                  T.C. Summary Opinion 2010-66



                      UNITED STATES TAX COURT



                  EDWARD GREENE, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 5192-08S.              Filed June 1, 2010.



     Edward Greene, pro se.

     Deborah Mackay, 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.   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.   Unless otherwise indicated, subsequent

section references are to the Internal Revenue Code (Code) in
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effect for the year in issue, and all Rule references are to the

Tax Court Rules of Practice and Procedure.

     Respondent determined a deficiency of $4,751 in petitioner’s

2006 Federal income tax.   The four issues for decision are

whether petitioner is entitled to:      (1) Head of household filing

status; (2) a child tax credit; (3) the refundable portion of the

child tax credit; and (4) an earned income credit.

                             Background

     Some of the facts have been stipulated and are so found.

The stipulation of facts, a subsequent supplemental stipulation

of facts, and the attached exhibits are incorporated herein by

this reference.   At the time petitioner filed his petition he

resided in Illinois.

     Petitioner was 57 years old in 2006 and retired from his

career job.    In 2006 his income consisted of a taxable pension of

$9,690 and wages of $11,443 that he received as a part-time

security officer for the Chicago Board of Education.

     Petitioner had a longtime girlfriend named Elmond Brown who

turned 53 in 2006.   The trial record indicates, but is not

conclusive, that Elmond Brown lived with petitioner in his

apartment during 2006.   Elmond Brown’s sister, Linda Jean Hayes

(Ms. Hayes), died of brain cancer in 1994.     Ms. Hayes had a

daughter, Christina Hayes, who was 9 years old when Ms. Hayes

passed away.   Elmond Brown adopted her niece in November 1999,
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and Christina’s legal name became Christina Hayes Brown (Ms.

Brown).       As a result of petitioner’s relationship with Ms.

Brown’s adoptive mother, petitioner became a father figure to

her.       During trial he referred to Ms. Brown as his niece.

       Ms. Brown turned 20 in 2006.     She has a biological daughter

named A.C.,1 who was 2 years old in 2006.      During trial

petitioner referred to A.C. as his grandniece.       A.C.’s biological

father, who was 18 years old in 2006, was incarcerated starting

in 2005 for a period of 2-1/2 years.

       After A.C. was born, Ms. Brown lost her job and was in a

difficult financial position.       Because of Ms. Brown’s financial

situation, petitioner in 2005 began paying the monthly rent for a

studio apartment for Ms. Brown and A.C.       The apartment was around

the corner from petitioner’s three-bedroom apartment.         Too many

people were visiting Ms. Brown’s apartment and disturbing the

baby.      To remedy the situation Ms. Brown and A.C. moved into

petitioner’s apartment sometime in 2005, perhaps with Elmond

Brown already residing there.       Ms. Brown and A.C. continued to

reside with petitioner until March 2007 when they moved to

Mississippi to be near family.       Petitioner and Elmond Brown also

broke off their relationship around this time, suggesting that

she likely moved out of petitioner’s apartment as well.



       1
      The Court uses only the initials of minor children.         See
Rule 27(a)(3).
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     In 2006 Ms. Brown enrolled as a full-time student at

Westwood College, O’Hare Airport Campus, studying toward a degree

in medical insurance coding and billing.    She obtained

educational financial aid in 2006 totaling $9,126, consisting of

$6,426 in student loans and a Pell Grant of $2,700. On her

college application forms and on her forms for financial aid, Ms.

Brown listed Elmond Brown as her mother residing at petitioner’s

address.    Ms. Brown also listed petitioner’s address as her own

address on the same forms.

     During the summer of 2006 Ms. Brown worked at a traveling

carnival.   The record does not indicate the nature of her work,

whether she traveled outside of the area, or the amount of income

from that employment.    Throughout 2006 Ms. Brown received food

stamps and Medicaid.    She was enrolled in the Women in Crisis

(WIC) program but did not use the assistance provided by WIC.

Respondent stipulated that the Internal Revenue Service has no

record of a 2006 Federal income tax return for Ms. Brown, and

respondent confirmed that no third-party sources reported paying

her during 2006.

     Elmond Brown filed a Federal income tax return for 2006

reporting $9,120 of taxable income.     She claimed a full exemption

deduction for herself and one dependency exemption deduction.

The dependent was not Ms. Brown or A.C.
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     Instead of preparing his own return, for the first time

petitioner engaged a national tax return preparation firm to

complete his 2006 Federal income tax return.   The firm prepared a

Form 1040A, U.S. Individual Income Tax Return, for 2006,

reporting petitioner’s filing status as head of household and

reporting an associated standard deduction of $7,550.

Additionally, the return reflected dependency exemption

deductions for Ms. Brown and A.C., a child tax credit of $368 for

A.C., an additional child tax credit of $21 for A.C., and an

earned income credit of $3,206.    An attached schedule listed both

Ms. Brown and A.C. as qualifying children for the earned income

credit.

     In a notice of deficiency respondent disallowed both of

petitioner’s dependency exemption deductions, changed

petitioner’s filing status to single, and disallowed the child

tax credit, the additional child tax credit, and the earned

income credit.   Petitioner filed a petition with this Court

challenging all of the disallowances in the notice of deficiency.

Respondent answered, denying each of petitioner’s challenges.

     However, in respondent’s pretrial memorandum and in his

opening statement on the record, respondent stated that the only

issues to be decided were petitioner’s filing status and the tax

credits.   Respondent no longer contested petitioner’s two

dependency exemption deductions.   Accordingly, with respect to
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the two dependency exemption deductions, we deem that respondent

has abandoned or conceded the issue.    See Muserlian v.

Commissioner, T.C. Memo. 1989-493, affd. 932 F.2d 109 (2d Cir.

1991).

                           Discussion

     The Commissioner’s determination set forth in a notice of

deficiency is generally presumed correct, and the taxpayer bears

the burden of showing that the determination is in error.    Rule

142(a)(1); INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992);

New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934);

Welch v. Helvering, 290 U.S. 111, 115 (1933).    Petitioner does

not argue that he satisfied the elements for a burden shift, but

even if he did, we need not and explicitly do not decide the

issue because we resolve this case on the preponderance of the

evidence and not on an allocation of the burden of proof,

rendering the issue of burden moot.     See Knudsen v. Commissioner,

131 T.C. 185, 185-189 (2008); Cyman v. Commissioner, T.C. Memo.

2009-144.

     Petitioner contends that he is entitled to head of household

filing status, the child tax credit, the additional child tax

credit, and an earned income credit because he supported Ms.

Brown and A.C. throughout 2006, including allowing them to live

with him for the entire year.   We now turn to apply the law to

the facts of this case.
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I.   Dependency Exemption Deductions

      Because respondent has abandoned or conceded this issue, we

comment on the dependency exemption deductions solely for the

analysis of petitioner’s entitlement to the filing status and

credits at issue.    We begin by noting that in 2006, Ms. Brown and

A.C. did not bear with respect to petitioner any of the

qualifying family relationships detailed in the relationship

requirements for a qualifying child under section 152(c)(2).

Therefore, they were not petitioner’s qualifying children.

      Additionally, with respect to whether Ms. Brown and A.C.

were petitioner’s qualifying relatives, we note that section

152(d)(1)(D) provides that a qualifying relative may not be the

qualifying child of any other taxpayer.    In this instance, Ms.

Brown and A.C. appear to satisfy the requirements to be Elmond

Brown’s qualifying children.    They bore the right relationship

being, respectively, daughter and granddaughter; they appear to

have all resided together in petitioner’s apartment for all of

2006; they met the age requirement because Ms. Brown was age 20

while still a student in college; and furthermore, the record

establishes that neither Ms. Brown nor A.C. provided more than

one-half of her own support.    The fact that Elmond Brown did not

claim the two individuals as her dependents is not determinative

because Elmond Brown was not required to file an income tax

return for 2006.    See Notice 2008-5, 2008-1 C.B. 256.
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Accordingly, we find that Ms. Brown and A.C. were not

petitioner’s qualifying relatives for 2006.

II.    Filing Status

       The Code provides a favorable tax schedule for a taxpayer

who qualifies as a head of household.     See sec. 1(b).   A taxpayer

may file as a head of household if the taxpayer is not married at

the end of the year, is not a surviving spouse, and maintains a

home as the principal place of abode for a qualifying child or

any other person who is a dependent for more than one-half of the

taxable year.    Sec. 2(b)(1).   “Maintain” here means provide over

one-half of the cost of maintaining the household.      Id.   The

taxpayer bears the burden to prove entitlement to a filing status

more beneficial than single.     Smith v. Commissioner, T.C. Memo.

2008-229.    Because we have already found that petitioner had no

dependents in 2006 and because petitioner was unmarried at the

end of the year and was not a surviving spouse, his proper filing

status for 2006 is single.     See sec. 1(c).

III.    Child Tax Credit

       The Code allows for a credit to be taken against the tax

imposed for each taxable year with respect to each qualifying

child of the taxpayer.     Sec. 24(a).   A “qualifying child” means a

qualifying child of the taxpayer as defined in section 152(c) who

has not reached the age of 17.     Sec. 24(c).   Because petitioner

had no qualifying children in 2006, he may not claim a child tax

credit for A.C. for 2006.
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IV.    Additional Child Tax Credit

       The child tax credit discussed above can be a refundable

credit to the taxpayer.      Sec. 24(d).   An additional, refundable,

credit is available for a taxpayer who could not claim the full

child tax credit to offset his tax liability.      Since we have

already held that A.C. is not petitioner’s qualifying child and

thus petitioner does not qualify for the child tax credit,

petitioner is not entitled to the additional child tax credit for

2006.

V.    Earned Income Credit

       Individuals may be eligible for an earned income credit,

calculated as a percentage of earned income, if they meet certain

criteria.    Sec. 32(a)(1); Rowe v. Commissioner, 128 T.C. 13, 15

(2007).    The amount of the credit depends on the taxpayer’s

adjusted gross income, earned income, and the number of

qualifying children, if any, the taxpayer can claim.      Sec. 32.

Petitioner claimed both Ms. Brown and A.C. as qualifying children

for purposes of the earned income credit.      We have already held

that Ms. Brown and A.C. are not his qualifying children.

Therefore, petitioner may not claim them as qualifying children

for purposes of the earned income credit.

       Nonetheless, a taxpayer who does not have qualifying

children may still be able to claim a smaller earned income

credit available for single taxpayers with no qualifying

children.    To be eligible for this reduced credit, the taxpayer
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may not have income exceeding a statutory ceiling.    Sec.

32(b)(2).   In 2006 the ceiling was $12,120, measured against the

greater of the taxpayer’s earned income or adjusted gross income.

Sec. 32(j) (providing for an inflation adjustment); Rev. Proc.

2005-70, sec. 3.06(1), 2005-2 C.B. 979, 982 (pronouncing the

specific ceiling for 2006).

      For purposes of the earned income credit, the law does not

consider pensions as constituting earned income.   Sec.

32(c)(2)(B)(ii); Smith v. Commissioner, T.C. Memo. 1995-304; sec.

1.32-2(c)(2), Income Tax Regs.   As a result, for 2006

petitioner’s earned income, excluding the $9,690 pension, was

$11,443, and his adjusted gross income was $21,133.

      Therefore for 2006, because petitioner had no qualifying

children and because his adjusted gross income of $21,133 was

greater than the allowable income ceiling of $12,120, petitioner

is ineligible for the earned income credit.

VI.   Conclusion

      We commend petitioner, who is essentially retired and living

on a small income, for being so generous, supportive, and

protective of people who are not his blood relatives.

Summarizing for 2006, for the reasons stated above, petitioner is

entitled to dependency exemption deductions for Ms. Brown and

A.C., but the Code and administrative provisions render him

ineligible to claim head of household filing status, the child
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tax credit, the additional child tax credit, and the earned

income credit.

     To reflect our disposition of the issues,


                                        Decision will be entered

                                   under Rule 155.
