                  T.C. Summary Opinion 2004-111



                     UNITED STATES TAX COURT



                 RALPH W. VARNER, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 19249-02S.            Filed August 24, 2004.


     Ralph W. Varner, pro se.

     Carina J. Campobasso, for respondent.



     DEAN, 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.   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.
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     Respondent determined a deficiency in petitioner's Federal

income tax of $4,355 for 2001.    The issues for decision are:

(1) Whether petitioner is entitled to dependency exemption

deductions, (2) whether petitioner is entitled to head of

household filing status, and, (3) whether petitioner is entitled

to an earned income credit.

                              Background

     Some of the facts have been orally stipulated and are so

found.    The stipulations of fact are incorporated herein by

reference.    Petitioner resided in Manchester, New Hampshire, at

the time the petition was filed.

     Petitioner and Patricia Johnson (Ms. Johnson) have two

children, Nicholas and Nicole Johnson (the children).     Petitioner

and Ms. Johnson were never married.      Each week petitioner had $25

withheld from his paycheck and sent to Ms. Johnson for support of

the children.    He also provided Ms. Johnson with an additional

$1,350 "just to help her out."

     Petitioner and Ms. Johnson lived apart at all times during

2001.    The children live with Ms. Johnson and her partner.

     Petitioner's children stayed with him every weekend and

during those visits he provided food and shelter.     Petitioner

also purchased clothing and provided medical and dental insurance

for the children.    However, petitioner did not provide respondent
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with any receipts that evidenced the amount of clothing or

insurance expenses he incurred.

                             Discussion

      The Commissioner's deficiency determinations in the notice

of deficiency are presumed correct, and generally taxpayers bear

the burden of proving that the Commissioner's determinations are

incorrect.    Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115

(1933).   In some cases, however, the burden may shift to the

Commissioner under section 7491(a).     Section 7491 does not apply

here because petitioner has failed to comply with the

requirements of section 7491(a).

1.   Dependency Exemption Deductions

      In general, section 151(c) allows a taxpayer to deduct an

exemption amount for each "dependent" as defined in section 152.

A dependent is defined as a son or daughter of the taxpayer "over

half of whose support, for the calendar year in which the taxable

year of the taxpayer begins, was received from the taxpayer (or

is treated under subsection (c) or (e) as received from the

taxpayer)."   Sec. 152(a).

      The Court has previously held that section 152(e), Support

Test in Case of Child of Divorced Parents, applies to cases

where the child's parents have never been married.     King v.

Commissioner, 121 T.C. 245, 251 (2003).     In the case of a child

of parents who live apart at all times during the last 6 months
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of the calendar year, section 152(e)(1) provides as a general

rule that the child shall be treated as receiving over half of

his or her support during the calendar year from the parent

having custody for the greater portion of the calendar year (the

custodial parent).   Although there are exceptions to this general

rule, none of the exceptions apply to the present case.     See sec.

152(e)(2), (3), and (4).

     As relevant herein, section 1.152-4(b), Income Tax Regs.,

provides that when there is no decree or agreement establishing

who has custody, the parent who has "physical custody of the

child for the greater portion of the calendar year" will be

deemed to be the custodial parent.

     There is no evidence in the record that there was a custody

agreement between petitioner and Ms. Johnson.    In the absence of

a custody agreement, the Court must look to the division of

physical custody.    Id.   Petitioner testified that his children

spent the weekends with him and the weekdays with their mother.

Because Ms. Johnson had physical custody of the children for a

greater portion of the calendar year, she is deemed to be the

custodial parent, not petitioner.    Therefore, petitioner is not

entitled to the dependency exemption deduction for either of the

children.   In light of the foregoing, the Court sustains

respondent's determination on this issue.
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2.   Head of Household Filing Status

      Section 1(b) imposes a special tax rate on individuals

filing as head of household.      As relevant herein, section 2(b)

defines a "head of household" as an unmarried individual who

maintains as his home a household that for more than one-half of

the taxable year constitutes the principal place of abode of a

person who is an unmarried son or daughter.      See sec.

2(b)(1)(A)(i).

      The Court has determined that Ms. Johnson had physical

custody of the children for a greater portion of the calendar

year.   That holding is dispositive of this issue, and, as a

result, the Court sustains respondent's determination that

petitioner is not entitled to claim head of household filing

status for 2001.

3.   Earned Income Credit

      Section 32(a) provides for an earned income credit in the

case of an eligible individual.      As relevant to this case, an

"eligible individual" is defined as an individual who has a

"qualifying child" for the taxable year.      Sec. 32(c)(1)(A)(i).

      To be a qualifying child, an individual must, inter alia,

have the same principal place of abode as the taxpayer for more

than half of the taxable year.      Sec. 32(c)(3)(A)(ii).   However,

as previously discussed, petitioner's children spent less than

half of 2001 with him.      Consequently, it cannot be said that

petitioner's residence was the children's principal place of
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abode for more than half of the year.

     An individual, however, may be eligible for an earned income

credit even if the individual does not have a qualifying child

for the taxable year.   Sec. 32(c)(1)(A)(ii).   Such an individual

generally would be eligible only if the individual's modified

adjusted gross income were less than $10,710.    See Rev. Proc.

2001-13, sec. 3.03(1), 2001-1 C.B. 337, 339.    The parties did not

provide a copy of petitioner's tax return for 2001 that would

allow the Court to determine his adjusted gross income for the

year and petitioner's eligibility for an earned income credit

without a qualifying child.   If petitioner's income is less than

the earned income limit amount, the credit should be reflected in

a computation of the decision.

     Reviewed and adopted as the report of the Small Tax Case

Division.


                                                Decision will be

                                         entered under Rule 155.
