                   T.C. Summary Opinion 2007-2



                     UNITED STATES TAX COURT



              NATHAN ANDREW POEHLEIN, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 9549-04S.               Filed January 3, 2007.


     Nathan Andrew Poehlein, pro se.

     Russell D. Pinkerton, 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.
                                   - 2 -

       Respondent determined a deficiency in petitioner’s Federal

income tax of $4,600 for the taxable year 2002.       The issues for

decision are:       (1) Whether petitioner is entitled to dependency

exemption deductions for his children, AP and GP;1 (2) whether

petitioner is entitled to head-of-household filing status; and

(3) whether petitioner is entitled to an earned income credit.2

                                Background

       This case was submitted fully stipulated pursuant to Rule

122.       The stipulation of facts, supplemental stipulation of

facts, and the attached exhibits are incorporated herein by this

reference.       At the time the petition was filed, petitioner

resided in Cannelton, Indiana.

       Petitioner and Kelly Harpe have two children, their son AP

and their daughter GP (collectively, “the children”).       Petitioner

and Ms. Harpe have never been married.       By order of the Perry

County, Indiana Circuit Court entered February 20, 1996,

paternity of petitioner for AP was established, and petitioner

was ordered to pay $50 per week in child support.       Petitioner’s



       1
           The Court uses only the minor children’s initials.
       2
       In a section of the notice of deficiency titled
“Explanation of Items”, respondent disallowed petitioner a child
tax credit. Petitioner, however, did not claim a child tax
credit on his return. Furthermore, the purported adjustment is
not reflected in respondent’s calculation of the deficiency,
which is contained in a separate section of the notice. Because
the purported adjustment does not affect the amount of tax at
issue, we do not address this matter further.
                                - 3 -

paternity for GP was established by order of the Hancock District

Court, Commonwealth of Kentucky, entered August 13, 2003.3

Petitioner was ordered to pay $65 per week in child support.

     In 2002, AP and GP lived with Ms. Harpe in government

housing in Kentucky.   Petitioner worked in Indiana that year and

earned $15,372.87 of wage income.   Petitioner filed his 2002

Federal income tax return as a head of household and claimed a

dependency exemption deduction for each child.    Petitioner also

claimed an earned income credit with AP and GP as the qualifying

children.

     In March 2004, respondent issued a notice of deficiency

denying petitioner:    (1) The dependency exemption deductions; (2)

head-of-household filing status; and (3) the earned income

credit.   In computing the deficiency, respondent changed

petitioner’s filing status to single.

                             Discussion

     In general, the Commissioner’s determination set forth in a

notice of deficiency is presumed correct.    Rule 142(a)(1); Welch

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



     3
       The paternity of GP is not in question for the taxable
year 2002. Petitioner is the father.
                                - 4 -
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 upon

which to base a decision on the issue if no contrary evidence

were submitted’”.    Baker v. Commissioner, 122 T.C. 143, 168

(2004) (quoting Higbee v. Commissioner, 116 T.C. 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’s requests 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 this case.

      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.   Dependency Exemption Deductions

      Section 151 allows as a deduction an exemption for each

dependent of the taxpayer.    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”
                               - 5 -
includes “food, shelter, clothing, medical and dental care,

education, and the like.”   Sec. 1.152-1(a)(2)(i), Income Tax

Regs.

     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 * * * 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”).
                               - 6 -
               (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--

                    (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.

The support test in section 152(e) applies even if the child’s

parents have never been married.    King v. Commissioner, 121 T.C.

245, 248-252 (2003).

     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 required under section

152(e)(2) must be made either on a completed Form 8332, Release

of Claim to Exemption for Child of Divorced or Separated Parents,

or on a statement conforming to the substance of Form 8332.
                                 - 7 -
Miller v. Commissioner, 114 T.C. 184, 188-189 (2000), affd. on

another ground sub nom. Lovejoy v. Commissioner, 293 F.3d 1208

(10th Cir. 2002); Brissett v. Commissioner, T.C. Memo. 2003-310.

     The Form 8332 requires a taxpayer to furnish:    (1) The names

of the children for whom exemption claims were released; (2) the

years for which the claims were released; (3) the signature of

the custodial parent confirming his or her consent; (4) the

Social Security number of the custodial parent; (5) the date of

the custodial parent’s signature; and (6) the name and the Social

Security number of the parent claiming the exemption.     Miller v.

Commissioner, supra at 190.

     A.    Whether Section 152(e) Is Applicable

     As stated above, petitioner and Ms. Harpe have never been

married.    Section 152(e) therefore applies only if petitioner and

Ms. Harpe lived apart at all times during the last 6 months of

2002.   See sec. 152(e)(1)(A).   Living apart generally connotes

living in separate residences.     Dawkins v. Commissioner, T.C.

Memo. 1991-225.

     Petitioner contends that he generally stayed at his parents’

house from Sunday night through Thursday afternoon, but spent the

remainder of the week with Ms. Harpe and the children in

Kentucky.    There is no evidence to support his contention, and

the joint exhibits contradict his position.    A declaration by Ms.

Harpe states that petitioner did not live with her and the
                                - 8 -
children in Kentucky in 2002.    A form from the Office of Housing,

Federal Housing Commissioner, also indicates that petitioner did

not reside in the government housing unit with Ms. Harpe and the

children.   We find that petitioner and Ms. Harpe lived apart at

all times during the last 6 months of 2002.   Section 152(e)

therefore applies.4

     B.   Whether Petitioner Attached an Executed Form 8332 or a
          Comparable Statement to His 2002 Tax Return

     Ms. Harpe’s declaration indicates she had custody of the

children for the greater portion of 2002.   Petitioner does not

dispute this statement.   We therefore conclude that she is the

custodial parent for purposes of section 152(e).   See sec.

152(e)(1) (flush language).   Accordingly, petitioner may claim

the children as dependents only if he attached to his return a

Form 8332 or a comparable statement executed by Ms. Harpe.     See

Miller v. Commissioner, supra.

     Petitioner contends that he attached an executed Form 8332

to his 2002 tax return.   The record, however, contains no

evidence to support this contention.    A Form 8332 is not attached

to the copy of his return that was received as a joint exhibit.

Furthermore, Ms. Harpe’s declaration does not indicate that she


     4
       Assuming arguendo that petitioner and Ms. Harpe did live
together at some point during the last 6 months of 2002, the
result would not change. Under sec. 152(a), petitioner would
have to establish that he provided over half of AP’s and GP’s
support during 2002. The record contains no evidence that
petitioner meets this requirement with respect to either child.
                               - 9 -
executed a Form 8332 for either child.    We find that petitioner

did not attach a Form 8332 to his return.   Petitioner therefore

is not entitled to dependency exemption deductions for AP and GP

in 2002.   See secs. 151(a), (c), and 152(a).    Respondent’s

determination on this issue is sustained.

2.   Head-of-Household Filing Status

      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 did not live with Ms. Harpe

and the children in 2002.   Accordingly, petitioner is unable to

establish that his residence constituted the principal place of

abode for AP or GP for more than one-half of the taxable year.

Petitioner therefore is not entitled to head-of-household filing

status, and respondent’s determination on this issue is

sustained.

3.   Earned Income Credit

      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
                               - 10 -
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),

                 (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 AP or GP for

more than one-half of the taxable year 2002.      Accordingly, we

conclude that the children fail the residency test of section

32(c)(3)(A)(ii).    Respondent’s determination on this issue is

sustained.

     Reviewed and adopted as the report of the Small Tax Case

Division.
                        - 11 -
To reflect the foregoing,


                                 Decision will be entered for

                            respondent.
