
                                - 2 -

     Respondent determined a $3,468 deficiency in petitioners’

2003 Federal income tax.    The issues for decision are:   (1)

Whether petitioners are entitled to dependency exemption

deductions for petitioner Gary Lyle Gibson’s (Mr. Gibson’s) three

minor children from a previous marriage; and (2) whether

petitioners are entitled to a nonrefundable child tax credit and

a refundable additional child tax credit with respect to each of

those children.

                              Background

     Some of the facts have been stipulated, and they are so

found.   The stipulation of facts and the attached exhibits are

incorporated herein by this reference.     At the time of filing the

petition, petitioners resided in Margate, Florida.

     Mr. Gibson has three children from a former marriage.       That

marriage was dissolved by a judgment of the Circuit Court of the

Eleventh Judicial Circuit of Florida in and for Miami-Dade County

on April 11, 2003.    As part of its judgment, the Florida circuit

court:   (1) Ordered shared parental responsibility for the three

children; and (2) ordered Mr. Gibson to pay child support of

$420.94 biweekly.    Additionally, the court designated Mr.

Gibson’s former wife the custodial parent.1   The judgment of the

Florida circuit court did not award either parent the right to


     1
      Mr. Gibson’s former wife was named the “primary residential
parent”, and Mr. Gibson was named the “secondary residential
parent.”
                               - 3 -

claim dependency exemption deductions for the children for

Federal income tax purposes.   The children resided with their

mother for the greater portion of 2003, the tax year in issue.

     Petitioners timely filed a joint Form 1040, U.S. Individual

Income Tax Return, for tax year 2003.    They claimed dependency

exemption deductions for the three children in the custody of Mr.

Gibson’s former spouse, as well as child tax credits and

additional child tax credits for those children.2    Petitioners did

not attach to their return a Form 8332, Release of Claim to

Exemption for Child of Divorced or Separated Parents, or other

written declaration by Mr. Gibson’s former spouse.

     Respondent determined that petitioners are not eligible for

the dependency exemption deductions claimed for the minor

children in the custody of Mr. Gibson’s former spouse, or for the

child tax credits or the additional child tax credits claimed for

those children.   Accordingly, respondent determined a $3,468

deficiency in tax for petitioners’ 2003 tax year and sent

petitioners a notice of deficiency.     Petitioners timely

petitioned this Court, alleging that they provided more than 50

percent of the children’s support during 2003 and are therefore

entitled to the claimed dependency exemption deductions, child

tax credits, and additional child tax credits.


     2
      Petitioners also claimed a dependency exemption deduction
with respect to a fourth child. Respondent does not challenge
the validity of that claim.
                               - 4 -

                            Discussion

     As a general rule, the Commissioner’s determinations in the

notice of deficiency are presumed correct, and the burden of

proving an error is on the taxpayer.     Rule 142(a); Welch v.

Helvering, 290 U.S. 111, 115 (1933).

     Custody is determined by the most recent divorce or custody

decree.   Sec. 1.152-4(b), Income Tax Regs.   A noncustodial parent

may be entitled to a dependency exemption deduction under section

151 if the noncustodial parent attaches to his or her tax return

a Form 8332 or similar written declaration, signed by the

custodial parent, stating that the custodial parent will not

claim the child as a dependent for the calendar year.    Sec.

152(e)(2); Miller v. Commissioner, 114 T.C. 184 (2000).

     The Florida circuit court’s judgment granted primary

physical custody to Mr. Gibson’s former wife.    Petitioners, as

noncustodial parents, did not attach to their 2003 return a Form

8332 or similar written declaration by Mr. Gibson’s former wife

that she would not claim the children as dependents.

     At trial, petitioners submitted a document entitled

“Establishment of Fact” in which they cited the provisions of

sections 151 and 152 but argued that these statutory provisions

are unconstitutional because biological fathers involved in

divorce typically do not obtain custody of their children when

the marriage ends and yet typically contribute more than 50
                                - 5 -

percent of their children’s support.3     Petitioners’ argument is

flawed.

     Before 1985, the custodial parent generally was treated as

having provided more than half of the support for each minor

child and was entitled to the dependency exemption deduction.

The noncustodial parent, however, was entitled to the dependency

exemption deduction if he or she provided $1,200 or more for the

support of the child and the custodial parent did not “clearly

establish” by a preponderance of the evidence that he or she

provided more than the noncustodial parent.     See sec. 152(e)

before amendment by the Deficit Reduction Act of 1984, Pub. L.

98-369, sec. 423(a), 98 Stat. 799.      This put the Internal Revenue

Service in the middle of conflicts between parents that were

“often subjective and [presented] difficult problems of proof and

substantiation.”   H. Rept. 98-432 (Part 2), at 1498 (1984).

     Congress amended section 152(e) and gave the dependency

exemption deduction to the custodial parent unless that parent

waives the right to claim it.   Id. at 1499.     Absent such a

waiver, under section 152(e)(1), in the case of a minor dependent

whose parents are divorced or separated and together provide over

half of the support for the minor dependent, the parent having

custody for the greater portion of the calendar year will


     3
       At trial, petitioners did not submit any evidence to
support their claim that they contributed more than 50 percent of
the children’s support.
                               - 6 -

generally be treated as providing over half of the support of the

minor dependent, and that parent will be entitled to the

dependency exemption deduction.

     It is well settled that deductions are a matter of

legislative grace, and taxpayers must satisfy the specific

statutory requirements for claimed deductions.   INDOPCO, Inc. v.

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

Helvering, 292 U.S. 435, 440 (1934).   This Court has in the past

rejected claims that the provisions of section 152 are

unconstitutional.   Caputi v. Commissioner, T.C. Memo. 2004-283.

Accordingly, we hold that for tax year 2003 petitioners are not

entitled to dependency exemption deductions for the three

children from Mr. Gibson’s previous marriage.

     Petitioners claimed child tax credits and additional child

tax credits for the three children who were claimed as

dependents.   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 an 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
                                - 7 -

who bears a relationship to the taxpayer as prescribed by section

32(c)(3)(B).   Sec. 24(c)(1).

     The child tax credit is a nonrefundable personal credit that

was added to the Internal Revenue Code by the Taxpayer Relief Act

of 1997, Pub. L. 105-34, sec. 101(a), 111 Stat. 796, with a

provision for a refundable credit, the additional child tax

credit, for families with three or more children.    For tax years

beginning after December 31, 2000, the additional child tax

credit provision was amended to remove the restriction that only

families with three or more children are entitled to claim the

credit.   See sec. 24(d)(1); Economic Growth and Tax Relief

Reconciliation Act of 2001, Pub. L. 107-16, sec. 201(c)(1), 115

Stat. 46.

     In the absence of other nonrefundable personal credits, a

taxpayer is allowed to claim a child tax credit in an amount that

is the lesser of the full child tax credit or the taxpayer’s

Federal income tax liability for the taxable year.   See sec.

26(a).

     If the child tax credit exceeds the taxpayer’s Federal

income tax liability for the taxable year, a portion of the child

tax credit may be refundable as an additional child tax credit

under section 24(d)(1).   For 2003, the additional child tax

credit is allowed in an amount that is the lesser of the

remaining child tax credit available or 10 percent of the amount
                                 - 8 -

by which the taxpayer’s earned income exceeds $10,500.     Sec.

24(d)(1)(A) and (B), (3); Rev. Proc. 2002-70, sec. 3.04, 2002-2

C.B. 845, 847.   The refundable and nonrefundable portions of the

child tax credit cannot exceed the total allowable amount of the

credit.

     Since petitioners are not allowed dependency exemption

deductions with respect to the children from Mr. Gibson’s former

marriage, they are not qualifying children.   Therefore,

petitioners are not entitled to claim child tax credits with

respect to those children.   Moreover, petitioners are not

entitled to claim additional child tax credits because they did

not qualify for child tax credits.

     To reflect the foregoing,



                                          Decision will be entered

                                     for respondent.
