                  T.C. Summary Opinion 2001-145



                     UNITED STATES TAX COURT



                 JOHN R. JOHNSON, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent


     Docket No. 8535-00S.               Filed September 18, 2001.


     John R. Johnson, pro se.

     Carina J. Campobasso, for respondent.


     POWELL, 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.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, subsequent section references
are to the Internal Revenue Code in effect for the years in
issue, and Rule references are to the Tax Court Rules of Practice
and Procedure.
                                - 2 -

       Respondent determined deficiencies of $742 and $3,068 in

petitioner’s 1997 and 1998 Federal income taxes, respectively.

The issue is whether petitioner is entitled to dependency

exemption deductions for any of his children during 1997 and

1998.    Petitioner resided in Milford, Maine, at the time he filed

the petition in this case.

       Petitioner and his former wife were divorced in 1990.   From

what is in the record, in the earlier years the divorce was not a

pleasant affair.    Petitioner had three children from this

marriage (Tracey, Meghan, and Candace).     The original divorce

decree, dated September 21, 1990, provides:

            The Court awards to the parties shared parental rights
       and responsibilities as to the minor children * * *. The
       primary physical residence of the children shall be with the
       * * * [former wife]. * * * [Petitioner] shall have the
       right to be visited by the minor children at all reasonable
       times * * *.

The divorce decree was amended on January 7, 1992, to provide

that

       “reasonable times” * * * shall be defined to include at
       least that period during the three consecutive days off
       * * * that * * * [petitioner] has in his current employment
       schedule * * *.

       It is not disputed that petitioner paid more than half of

the support for the children during the years before the Court.

The original divorce decree provided that petitioner would pay

$148.72 per week for child support.     On January 28, 1993, by
                               - 3 -

court order, that amount was reduced to $100 per week because

Candace was living at petitioner’s residence.

     According to petitioner and his former wife, the children’s

primary residence over the years in issue was fluid.     One child

would get angry with one parent and move in with the other

parent.   This was done apparently without specific authorization

by the court; it is clear from the court’s January 28, 1993,

order, however, that the court was aware of and approved of the

relatively fluid state of affairs.

     For the taxable years 1997 and 1998, petitioner filed his

returns as a head of household and claimed dependency exemption

deductions for all three children.     On examination for the 1997

return, respondent disallowed one dependency exemption deduction.

With respect to the 1998 return, respondent disallowed all three

of the claimed dependency exemption deductions.

     Section 151(c) allows a taxpayer to deduct an exemption

amount for each dependent as defined in section 152.     Section

152(a)(1), inter alia, defines a dependent as a daughter “over

half of whose support * * * was received from the taxpayer (or is

treated under subsection * * * (e) as received from the

taxpayer)”.   In relevant part, subsection (e) provides that in

the case of divorced parents “the parent having custody for a

greater portion of the calendar year” is treated as having

supplied over half of the support.     Sec. 152(e)(1).
                                 - 4 -

     Section 1.152-4(b), Income Tax Regs., provides that custody

     will be determined by the terms of the most recent decree of
     divorce * * *. * * * [I]f * * * a decree * * * [does not
     establish] who has custody, * * * “custody” will be deemed
     to be with the parent who, as between both parents, has the
     physical custody of the child for the greater portion of the
     calendar year.

While section 152(e)(2) provides that a custodial parent under

section 152(e)(1) may agree that the noncustodial parent may

claim a dependency exemption, the requirements of that exception

are not satisfied here.

     Respondent focuses on the original divorce decree that

provided that the primary physical residence for the children

would be with the former wife.    But, as far as this record is

concerned, that decree was not the most recent court action with

respect to the custody issue as it related to all the children.

In January 1993, the court recognized that one of the children

(Candace) was living with petitioner and approved that

arrangement.

     We realize that there may have been other custodial

arrangements during the years that would render the January 1993,

court order stale, but, by the same token, such arrangements

would also render the original divorce decree stale.    On the

other hand, if we conclude that the decree does not establish

which parent had custody, it seems quite apparent from the

testimonies of petitioner and his former wife that petitioner had

physical custody of one of the children for the greater portion
                                 - 5 -

of each year in issue.   The record, however, does not support a

finding that petitioner had custody of all three children for the

greater portion of both years.

     With this in mind, we turn to the 1997 year.       Respondent

only disallowed one of the three claimed dependency exemption

deductions.   We sustain respondent’s determination.      With regard

to the 1998 year, petitioner again claimed three dependency

exemption deductions that respondent disallowed in full.       We find

that petitioner has established that he is entitled to one

dependency exemption deduction for 1998.

     Reviewed and adopted as the report of the Small Tax Case

Division.

                                         Decision will be entered

                                 under Rule 155.
