                    T.C. Summary Opinion 2004-43



                      UNITED STATES TAX COURT



         FRANCO ROBERT AND LINDA NOEL STONE, Petitioners v.
            COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 15004-03S.             Filed April 5, 2004.


     Franco Robert and Linda Noel Stone, pro sese.

     Robert S. Scarbrough, for respondent.



     ARMEN, Special Trial Judge:    This case was heard pursuant to

the provisions of section 7463 of the Internal Revenue Code in

effect at the time that the petition was filed.1   The decision to

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

should not be cited as authority.



     1
        Unless otherwise indicated, all subsequent section
references are to the Internal Revenue Code in effect for 2001,
the taxable year in issue.
                                 - 2 -

     Respondent determined a deficiency in petitioners’ Federal

income tax of $1,398 for the taxable year 2001.

     The issues for decision are: (1) Whether petitioners are

entitled to a dependency exemption deduction for petitioner’s

son, Shane Owen Stone (Shane).    (References to “petitioner” in

the singular are to petitioner Franco Robert Stone.)    We hold

that they are not.   (2) Whether petitioners are entitled to a

child tax credit for Shane.   We hold that they are not.

Background

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

found.   We incorporate by reference the parties’ stipulation of

facts and accompanying exhibits.    At the time that the petition

was filed, petitioners resided in Lakewood, Washington.

     Before his marriage to petitioner Linda N. Stone, petitioner

was married to Laurie F. Stone (Laurie).    Petitioner and Laurie

had two children, Shane, born June 29, 1986, and Christopher

Robert Stone, born May 12, 1975.

     On August 23, 1989, petitioner and Laurie were divorced

pursuant to a Decree of Dissolution of Marriage (divorce decree)

entered by the Pierce County Superior Court of the State of

Washington (the Superior Court).    In the divorce decree,

petitioner and Laurie were granted joint custody of the children.

The divorce decree made no provision for the payment of child

support.   With respect to the dependency exemption, the divorce
                               - 3 -

decree provided as follows:

          G. EXEMPTIONS. Each parent shall be entitled to
     claim one minor child as an exemption for IRS reporting
     purposes until the oldest is no longer dependent and
     then shall alternate for the youngest until no longer
     dependent. The other parent shall execute any
     appropriate forms for this purpose.

     Sometime in 1994, Laurie became unemployed and began to

receive financial assistance from the Aid For Dependent Children

(AFDC) program.   On November 17, 1994, the Superior Court issued

an Order of Child Support (order) directing petitioner to make

child support payments to Laurie on behalf of Shane.2   Both

petitioner and Laurie signed the order.   With respect to the

dependency exemption, the order provided as follows:

     3.16 INCOME TAX EXEMPTIONS: The father shall be
          entitled to the income tax dependency exemption
          for Shane Stone for so long as mother is
          unemployed, at which time the issue shall be
          reviewed by the court. [Emphasis added.]

At trial, petitioner testified that the intent of this paragraph

was that, in 1994, Laurie “was unemployed and it would be much

more beneficial” to petitioner to claim the dependency exemption

deduction.   This order was still in effect for the taxable year

2001.




     2
        Although the order did not modify custodial rights
concerning Shane, petitioner testified that Laurie obtained
custody of Shane because she needed to have a dependent in order
to receive AFDC payments.
                               - 4 -

     At trial, petitioner admitted that he was Shane’s

noncustodial parent during the year in issue.3   In 2001, Shane

resided with Laurie in South Olympia where he attended high

school.   At various times throughout the year, however, Shane

would freely visit petitioner in Tacoma, which was approximately

25 miles north of Olympia.   When asked by the Court whether

Laurie was employed or unemployed in 2001, petitioner replied:

“Honestly and truthfully, I don’t know.”

     Petitioners timely filed a joint Federal income tax return

for 2001.   On their return, petitioners claimed a dependency

exemption deduction and a child tax credit for Shane.

Petitioners attached a copy of the order to their return.

     In the notice of deficiency, respondent disallowed

petitioners’ claimed dependency exemption deduction and child tax

credit for Shane because:

     there is a stipulation in the Child Support Agreement.
     When there is a stipulation the custodial parent must
     sign a Form 8332 Release of Claim of Exemption for
     Child of Divorced or Separated Parents.

     Petitioners timely filed a petition with this Court

challenging the notice of deficiency.   In the petition,

petitioners state:   “ENTITLEMENT TO RELIEF - The Court Order from




     3
        In this opinion, we refer to the parent having physical
custody for the greater part of the year as the custodial parent
and to the parent who is not the custodial parent as the
noncustodial parent. See sec. 152(e).
                                 - 5 -

my divorce is clear that I am entitled to the exemption for

Shane.”4

Discussion5

     A.    Dependency Exemption Deduction

     In general, a taxpayer may deduct a dependency exemption for

a dependent over half of whose support is provided by the

taxpayer.     Secs. 151(a), (c)(1), 152(a).   In the case of divorced

or separated parents, however, special rules determine which

parent may claim a dependency exemption for a dependent.     See

sec. 152(e).     As relevant to the present case, section 152(e)(2)

allows the noncustodial parent to claim the dependency exemption

for a child if the custodial parent signs a written declaration

releasing his or her claim to the deduction, and the noncustodial

parent attaches the declaration to his or her tax return.

     The declaration required by section 152(e)(2) must be made

on either Form 8332, Release of Claim to Exemption for Child of

Divorced or Separated Parents, or on a statement conforming to



     4
        Notwithstanding the fact that petitioner refers,
interchangeably, to the divorce decree and the order, the parties
have proceeded as if the order is the controlling document
because it is the most recent court order concerning the
dependency exemption. We find nothing under the law of the State
of Washington to indicate to the contrary. Accordingly, we find
that the order controls the disposition of this case.
     5
        We decide this issue without regard to the burden of
proof. Accordingly, we need not decide whether the general rule
of sec. 7491(a)(1) is applicable in this case. See Higbee v.
Commissioner, 116 T.C. 438 (2001).
                              - 6 -

the substance of that form.   Miller v. Commissioner, 114 T.C.

184, 189 (2000); sec. 1.152-4T(a), Q&A-3, Temporary Income Tax

Regs., 49 Fed. Reg. 34459 (Aug. 31, 1984).    Form 8332 requires

the following information: (1) The name of the child or children;

(2) the applicable tax year or years; (3) the custodial parent’s

signature and the date of signature; (4) the custodial parent’s

Social Security number; (5) the noncustodial parent’s name; and

(6) the noncustodial parent’s Social Security number.    “The

exemption may be released for a single year, for a number of

specified years (for example, alternate years), or for all future

years, as specified in the declaration.”   Sec. 1.152-4T, Q&A-4,

Temporary Income Tax Regs., 49 Fed. Reg. 34459 (Aug. 31, 1984).

     In the instant case, petitioner admits that he was Shane’s

noncustodial parent during the taxable year 2001.    It follows,

therefore, that petitioners may be entitled to the dependency

exemption if they attached to their 2001 tax return a written

declaration as required under section 152(e)(2).    Petitioners

contend that the order, which they attached to their 2001 tax

return, constitutes a written declaration under Boltinghouse v.

Commissioner, T.C. Memo. 2003-134.    Accordingly, we must decide

whether the order constitutes a written declaration under section

152(e)(2).

     In Boltinghouse v. Commissioner, supra, the taxpayers

attached to their return a copy of a separation agreement, which
                               - 7 -

was signed by both the custodial and noncustodial parents.    The

separation agreement unconditionally granted the noncustodial

parent the dependency exemption.   The Court held that the

separation agreement met the requirements of a written

declaration under section 152(e)(2) because it conformed in

substance to Form 8332.

     Similar to the separation agreement in Boltinghouse v.

Commissioner, supra, petitioners contend that the order is signed

by the custodial parent.   Simply because the custodial parent

signed the order, however, does not end the analysis.    The order

must conform in substance to Form 8332.

     Unlike the separation agreement in Boltinghouse v.

Commissioner, supra, the order at issue is conditional; namely,

that petitioner “is entitled to the income tax dependency

exemption for Shane Stone for so long as mother is unemployed, at

which time the issue shall be reviewed by the court.”    (Emphasis

added.)   Consequently, this language creates an ambiguity as to

what tax years are applicable by limiting petitioner’s

entitlement to the dependency exemption upon the fulfillment of a

condition; namely, that Laurie is unemployed.6   Moreover, this

conditional requirement suggests that Laurie’s unemployment

status may change year-to-year, such that petitioner’s


     6
        We note that petitioners presented no evidence to the
Court, and had no knowledge, whether Laurie was unemployed in
2001.
                                 - 8 -

entitlement to the dependency exemption is subject to change each

year.     As such, the order does not conform in substance to Form

8332 because it fails to state with specificity the applicable

tax year or years for which petitioner is entitled to the

dependency exemption.

     Therefore, we find that the order does not constitute a

written declaration under section 152(e)(2).       Accordingly,

petitioners are not entitled to a dependency exemption deduction

for Shane in the taxable year 2001.7       Respondent’s determination

on this issue is sustained.

     B.     Child Tax Credit

     Section 24(a) provides that a taxpayer may claim a credit

for “each qualifying child”.     A qualifying child is defined,

inter alia, as any individual if “the taxpayer is allowed a

deduction under section 151 with respect to such individual for

the taxable year”.     Sec. 24(c)(1)(A).    For the reasons stated

above, petitioners may not claim a dependency exemption deduction

for Shane under section 151, and, therefore, they may not claim a

child tax credit.     Respondent’s determination on this issue is

sustained.


     7
        At trial, petitioner testified that he and Laurie had a
civil relationship, and he suggested that Laurie might be willing
to execute a Form 8332. For future tax returns, if Laurie were
to properly complete and execute a Form 8332 releasing her claim
to the dependency exemption, and if petitioners were to attach
such form to their return, then, at least for the taxable year or
years subject to such form, petitioners might succeed in avoiding
the issues that have arisen in the present case.
                                 - 9 -

     C.   Conclusion

     We have considered all of the other arguments made by the

parties, 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.

     To reflect the foregoing,

                                              Decision will be

                                         entered for respondent.
