                  T.C. Summary Opinion 2001-181



                     UNITED STATES TAX COURT



                   JOSE CORONA, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 5097-00S.                 Filed December 10, 2001.



     Jose Corona, pro se.

     Peter C. Rock, for respondent.



     DINAN, 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
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effect for the years in issue, and all Rule references are to the

Tax Court Rules of Practice and Procedure.

     Respondent determined deficiencies in petitioner’s Federal

income taxes of $4,037 and $3,715 for the taxable years 1997 and

1998, respectively.

     The issues for decision are:   With respect to 1997 and 1998,

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

status; (2) whether petitioner is entitled to two dependency

exemption deductions; and (3) whether petitioner is entitled to

an earned income credit; and, with respect to 1998, (4) whether

petitioner is entitled to a child tax credit.

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

The stipulations of fact and the attached exhibits are

incorporated herein by this reference.   Petitioner resided in

Oakland, California, on the date the petition was filed in this

case.

     In both of the years in issue, petitioner filed a Federal

income tax return as a head of household.    He reported wage

income of $9,337 in 1997, and $19,616 in 1998.    In each year, he

claimed two dependency exemption deductions for Cathy Corona and

Jose Corona, Jr., and claimed the earned income credit with Cathy

and Jose as qualifying children who lived with him the entire

year.   In 1998, he claimed a child tax credit for Jose.
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     In the statutory notices of deficiency, respondent changed

petitioner’s filing status to single in each year and disallowed

the dependency exemption deductions and the credits.

     Among other requirements, a taxpayer generally is entitled

to a dependency exemption deduction for a child only if the

taxpayer provides over half of the child’s support during the

taxable year.   Sec. 151(a) and (c); sec. 152(a).

     Generally, a taxpayer is entitled to head of household

filing status only if the taxpayer maintains a household which is

the principal place of abode of an unmarried child.    Sec.

2(b)(1).

     Under section 24(a), a taxpayer is allowed a credit for each

qualifying child.   For purposes of section 24, a taxpayer’s child

is a qualifying child of the taxpayer only if the child is under

the age of 17 at the close of the taxable year and entitles the

taxpayer to a dependency exemption deduction.   Sec. 24(c)(1).

     Petitioner and his wife, Matilde Corona, separated in 1995;

whether they are still married is not established in the record.

Cathy and Jose are the children of petitioner and Ms. Corona and

were born in 1979 and 1985, respectively.   The only evidence

provided to support petitioner’s entitlement to the disallowed

deductions and credits is testimonial.   Petitioner testified that

Ms. Corona removed Jose from petitioner’s home against

petitioner’s will sometime in mid-1997, and that Jose remained
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with Ms. Corona until mid-1998 or possibly after the end of the

year.   Petitioner also testified that Cathy lived with petitioner

during all of 1997 and all of 1998, and that petitioner supported

Cathy during this time.    Ms. Corona, on the other hand, testified

that both Cathy and Jose lived with her and were supported by her

starting in September 1997 and throughout 1998.

     We do not find petitioner to be a credible witness because

by admitting that Jose did not live with him throughout all of

1997 and 1998, as indicated on his tax returns, he has admitted

that he provided false information on those returns.

Furthermore, petitioner’s testimony was contradicted by the

testimony of Ms. Corona, whom we find to be a more credible

witness.    We therefore accept Ms. Corona’s version of events.

     We find that Jose and Cathy lived with petitioner only until

August 1997, and that they lived with and were supported by Ms.

Corona after that time.    Petitioner is not entitled to a

dependency exemption deduction for either Cathy or Jose in 1998,

because they were not supported by him during that year.     Sec.

152(a).    Petitioner likewise is not entitled to a dependency

exemption deduction for either Cathy or Jose in 1997:    We do not

accept petitioner’s testimony that he supported the children

during 1997 for the reasons stated above and because petitioner’s

income level of $9,337 indicates the children likely had other

sources of income.    Because petitioner is not entitled to the
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dependency exemption deductions, he also is not entitled to head

of household filing status, sec. 2(b)(1), for 1998, or to a child

tax credit, sec. 24(c)(1), for either 1997 or 1998.    However,

because petitioner furnished over half the cost of maintaining

his home, we find that he is entitled to head of household status

for 1997, because Jose and Cathy lived with him for more than one

half of that year.

     Under section 32, an eligible individual is allowed a credit

which is calculated as a percentage of the individual’s earned

income, subject to certain limitations.    Sec. 32(a)(1).   Any

individual with a qualifying child is an eligible individual.

Sec. 32(c)(1).   An individual with qualifying children is

entitled to a larger credit than is an individual without

qualifying children.    Sec. 32(a) and (b).   As is relevant here,

the definition of a qualifying child for purposes of section 32

includes a child of a taxpayer who has the same principal place

of abode as the taxpayer for more than half of the taxable year.

Sec. 32(c)(3)(A).    A qualifying child either must be under the

age of 19 (or a student under the age of 24) at the close of the

taxable year, or be permanently and totally disabled at any time

during the year.    Sec. 32(c)(3)(C).

     Petitioner is not entitled to an earned income credit in

1998 because his income was too great and he had no qualifying
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children in that year while Cathy and Jose resided with Ms.

Corona.   Sec. 32(c)(3)(A).

     Respondent disallowed the earned income credit in 1997

solely because petitioner’s dependency exemption deductions had

been disallowed.   Qualification for a dependency exemption

deduction is not a prerequisite to being a qualifying child.

Sec. 32(c)(3).   Ms. Corona’s testimony established that

petitioner’s children Cathy and Jose lived with petitioner prior

to September 1997, which means they lived with petitioner more

than half of that year, and both Cathy and Jose were under the

age of 19 at the end of 1997.    We therefore hold that petitioner

is entitled to the earned income credit in 1997.

     Reviewed and adopted as the report of the Small Tax Case

Division.

     To reflect the foregoing,

                                         Decision will be entered

                                 under Rule 155.
