                  T.C. Summary Opinion 2005-166



                     UNITED STATES TAX COURT



                LORENZO D. HARRIS, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 3333-04S.             Filed November 10, 2005.


     Lorenzo D. Harris, pro se.

     James R. Rich, 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 $3,558 for the taxable year 2002.

     After concessions,1 the issues for decision are:    (1)

Whether petitioner is entitled to claim a dependency exemption

deduction for KH;2 (2) whether petitioner is entitled to head-of-

household filing status; (3) whether petitioner is entitled to an

earned income credit; and (4) whether petitioner is entitled to a

child tax 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

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

this case.

     In April of 1999, petitioner and Felecia Ann Harris (Ms.

Harris) were married.   Ms. Harris had two children from prior

relationships.   Petitioner and Ms. Harris had a child, KH, in

April of 2002.   KH is the only child at issue in the case at bar.

     Petitioner and Ms. Harris separated in June of 2002.

However, they never formally divorced.    In fact, at the time of




     1
      At trial, petitioner conceded that he was not entitled to
the Hope Scholarship Credit pursuant to sec. 25A, which he had
claimed on his 2002 Federal income tax return.
     2
      The Court uses only the minor child’s initials.
                              - 3 -

trial, petitioner and Ms. Harris had reconciled and were living

together again as husband and wife.

     During taxable year 2002, petitioner was employed by Dillon

Yarn Corporation and Burley Management.   Dillon Yarn Corporation

issued to petitioner a Form W-2, Wage and Tax Statement, which

reflected wages earned of $23,678.72.   The record does not

contain a Form W-2 issued by Burley Management.    Although

petitioner did not pay child support to Ms. Harris during taxable

year 2002, he paid for health insurance for KH during taxable

year 2002.

     Ms. Harris filed a Form 1040, U.S. Individual Income Tax

Return, for the 2002 taxable year.    She did not claim KH as her

dependent on said return.

     On or about February 2, 2003, petitioner electronically

filed his Form 1040 for the taxable year 2002.    Petitioner filed

his 2002 Federal income tax return as a head of household and

claimed a dependency exemption deduction for KH.    Petitioner also

claimed an earned income credit with KH as the qualifying child,

a child tax credit with KH as the qualifying child, and a Hope

Scholarship Credit pursuant to section 25A.3   Additionally,

petitioner reported wage income of $25,813 and an adjusted gross

income of $25,813.


     3
      As previously noted, at trial petitioner conceded that he
was not entitled to the Hope Scholarship Credit pursuant to sec.
25A.
                                 - 4 -
     On December 5, 2003, respondent issued a notice of

deficiency denying petitioner:    (1) The claimed dependency

exemption deduction; (2) head-of-household filing status; (3) the

claimed earned income credit; (4) the claimed child tax credit;

and (5) the claimed Hope Scholarship Credit for taxable year

2002.    Further, respondent changed petitioner’s filing status to

single in the notice of deficiency.

                              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.’”4       Baker v. Commissioner, 122

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



     4
      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 -
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

issues in the case at bar.

      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 KH, which

respondent disallowed.

      Section 151 allows deductions for exemptions for dependents

of the taxpayer.    See sec. 151(c).    Section 152(a) defines the

term “dependent”, in pertinent part, to include a son or daughter

of the taxpayer over half of whose support for the calendar year

was received from the taxpayer.    “[S]upport” includes “food,

shelter, clothing, medical and dental care, education, and the

like.”   Sec. 1.152-1(a)(2)(i), Income Tax Regs.
                               - 6 -
     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

                    (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--
                                - 7 -
                     (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-

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

1984).

     Petitioner testified that KH resided with him after he and

Ms. Harris separated in June of 2002.    Petitioner did not offer

into evidence any documentation to substantiate his claim that KH

resided with him during the last 6 months of the taxable year

2002.    In fact, at trial, several documents were entered into

evidence as joint exhibits that would draw a contrary conclusion.

     Petitioner testified that during the last 6 months of 2002
                               - 8 -
he lived apart from Ms. Harris in his parents’ home.   Petitioner

further testified that KH resided with him in his parents’ home

along with his mother, father, and sister.   Petitioner testified

that Ms. Harris resided in their marital home which was

approximately 6 miles from his parents’ home.

     The record of this case contains a signed letter written by

petitioner’s mother, Barbara Harris.   This letter states that

petitioner paid her $150 per month for boarding expenses and that

“who all was living in the home at the time [was] Henry W. Harris

[petitioner’s father], Barbara M. Harris [petitioner’s mother],

and Bethany Harris [petitioner’s sister]”.   The letter does not

identify KH as a resident of petitioner’s parents’ household.

     Petitioner testified that he did not change his or KH’s

residency information on any formal documents when they moved in

with his parents in June of 2002 because he did not want to lose

insurance coverage for his wife or KH from his employer’s

insurance plan.

     Petitioner relies on his self-serving testimony to establish

that he was the custodial parent of KH for the taxable year 2002.

However, it is well established that we are not required to

accept self-serving testimony in the absence of corroborating

evidence.   Niedringhaus v. Commissioner, 99 T.C. 202, 212 (1992);

Tokarski v. Commissioner, 87 T.C. 74, 77 (1986).   Petitioner

failed to produce any corroborating evidence to support his
                                - 9 -
testimony.   In fact, petitioner’s mother’s letter contradicts

petitioner’s testimony that he was the custodial parent of KH.

Therefore, we conclude that petitioner has not established that

he was the custodial parent of KH for taxable year 2002.

Further, petitioner has not offered into evidence any document

that would constitute a valid written declaration under section

152(e)(2) releasing the claim to the dependency exemption

deduction with respect to KH.   Petitioner, therefore, is not

entitled to the dependency exemption deduction for taxable year

2002 with respect to KH.   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.   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, his parents’ home, constituted the principal place
                                - 10 -
of abode for KH for more than one-half of the taxable year.

Petitioner has not claimed that any other qualifying individual

resided in his household.    It follows, therefore, that petitioner

is not entitled to claim head-of-household filing status.

Accordingly, respondent’s determination on this issue is

sustained.

3.   Earned Income Credit

      As previously stated, petitioner claimed an earned income

credit for taxable year 2002 with KH 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

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),
                              - 11 -

                (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 KH for more

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

the residency test of section 32(c)(3)(ii).    Accordingly,

respondent’s determination on this issue is sustained.

4.   Child Tax Credit

      As previously stated, petitioner claimed a child tax credit

for taxable year 2002 with KH as the qualifying child.    In the

notice of deficiency, respondent disallowed the child tax credit.

      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).    As relevant here, a

“qualifying child” means an individual with respect to whom the

taxpayer is allowed a deduction under section 151.    Sec.

24(c)(1)(A).

      We have already held that petitioner is not entitled to the

dependency exemption deduction under section 151 for KH.

Accordingly, KH is not considered a “qualifying child” within the

meaning of section 24(c).   It follows, therefore, that petitioner
                               - 12 -
is not entitled to a child tax credit under section 24(a) with

respect to KH.

     In view of the foregoing, we sustain respondent’s

determination on this issue.

     Furthermore, we have considered all of the other arguments

made by petitioner, and, to the extent that we have not

specifically addressed them, we conclude they are without merit.

     Reviewed and adopted as the report of the Small Tax Case

Division.


                                    Decision will be entered

                               for respondent.
