                  T.C. Summary Opinion 2008-122



                       UNITED STATES TAX COURT



              TARSHA LATRICE MCCLAIN, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent


     Docket No. 14299-06S.               Filed September 16, 2008.


     Tarsha Latrice McClain, pro se.

     Lynette Mayfield, for respondent.



     WELLS, Judge:    This case was heard pursuant to the

provisions of section 74631 of the Internal Revenue Code in

effect at the time the petition was filed.   Pursuant to section

7463(b), the decision to be entered is not reviewable by any

other court, and this opinion shall not be treated as precedent

for any other case.




     1
      All 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.
                                -2-

     Respondent determined deficiencies in Federal income taxes

of $4,219 and $5,376 for petitioner’s 2004 and 2005 taxable

years, respectively.   The issues we must decide are:   (1) Whether

petitioner is entitled to two dependency exemption deductions for

two unrelated minor children for taxable years 2004 and 2005;

(2) whether petitioner is entitled to head of household filing

status for taxable years 2004 and 2005; (3) whether petitioner is

entitled to the earned income credit as an individual with

two unrelated children for taxable years 2004 and 2005; and

(4) whether petitioner is entitled to the additional child tax

credit for two unrelated minor children for taxable year 2005.

                            Background

     At the time of filing the petition, petitioner resided in

Arizona.

     For taxable year 2004 petitioner timely filed a Form 1040,

U.S. Individual Income Tax Return.    Respondent issued a notice of

deficiency with regard to petitioner’s 2004 taxable year in which

respondent disallowed two dependency exemption deductions, head

of household filing status, and an earned income credit on the

basis of two qualifying children.

     For taxable year 2005 petitioner timely filed a Form 1040.

Respondent issued a notice of deficiency with regard to

petitioner’s 2005 taxable year in which respondent disallowed two

dependency exemption deductions, head of household filing status,
                                -3-

an earned income credit on the basis of two qualifying children,

and an additional child tax credit on the basis of two qualifying

children.

     BJ,2 born March 20, 1995, and CJ, born March 10, 1996, are

minor children of Penny Freeman (Ms. Freeman).   Petitioner is not

related to BJ or CJ.   BJ and CJ were not at any time placed with

petitioner by a court or authorized placement agency.   During the

years in issue, BJ and CJ lived with Ms. Freeman at all times.

At the beginning of 2004 petitioner lived with Ms. Freeman and

Ms. Freeman’s children, BJ and CJ, in Memphis, Tennessee.     During

part of 2004 petitioner provided health insurance for, inter

alia, BJ and CJ, through her employer.

     On August 9, 2004, BJ and CJ withdrew from Memphis City

Schools in order to move to Arizona with Ms. Freeman.   Petitioner

did not move with Ms. Freeman and her children but instead

remained in Memphis.

     On December 7, 2004, petitioner moved to a residential

hotel in Tempe, Arizona, with Ms. Freeman and her children.    On

July 30, 2005, petitioner and Ms. Freeman jointly rented a home

in Phoenix, Arizona, for $966.51 per month, including trash

removal.




     2
      The Court refers to minor children by their initials.    Rule
27(a)(3).
                                  -4-

                             Discussion

Dependency Exemption Deductions

     In order to be entitled to dependency exemption deductions,

petitioner must prove that she meets the provisions of sections

151 and 152.3   Because sections 151 and 152 were amended,4 the

law is different for 2004 and 2005.     We discuss each taxable year

in turn.

     Taxable Year 2004

     For 2004 section 151(c)(1) provides that an exemption is

allowed for each person who is a dependent of a taxpayer if the

following requirements are met:    (a) The individual for whom an

exemption is claimed is a U.S. citizen who is a dependent (as

defined in section 152), which includes a son, daughter, stepson,

stepdaughter, sibling, parent or other ancestor, stepparent,

niece, nephew, aunt, uncle, certain relatives-in-law, or an

individual other than the taxpayer’s spouse, who, for the taxable

year of the taxpayer, has as his principal place of abode the

home of the taxpayer and is a member of the taxpayer’s household;




     3
      Petitioner has not raised sec. 7491 and therefore it does
not apply. Consequently, petitioner bears the burden of proof.
See Rule 142(a).
     4
      The Working Families Tax Relief Act of 2004, Pub. L. 108-
311, sec. 206, 118 Stat. 1176, amended sec. 151, effective for
tax years beginning after Dec. 31, 2004. The Working Families
Tax Relief Act of 2004, sec. 201, 118 Stat. 1169, amended sec.
152, effective for tax years beginning after Dec. 31, 2004.
                                -5-

(b) over one-half of the individual’s support for the taxable

year is received from the taxpayer; and (c) the individual’s

gross income is less than the exemption amount or the individual

is the taxpayer’s child who is younger than age 19 or is a

student younger than age 24.   Secs. 151(c), 152(a).

     Section 152(a)(9) requires that, to be entitled to a

dependency exemption deduction for a person not related to the

taxpayer, the taxpayer must show that the individual for whom the

dependency exemption deduction is sought has lived with them as

part of their household for the entire taxable year.

     Petitioner has failed to show that BJ and CJ resided with

her as part of her household for the entire year 2004.   The

Memphis City School records show that on August 9, 2004, BJ and

CJ withdrew from school in order to move.   They moved to Arizona

with their mother, while petitioner remained in Memphis.

Petitioner joined Ms. Freeman and the children in Arizona during

December 2004.   Accordingly, the two children in issue did not

live with petitioner as part of her household for the entire

year 2004.

     Petitioner must also show that she provided over one-half

of the support for the children during 2004.   See sec. 152(a).

     To be entitled to a deduction for a dependency exemption,

a taxpayer must establish the total support costs expended on

behalf of the claimed dependent from all sources for that year,
                                 -6-

and must demonstrate that they provided over one-half of that

amount.    Daya v. Commissioner, T.C. Memo. 2000-360; sec. 1.152-

1(a)(2)(i), Income Tax Regs.

     Petitioner has failed to establish and take into account the

full amount of income from all sources into her household for

2004 and the expenditure from those sources, and thus is unable

to establish whether or not any amounts of support provided by

her during 2004 constituted more than one-half of the support for

the claimed dependents.    Petitioner has not accounted for the

earnings of Ms. Freeman, if any, and the amount of any government

benefits that Ms. Freeman may have received.

     On the basis of the meager record in the instant case,

petitioner has failed to meet her burden of proof with regard to

the dependency exemptions for 2004.

     Taxable Year 2005

     For 2005, section 151(c) provides for dependency exemptions

for dependents as defined in section 152.    Section 152(a) defines

a dependent as either a “qualifying child” or a “qualifying

relative.”    A qualifying child is one who does not provide over

one-half of his support.    Sec. 152(c)(1)(D).

     Section 152(c) establishes four tests for a qualifying

child:    (1) The relationship test; (2) the principal place of

abode test; (3) the age test; and (4) the support test.    The age

test is not an issue.    The relationship test set forth in section
                                  -7-

152(c)(2) requires that a qualifying child be a child of the

taxpayer, a brother or sister of the taxpayer, a stepbrother or

stepsister of the taxpayer, or a descendant of any of these.

     Petitioner did not offer any evidence that the children in

issue are related to her.   Indeed, the parties stipulated that BJ

and CJ are not related to petitioner.   BJ and CJ are the children

of Ms. Freeman, with whom petitioner lived for part of 2004 and

all of 2005.

     Additionally, section 152(d)(1)(D) disallows a deduction for

a dependency exemption with regard to an individual who may be a

qualifying child of another taxpayer for the taxable year.

Petitioner has not established that BJ and CJ were not the

qualifying children of Ms. Freeman during all of 2005.

Accordingly, they cannot be individuals for whom a dependency

exemption is allowable to petitioner as an unrelated taxpayer.

     On the basis of the record, we hold petitioner is not

entitled to the two dependency exemption deductions she claimed

for taxable year 2005.

Head of Household Filing Status

     Taxable Year 2004

     As relevant here, to be entitled to file as a head of

household a taxpayer must be unmarried and not a surviving spouse

at the close of the tax year and must maintain as his home a

household which constitutes for more than one-half of the year
                                -8-

the principal place of abode, as a member of his household, of a

person for whom the taxpayer is entitled to a deduction for a

dependency exemption pursuant to section 151.   Sec.

2(b)(1)(A)(ii).   A taxpayer is considered as maintaining a

household only if over half of the cost of maintaining the

household during the taxable year is furnished by the taxpayer.

Sec. 2(b); Blanco v. Commissioner, 56 T.C. 512, 514-515 (1971).

     Petitioner has failed to offer evidence that BJ and CJ were

members of her household for the entire taxable year 2004.

Petitioner has not shown that she is entitled to the two

dependency exemption deductions for 2004.    Consequently,

petitioner is not entitled to head of household status for

taxable year 2004.

     Taxable Year 2005

     For 2005 the definition of “head of household” was amended

to require that, to be entitled to file as head of household, an

individual must maintain a home which constitutes for more than

one-half of the taxable year the principal place of abode of an

unmarried qualifying child, as defined in section 152(c), or the

principal place of abode for the entire year of any other person

who is a dependent of the taxpayer for whom the taxpayer is

entitled to a deduction under section 151.   Sec. 2(b)(1)(A).
                                 -9-

     The evidence shows that BJ and CJ are not related to

petitioner.    Accordingly, they fail the relationship test.   See

sec. 152(c).    Furthermore, petitioner cannot meet the

requirements of section 152(d)(1)(D), which disallows a

dependency exemption unless the taxpayer establishes that the

proposed dependent is not the qualifying child of another

taxpayer.   As discussed above, BJ and CJ may be qualifying

children of their mother, Ms. Freeman, with whom they lived for

the entire year 2005.    Moreover, petitioner failed to prove that

she provided more than one-half of the cost of maintaining a

household for BJ and CJ for taxable year 2005 as required by

section 2(b)(1).    Petitioner is therefore not entitled to file

as a head of household for 2005.

Earned Income Credit

     On each of her 2004 and 2005 returns petitioner claimed an

earned income credit based on BJ and CJ as qualifying children.

Section 32(c)(1)(A) provides that, for purposes of qualifying for

the earned income credit, an “eligible individual” is an

individual who has a qualifying child for the taxable year.5    A

“qualifying child” is defined as an individual’s child,

stepchild, sibling, step-sibling, a descendant of any of these,

or an eligible foster child (placed with the individual by an


     5
      Respondent concedes that without a qualifying child,
petitioner is entitled to an earned income credit of $112 for
taxable year 2004 only pursuant to sec. 32(c)(1)(A)(ii).
                                  -10-

authorized agency) whom the individual cares for as the

individual’s own child; who is under the age of 19; and who has

the same principal place of abode as the individual for more than

one-half of the taxable year.     Sec. 32(c)(3).

     Petitioner is not related to BJ or CJ and has produced no

evidence that they were placed with her by an authorized

placement agency.    BJ and CJ therefore are not qualifying

children for purposes of the earned income credit for the taxable

years in issue.

Additional Child Tax Credit

     Petitioner claimed an additional child tax credit on the

basis of BJ and CJ as qualifying children for taxable year 2005.6

Subject to limitations on the basis of adjusted gross income, a

taxpayer is allowed for the year a child tax credit with regard

to each qualifying child of the taxpayer.     Sec. 24(a).   A

portion of the child tax credit may be refundable as additional

child tax credit if the taxpayer has an unused child tax credit.

Sec. 24(d).

     For taxable year 2005 a qualifying child is defined as one

that meets the requirements of a qualifying child for purposes of

the dependency exemption pursuant to section 152(c) who has not

attained age 17.    Sec. 24(c).   BJ and CJ do not meet the



     6
      No additional child tax credit was disallowed by respondent
for taxable year 2004.
                                   -11-

relationship test of section 24(c)(1) and section 152(c)(1) and

(2).    Petitioner has not demonstrated that she is entitled to

dependency exemption deductions for BJ and CJ.        Accordingly, we

hold that petitioner is therefore not entitled to an additional

child tax credit for taxable year 2005 on the basis of BJ and CJ

as qualifying children.

       We have considered all of the parties’ arguments, and, to

the extent they are not discussed in this opinion, we conclude

that they are without merit, irrelevant, or unnecessary to reach.

       To reflect the foregoing,


                                               Decision will be entered

                                          under Rule 155.
