                          T.C. Memo. 2010-121



                       UNITED STATES TAX COURT



                    VIRGINIA BOBO, Petitioner v.
            COMMISSIONER OF INTERNAL REVENUE, Respondent



       Docket No. 2809-09.              Filed June 2, 2010.



       Virginia Bobo, pro se.

       Marshall R. Jones and John W. Sheffield, III, for

respondent.



               MEMORANDUM FINDINGS OF FACT AND OPINION


       THORNTON, Judge:   Respondent determined a $4,408 deficiency

in petitioner’s 2007 Federal income tax.    The issues for decision

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

exemption deduction for her niece; and (2) whether petitioner is

entitled to an earned income credit with respect to her niece and
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her sister.   Unless otherwise indicated, section references are

to the Internal Revenue Code in effect for the year in issue, and

Rule references are to the Tax Court Rules of Practice and

Procedure.

                         FINDINGS OF FACT

     When she filed her petition, petitioner resided in Alabama.

     Throughout 2007 petitioner lived in her house with her 20-

year-old niece and her 54-year-old sister.   Petitioner’s niece

was a full-time student until she graduated from high school on

May 19, 2007.   The niece worked part-time jobs, earning $6,000 to

$7,000 in 2007.   Petitioner’s sister was permanently and totally

disabled from various ailments, including congestive heart

failure.   During 2007 the sister received Supplemental Security

Income disability payments of $623 per month.

     During 2007 petitioner earned wages of $18,454, which she

used to support herself, her niece, and her sister.   Petitioner

provided her niece food and shelter and, in addition, paid for

her school supplies, clothing, and medical bills, which totaled

about $800 in 2007.   Petitioner’s grown son gave petitioner money

weekly or semiweekly, generally $50 to $150, to help support her

niece and her sister.

     On her 2007 Federal income tax return, petitioner claimed

dependency exemption deductions for her niece and her sister.

She also claimed an earned income credit on the basis of having
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two qualifying children; namely, her niece and her sister.     By

notice of deficiency respondent disallowed the dependency

exemption deduction as to petitioner’s niece.1   As explanation

for disallowing this deduction, the notice of deficiency states

that the niece had “gross income equal to or greater than the

exemption amount” and “was not a member of your household for the

entire tax year”.   In the notice of deficiency respondent also

disallowed the earned income credit on the ground that petitioner

had no qualifying child.

                              OPINION

     The taxpayer generally bears the burden of proving that the

Commissioner’s determinations are in error.   Rule 142(a)(1).     If

the taxpayer introduces credible evidence with respect to

relevant factual issues and meets other requirements, the burden

as to those factual issues may shift to the Commissioner.      Sec.

7491(a).   In addition, the Commissioner bears the burden of proof

as to any “new matter, increases in deficiency, and affirmative

defenses, pleaded in the answer”.   Rule 142(a)(1).   If the

Commissioner, attempting to sustain a deficiency, advances a new

theory that either alters the original deficiency or requires



     1
      The notice of deficiency did not disallow the dependency
exemption deduction that petitioner claimed for her sister.
Although in this proceeding respondent seems to suggest that this
dependency exemption deduction should be disallowed, he has not
asserted any increased deficiency with respect to this matter.
Consequently, we need not consider this issue further.
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presentation of different evidence, the Commissioner bears the

burden of proof as to this new matter.    Shea v. Commissioner, 112

T.C. 183, 191 (1999); Wayne Bolt & Nut Co. v. Commissioner, 93

T.C. 500, 507 (1989).

I.   Dependency Exemption Deduction

     A taxpayer may claim a dependency exemption deduction with

respect to an individual who is either a “qualifying child” or a

“qualifying relative”.   Secs. 151(c), 152(a).   To be a taxpayer’s

“qualifying child”, an individual must:   (A) Bear a qualifying

relationship to the taxpayer; (B) have the same principal place

of abode as the taxpayer for more than one-half of the taxable

year; (C) meet certain age requirements; and (D) have not

provided over one-half of his or her own support for the year.2

Sec. 152(c)(1).

     There is no dispute that petitioner’s niece satisfies the

relationship requirement to be a “qualifying child”.   See sec.

152(c)(2)(B).   In addition, because petitioner’s niece was not

yet 24 at the close of 2007 and was a full-time high school

student during each of 5 months during 2007, she meets the age


     2
      To be a taxpayer’s “qualifying relative”, the individual
must: (A) Bear a qualifying relationship (defined more broadly
than for a qualifying child) to the taxpayer; (B) have gross
income for the year less than the exemption amount; (C) have had
more than one-half of his or her support for the year provided by
the taxpayer; and (D) not be a qualifying child of the taxpayer
or any other taxpayer for the year. Sec. 152(d)(1). For 2007
the exemption amount was $3,400. See Rev. Proc. 2006-53, sec.
3.18(1), 2006-2 C.B. 996, 1001.
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requirements.   See sec. 152(c)(3)(A)(ii), (f)(2)(A).   In

disallowing petitioner’s dependency exemption deduction for her

niece, respondent determined in the notice of deficiency that

petitioner and her niece did not have the same principal place of

abode for more than one-half of 2007.3   On the basis of the

undisputed evidence, however, we have found that petitioner and

her niece lived together in petitioner’s home throughout 2007.

     Respondent seems to suggest that we should sustain his

determination because petitioner’s niece provided over one-half

of her own support for 2007.   Respondent failed to raise this

theory in the notice of deficiency.    Because the factual basis

required to establish whether petitioner’s niece meets this

support test is different from the factual basis required to

establish whether the abode test is met, we treat it as a new

matter.   See Shea v. Commissioner, supra at 192. Accordingly, the

burden of proof is on respondent to show that petitioner’s niece

provided more than one-half of her own support for 2007.

     The term “support” includes items such as food, shelter,

clothing, medical and dental care, education, and the like.    Sec.


     3
      The notice of deficiency also appears to conclude that
petitioner’s niece was not a “qualifying relative” on the ground
that her gross income exceeded the exemption amount. Because we
conclude that the niece was petitioner’s qualifying child, it is
immaterial whether she also met the requirements for a qualifying
relative. Indeed, an individual who is the taxpayer’s qualifying
child cannot also be the taxpayer’s qualifying relative. Sec.
152(d)(1)(D).
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1.152-1(a)(2)(i), Income Tax Regs.      In order to determine whether

an individual provided more than one-half of his or her own

support, it is necessary to compare the amount of support the

individual provided for himself or herself to the amount of

support the individual received from all sources.     Cf. id.

(employing a similar test to determine whether an individual

received more than one-half of his or her support from a

taxpayer).

       Petitioner testified that during 2007 her niece earned “six

or seven thousand” dollars.    Respondent has presented no evidence

to show that during 2007 petitioner’s niece provided herself any

greater amount of support than this or that this amount

represents more than one-half of the total support that she

received from all sources, including petitioner and petitioner’s

son.    Accordingly, we hold that respondent has failed to meet his

burden of proof as to this issue and that petitioner is entitled

to a dependency exemption deduction with respect to her niece, as

her qualifying child, for 2007.

II.    Earned Income Credit

       An eligible individual may claim an earned income credit

against income tax liability.    Sec. 32(a).   The term “eligible

individual” includes “any individual who has a qualifying child

for the taxable year”.    Sec. 32(c)(1)(A)(i).   A taxpayer’s

eligibility for, and the amount of, the earned income credit is
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affected by the number of the taxpayer’s qualifying children.

See sec. 32(a), (b), and (c).    For this purpose, the definition

of “qualifying child” is the same as under section 152(c), as

pertains to the dependency exemption, except that the

determination is made without regard to whether the individual

provided over one-half of his or her own support.    See sec.

32(c)(3).

     We have held that petitioner’s niece was her qualifying

child for 2007.   In addition, we conclude that petitioner’s

sister was also petitioner’s “qualifying child” under section

32(c)(3).   A sister satisfies the relationship requirement.    See

sec. 152(c)(2)(B).   Moreover, petitioner and her sister had the

same principal place of abode throughout 2007.    That leaves just

the age requirement.

     The age requirement for a qualifying child is treated as met

with respect to an individual who is permanently and totally

disabled.   Sec. 152(c)(3)(B).   An individual is permanently and

totally disabled if at any time during the calendar year he or

she is unable to engage in any substantial gainful activity by

reason of any medically determinable physical or mental

impairment which has lasted or can be expected to last for a

continuous period of not less than 12 months.    Secs.

152(c)(3)(B), 22(e)(3).   On the basis of the undisputed evidence
                                 - 8 -

in the record, we have found that petitioner’s sister was totally

and permanently disabled throughout 2007.

     We conclude and hold that petitioner is entitled to an

earned income tax credit on the basis of having two qualifying

children.

     To reflect the foregoing,


                                           Decision will be entered

                                      for petitioner.
