                     T.C. Memo. 2006-98



                  UNITED STATES TAX COURT



            DANIEL D. MCBOL ARUAI, Petitioner v.
        COMMISSIONER OF INTERNAL REVENUE, Respondent



Docket No. 14144-04.                 Filed May 11, 2006.


     P filed a Federal income tax return for 2003,
claiming dependency exemptions, a child tax credit, an
additional child tax credit, and an earned income
credit. R disallowed additional dependency exemptions,
child tax credits, and an earned income credit and
subsequently determined a deficiency.

     Held:    P is liable for the deficiency determined
by R.


Daniel D. McBol Aruai, pro se.

Frederick J. Lockhart, Jr., for respondent.
                                 - 2 -

                MEMORANDUM FINDINGS OF FACT AND OPINION


     WHERRY, Judge:     Respondent determined a Federal income tax

deficiency for petitioner’s 2003 taxable year in the amount of

$5,185.     The issues for decision are:

     (1) Whether petitioner is entitled to dependency exemption

deductions for KGT and/or JTW;1

     (2) whether petitioner is entitled to an earned income

credit; and

     (3) whether petitioner is entitled to a child tax credit and

an additional child tax credit.2

                           FINDINGS OF FACT

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

The stipulations of the parties, with accompanying exhibits, are

incorporated herein by this reference.     At the time this petition

was filed, petitioner resided in Denver, Colorado.

     Petitioner filed his Federal tax return for 2003 on February

23, 2004.    On his return, petitioner claimed dependency

exemptions for KGT and JTW, an earned income credit in the amount

of $3,584, a child tax credit in the amount of $279, and an

additional child tax credit in the amount of $620.    Respondent



     1
         The Court uses only the initials of the minor children.
     2
       The additional child tax “credit is for certain
individuals who receive less than the full amount of the child
tax credit”. See IRS Pub. 972, Child Tax Credit (2003).
                                   - 3 -

issued petitioner a notice of deficiency on May 17, 2004.

Petitioner timely filed a petition on August 9, 2004.

       Petitioner was born in southern Sudan.      At trial, petitioner

explained marriage, divorce, and family relationships in southern

Sudan.       When a spouse desires to leave the marriage, there is no

formal divorce proceeding.       Instead, a divorce occurs simply when

the spouse leaves the marriage, which allows either spouse to

remarry.       According to petitioner, people from the same clan or

tribe consider themselves related, independent of any blood

relationship.       Petitioner and Thuok C. Wuol a.k.a. Peter Wuol

(Peter Wuol), the father of KGT and JTW, were members of the same

clan or tribe in southern Sudan.

           Petitioner’s mother3 was the second wife of his father,

Bol.       Bol was previously married to Mydak.   During this marriage,

Mydak gave birth to a son named Deng Bol.4        Bol and Mydak later

separated, and Mydak married Gatkuoth.       During this marriage,

Mydak gave birth to their son, Peter Wuol.5       Thus, petitioner and

Peter Wuol are related by marriage to a common half brother, Deng

Bol.       Neither petitioner nor Peter Wuol have any parents in


       3
       The record does not indicate the name of petitioner’s
mother.
       4
       Deng Bol, who was born before the birth of either
petitioner or Peter Wuol, is now deceased.
       5
       Mydak died sometime after Peter Wuol was born.       After
Mydak’s death, Bol married petitioner’s mother.
                                - 4 -

common, nor has petitioner provided any evidence they are related

by blood.    KGT and JTW are two of five children of Peter Wuol and

his wife, Jakow R. Wuol a.k.a. Jekow Wuol (Jekow Wuol).

     Petitioner emigrated to the United States in 2000.      In 1994,

Peter Wuol, Jekow Wuol, and KGT had emigrated to the United

States, where the four other children of Peter and Jekow Wuol

were born.   Petitioner and Peter Wuol’s family6 reunited in

Colorado Springs, Colorado.

     Peter Wuol, his wife Jekow Wuol, and their four children

lived at 3921 E. San Miguel, Apt. 7, Colorado Springs, Colorado,

during 2003.   Petitioner maintained an apartment at 6 North 18th

Street, Colorado Springs, Colorado, as his primary residence from

approximately June 2002 until January 10, 2004, when he moved to

Denver, Colorado.    However, petitioner spent most of his free

time at the Wuol family apartment.      While at the Wuol family

apartment, petitioner did not occupy a specific room; rather,

petitioner would spend his time in the common living areas or

occasionally spend the night in one of the children’s unoccupied

beds.

     Petitioner testified that “because of where we come from, we

don’t use money.    It is very hard for us to know how to use


     6
       For taxable year 2003, the Wuol family consisted of Peter
Wuol, Jekow Wuol, and their four children. MW, the youngest
child, is not included because he was not born until June 10,
2004.
                                - 5 -

money.    We don’t keep receipts of every little things [sic] we

buy, for buying food or buying clothes, or anything, or even, you

know, we just give money, we forget about it.”    Petitioner began

providing financial support for Peter Wuol’s children when he

obtained a job at the Broadmoor Hotel in Colorado Springs,

Colorado, which paid him approximately $16,000 per year.

Petitioner testified that he gave Peter Wuol approximately

$1,3387 to help Peter Wuol raise his children.   This amount

represented a partial refund from petitioner’s 2003 Federal tax

return.    At trial, petitioner acknowledged that the refund check

was received in January 2004 and that he gave the check directly

to the Wuol family.

     Petitioner contends that during 2003 he thought he gave more

than $2,000 in “food and other things” and that he provided

approximately $1,000 in cash to Peter Wuol’s family for buying

food, paying for the phone bill, or for “anything”.    Peter Wuol

confirmed that petitioner bought gifts for the children in the

form of shoes and clothes, as well as taking them to restaurants

for meals.    Other than his and Peter Wuol’s testimony and the

receipts, discussed below, petitioner did not present any


     7
       Petitioner’s 2003 Federal tax return showed a refund due
of $5,105. The earned income credit in the amount of $3,584 was
withheld pending an inquiry on petitioner’s return. Petitioner
was refunded $1,521, representing the sum of $901 for withholding
credits and $620 for the additional child tax credit. Of that
amount, H&R Block, petitioner’s tax preparer, was paid a fee in
the approximate amount of $200.
                                   - 6 -

evidence detailing his cash contributions, purchases, and

expenditures.       Petitioner explained that he did not keep records

of his monetary contributions to KGT or JTW because in his home

country no one claims dependents on tax returns and no one

receives a refund of tax.

       Petitioner offered into evidence only three receipts for

2003 to prove payments for KGT and JTW.        None of them showed

exactly which amounts represented expenditures for either KGT or

JTW.       Petitioner produced a Wells Fargo Bank transaction record

dated October 23, 2003, in the amount of $450; a self-prepared

receipt dated May 13, 2003, numbered 380499 in the amount of

$175; and a self-prepared, incomplete receipt dated August 23,

2003, numbered 380458 in the amount of $454 to substantiate his

cash payments.8      Petitioner generally did not use the receipts in

his receipt book in sequential order:         “It’s a matter of opening

it up and writing.       Then tear it out.”

       Petitioner did not use the receipt book solely to

acknowledge his contributions or payment of money; he also used

it to acknowledge receipt of money.        Petitioner explained that he

recorded amounts contributed in his receipt book and dated the

receipts the date on which he contends he gave money to Peter



       8
       The numbered receipts listed “Daniel Deng” on the
“Received From” line. Respondent stipulated that petitioner also
goes by the name “Daniel Deng”, “Daniel Deng McBol”, or “Daniel
Deng Aruai”.
                               - 7 -

Wuol.   However, petitioner commented that because he gave Peter

Wuol the money in 2003, he could not remember if the money was

expended for rent or to help Peter Wuol with his children.     At

trial, Peter Wuol also confirmed that petitioner gave him money

to help the Wuol family with the monthly rent.

     Petitioner did not file tax returns for either 2000 or 2002.

Petitioner filed his 2001 tax return, claiming no dependency

exemption deductions, earned income credit, or child tax credit.

Jekow Wuol, filing under head of household status, listed her

sons, KGT and JTW, as dependents when she filed her 2000, 2001,

and 2002 tax returns, and she claimed an earned income credit for

KGT and JTW for those taxable years.    However, Jekow Wuol did not

file a tax return for 2003.   Peter Wuol, filing under head of

household status, listed children other than KGT and JTW as his

dependents when he filed his 2000, 2001, 2002, and 2003 tax

returns.

                              OPINION

I.   Contentions of the Parties

     Petitioner contends that he is entitled to dependency

exemption deductions, a child tax credit, an additional child tax

credit, and an earned income credit because he provided some

support for KGT and JTW.   He maintains that KGT and JTW are

related to him as nephews because they are the children of the

half brother of his now-deceased half brother.   Petitioner
                                 - 8 -

further asserts that he is related to KGT and JTW because

petitioner and the children’s father are essentially brothers by

virtue of their relation to their mutual half brother, Deng Bol,

and because people in southern Sudan are considered related when

they belong to the same tribe.

      Respondent claims that petitioner’s claimed dependents do

not meet the definitional requirements of a dependent under

section 151 and 152 or the prerequisites to be considered a

“qualifying child” under section 24.9    Specifically, respondent

states that petitioner is not related to KGT or JTW under any of

the relationships described in section 152, that KGT and JTW did

not live with petitioner during the year in issue, and that

petitioner has not established that he provided over half of the

support for KGT or JTW for the year in issue.

II.   Burden of Proof

      As a general rule, the Commissioner’s determination of a

taxpayer’s liability is presumed correct, and the taxpayer bears

the burden of proving that the determination is improper.    Rule

142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933).    Deductions

are a matter of legislative grace, and the taxpayer bears the

burden of proving that he is entitled to any claimed deductions.



      9
       Unless otherwise indicated, all section references are to
the Internal Revenue Code (Code) in effect for the year in issue,
and all Rule references are to the Tax Court Rules of Practice
and Procedure.
                                 - 9 -

New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934).

This includes the burden of substantiation.    Hradesky v.

Commissioner, 65 T.C. 87, 89-90 (1975), affd. per curiam 540 F.2d

821 (5th Cir. 1976).   Although section 7491 may shift the burden

of proof to respondent in specified circumstances, petitioner

here has not established that he meets the requisites under

section 7491(a)(1) and (2) for such a shift.

III. Dependency Exemptions

     An exemption is generally allowed for every dependent of a

taxpayer.   Sec. 151(a), (c).   Since KGT and JTW are not

petitioner’s children, they are considered his dependents only if

the definitional requirements of section 151(c) are met and each

of their gross incomes for the taxpayer’s taxable year is less

than the exemption amount.   Section 152(a) defines a dependent as

an individual for whom the taxpayer contributed over half of the

support during the calendar year and who has one of the following

relationships to the taxpayer:

     (1) A son or daughter of the taxpayer, or a descendent
     of either,
     (2) A stepson or stepdaughter of the taxpayer,
     (3) A brother, sister, stepbrother, or stepsister of
     the taxpayer,
     (4) The father or mother of the taxpayer, or an
     ancestor of either,
     (5) A stepfather or stepmother of the taxpayer,
     (6) A son or daughter of a brother or sister of the
     taxpayer,
     (7) A brother or sister of the father or mother of the
     taxpayer,
                              - 10 -

     (8) A son-in-law, daughter-in-law, father-in-law,
     mother-in-law, brother-in-law, or sister-in-law of the
     taxpayer, or
     (9) An individual * * * who, for the taxable year of
     the taxpayer, has as his principal place of abode the
     home of the taxpayer and is a member of the taxpayer’s
     household.

     Peter Wuol testified that he and petitioner were not related

by blood, but Peter Wuol would refer to petitioner as “my

brother”.   Although Peter Wuol believed that he and petitioner

were related as brothers because they were from the same “family”

and thus, Peter Wuol’s children were petitioner’s nephews, Peter

Wuol admitted that he and petitioner had neither the same father

nor the same mother.

     Having a relative in common, by marriage, as in the instant

case, does not necessarily warrant a finding that petitioner and

Peter Wuol are related within the meaning of section 152.    See

Barbetti v. Commissioner, 9 T.C. 1097, 1098 (1947)(noting that

Congress chose only those relationships in section 25(b)(3),

Internal Revenue Code of 1939, as amended, as “being sufficiently

within the family orbit to warrant a dependency allowance.”).10

Petitioner and Peter Wuol are not considered half brothers




     10
       The relationships described in sec. 25(b)(3) of the
Internal Revenue Code of 1939, as amended and in effect for the
taxable years 1944 and 1945 relevant in Barbetti v. Commissioner,
9 T.C. 1097 (1947), are the same as those described in sec.
152(a)(1)-(8).
                              - 11 -

because they do not have a parent in common.11   Petitioner’s

father and Peter Wuol’s mother’s marriage was dissolved, before

petitioner and Peter Wuol were conceived.

     Notwithstanding the fact that a taxpayer may not be related

to an individual through one of the relationships specified in

section 152(a)(1)-(8), a taxpayer may be eligible under section

152(a)(9) for a dependency exemption if the claimed dependent has

the same principal place of abode as the taxpayer and is a member

of the taxpayer’s household for the taxable year.   Peter Wuol

admitted that his wife and all his children resided with him at

the 3921 E. San Miguel, Apt. 7, Colorado Springs, Colorado,

address for all of 2003.   Petitioner maintained an apartment

separate from the Wuol family but failed to establish that either

KGT or JTW resided with petitioner or were part of his household

at petitioner’s 6 North 18th Street apartment.   See Trowbridge v.

Commissioner, 268 F.2d 208, 209 (9th Cir. 1959), affg. 30 T.C.

879 (1958); Douglas v. Commissioner, T.C. Memo. 1994-519, affd.

without published opinion 86 F.3d 1161 (9th Cir. 1996).

     Petitioner’s contention that he spent considerable amounts

of time in the children’s home and helped to pay for the rent on



     11
       Black’s Law Dictionary 206 (8th ed. 2004) defines a
brother as a “male who has one parent or both parents in common
with another person”. Specifically, a half brother is defined as
a “brother who has the same father or the same mother, but not
both”, and a stepbrother is defined as the “son of one’s
stepparent”.
                               - 12 -

the apartment does not demonstrate that he considered the Wuol

family apartment, as opposed to his own apartment, to be his

principal place of abode in 2003.    After all, petitioner paid

rent for his apartment throughout 2003 and did not have specific

living quarters in the Wuol family home.    Rather, it appears that

Peter Wuol merely welcomed petitioner frequently as a guest in

his home because they were friends and from the same clan in

southern Sudan.    During 2003 Peter Wuol’s home, not petitioner’s

home, was the principal place of abode for KGT and JTW who were

during that year members of Peter Wuol’s household.    Thus,

petitioner did not bear a section 152(a)(9) relation to KGT or

JTW.

       Support generally includes food, shelter, clothing, medical

and dental care, education, and the like.    Sec. 1.152-1(a)(2)(i),

Income Tax Regs.    To meet the support test of section 152(a), a

taxpayer must show:    (1) The total amount received by the

dependent from all sources; (2) the amounts actually applied for

the dependent; (3) the sources which contributed to the total

support costs expended for the dependent; and (4) that the

taxpayer provided over half the expenditures for the dependent’s

support.    Seraydar v. Commissioner, 50 T.C. 756, 760 (1968).

       Petitioner provided only questionable receipts for $1,079 of

the amounts he contended he gave to Peter Wuol.    As respondent

points out, on the basis of Peter Wuol’s 2003 tax return and
                              - 13 -

certified transcripts for Peter Wuol’s and Jekow Wuol’s 2002 tax

refunds, Peter and Jekow Wuol had at least $21,844 to contribute

to their family of six in 2003.12    As petitioner tried to

document only that he contributed $1,079 to the entire Wuol

family, petitioner failed to meet his burden of proof that he

contributed more than half the support for either KGT or JTW for

2003.13

     Although the Court agrees that petitioner provided some

support for KGT and JTW, we cannot infer from the evidence the

amount of funds actually used to support KGT and JTW as opposed

to other members of the Wuol family.     Both petitioner and Peter

Wuol testified that the money petitioner gave to Peter Wuol was

used for rent on the Wuol family apartment, clothing for the

children, and groceries for the family.     Thus, most of the funds

given by petitioner were expended on the entire family, not

specifically on KGT or JTW.   Furthermore, petitioner did not

substantiate the total support amounts received by KGT or JTW

from all sources or which sources.     Thus, petitioner failed to

prove that he provided over half the support for either KGT or


     12
       For taxable year 2003, Peter Wuol earned $17,730 in
wages. In 2003, Peter Wuol received a Federal tax refund
consisting of $23 in withholding and $2,010 in earned income
credits. In 2003, Jekow Wuol received a Federal tax refund
consisting of $51 in withholding and $2,030 in earned income
credits. The sum of these amounts is $21,844.
     13
       The Court does not view the three proffered receipts as
reliable or sufficient.
                                  - 14 -

JTW.    See Blanco v. Commissioner, 56 T.C. 512, 514-515 (1971);

Stafford v. Commissioner, 46 T.C. 515, 517 (1966).

IV.    Earned Income Credit

       Section 32(a) and (c), in relevant part, provide that a

taxpayer may be eligible for the earned income credit if that

taxpayer has a “qualifying child”.         A “qualifying child” is a

child who satisfies a relationship test, a residency test, an age

test, and an identification requirement.         Sec. 32(c)(3).

However, a taxpayer may not be eligible for an earned income

credit if the taxpayer’s qualifying child is considered the

qualifying child of another taxpayer for the same taxable year.

Sec. 32(c)(1)(C).

       The relationship test requires that the qualifying

individual bear a relationship to the taxpayer as described in

section 32(c)(3)(B)(i).       Thus, KGT and JTW must be either the

taxpayer’s son, daughter, stepson, stepdaughter, or descendent of

such individual; brother, sister, stepbrother, stepsister, or

descendent of such individual whom the taxpayer cares for as the

taxpayer’s own child; or an eligible foster child of the

taxpayer.    KGT and JTW’s parents were living during the year in

issue, and the children lived with their parents for all of 2003.

Moreover, the record does not indicate that the children were

petitioner’s foster children.       Neither KGT nor JTW meets the

relationship test.
                              - 15 -

     The residency test requires that the qualifying child have

the same principal place of abode within the United States as the

taxpayer for more than one-half of the taxable year.     Sec.

32(c)(3)(A)(ii), (E).   Petitioner did not have the same principal

place of abode as KGT or JTW; thus, neither is a qualifying

child.

     Nonetheless, subject to phaseout limitations, an individual

who does not have any qualifying children may be eligible for an

earned income credit under section 32(a) if:   (1) The

individual’s principal place of abode is in the United States;

(2) the individual, or his spouse, has attained the age of 25 but

not the age of 65 at the close of the taxable year; and (3) the

individual is not a dependent for whom a deduction is allowed

under section 151.   Sec. 32(c)(1)(A).

     Petitioner’s earned income for 2003 was $16,698.    Although

petitioner satisfies the eligibility requirements, the phaseout

limitation prevents the receipt of any earned income credit.    The

earned income credit for an individual without any qualifying

children is completely phased out in tax year 2003 when an

individual’s earned income exceeds $11,230.    Rev. Proc. 2002-70,

2002-2 C.B. 845, 848; see IRS Pub. 596, Earned Income Credit
                               - 16 -

(2003).    Thus, petitioner is not entitled to an earned income

credit, and respondent is sustained on this issue.14

V.   Child Tax Credit

     Section 24 allows a credit for each “qualifying child” of

the taxpayer.    A “qualifying child” is defined by section 24(c)

as an individual who meets the relationship test under section

32(c)(3)(B), has not attained the age of 17 by the close of the

taxable year, and with respect to whom the taxpayer is entitled

to a dependency exemption deduction under section 151.

     During the year in issue, neither child had attained the age

of 17.    KGT was 12 years old, and JTW was 7 years old at the

close of the taxable year.    However, as previously discussed, the

children do not meet the relationship test, and petitioner is not

eligible to claim a dependency exemption deduction for either

child for 2003.    Thus, petitioner is not allowed a child tax

credit or an additional child tax credit.




     14
       On brief, respondent contended that petitioner’s
arrangement with Peter Wuol, whereby petitioner would remit the
net amount of his withholdings and child tax credits to Peter
Wuol, would produce the unintended result of allowing Peter Wuol
to obtain earned income credits in an amount in excess of the
maximum amount allowed for those individuals filing joint
returns. A joint return must be filed by a married individual in
order for sec. 32 to apply. Sec. 32(d). Thus, Peter Wuol and
Jekow Wuol should have filed joint income tax returns rather than
returns filed under head of household filing status for their
2000, 2001, and 2002 taxable years, as well as for Peter Wuol’s
2003 taxable year.
                               - 17 -

VI.   Conclusion

      The Court found the testimony of petitioner and Peter Wuol

to be sincere and credible.    Although the Court applauds

petitioner’s efforts to support himself and help support Peter

Wuol’s entire family, the record does not indicate that he

provided over half the support for either child.    Equally as

important, petitioner did not establish that he was related to

KGT or JTW within the meaning of section 152.    Therefore,

petitioner is not entitled to dependency exemptions for KGT or

JTW, an earned income credit, a child tax credit, or an

additional child tax credit, and he is liable for the deficiency

as determined by respondent.



      To reflect the foregoing,



                                          Decision will be entered

                                     for respondent.
