                       T.C. Memo. 2007-178




                      UNITED STATES TAX COURT



       STEVE A. AND DONNA WOOD CHAMBERLAIN, Petitioners v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 10129-05.              Filed July 5, 2007.



     Steve A. and Donna Wood Chamberlain, pro sese.

     J. Craig Young, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     GOEKE, Judge:   Respondent determined a $1,047 deficiency in

petitioners’ Federal income tax for the taxable year 2003.   The

issue for decision is whether petitioners are entitled to claim a

dependency exemption and a child tax credit for Steven A.

Chamberlain’s child by a previous marriage for the taxable year
                                 - 2 -

2003, pursuant to sections 1511 and 24, respectively.   We hold

that petitioners are not entitled to either the dependency

exemption or the child tax credit, because petitioners failed to

attach a valid Form 8332, Release of Claim to Exemption for Child

of Divorced or Separated Parents, to their joint Federal income

tax return for the taxable year 2003 as required by the Internal

Revenue Code and its corresponding regulations.

                          FINDINGS OF FACT

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

The stipulation of facts and the accompanying exhibits are

incorporated herein by this reference.   Petitioners are husband

and wife and resided in Roanoke, Virginia, at the time their

petition was filed.

     Mr. Chamberlain and Suzanna D. Norris divorced in February

1993.    Mr. Chamberlain and Mrs. Norris had two children by their

marriage.    The terms of the divorce decree granted custody of

both children to Mrs. Norris, and both children resided with Mrs.

Norris at all times from 1993 through 2003.

     After the divorce, Mr. Chamberlain and Mrs. Norris came to

an understanding, wherein each would claim a dependency exemption

for one of their two children.    Accordingly, Mrs. Norris executed

separate Forms 8332 for the taxable years 1993 and 1994.    Mr.

     1
      Unless otherwise indicated, all 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.
                                - 3 -

Chamberlain attached the forms to his Federal income tax return

for each corresponding year, allowing him to claim a dependency

exemption for that year.    Mrs. Norris retained her right to claim

a dependency exemption for the other child since the 1993

divorce.

     The parties have stipulated that in 1995 Mrs. Norris

executed a Form 8332 releasing her right to claim one of the

children as a dependent “for all future years”.2   Mr. Chamberlain

affixed the original of this Form 8332 to his 1995 Federal income

tax return; a fire subsequently destroyed all copies in Mr.

Chamberlain’s possession.   In 1996 Mr. Chamberlain began

attaching Post-it® notes to ensuing Federal income tax returns

referencing the Form 8332 that Mrs. Norris executed in 1995.    Mr.

Chamberlain continued the practice of attaching Post-it® notes

referencing the 1995 Form 8332 through the taxable year 2003.

     2
      The existence of this Form 8332, Release of Claim to
Exemption for Child of Divorced or Separated Parents, has been a
matter of contention throughout these proceedings. Mr.
Chamberlain claims that he had attached the original Form 8332 to
his 1995 Federal income tax return and that any copy that he
might have retained was destroyed in a fire the following year.
The Internal Revenue Service has since destroyed its files of
individual Federal income tax returns for the taxable year 1995
in accordance with its policies and cannot produce a copy. In
November 2006, however, Mrs. Norris executed a notarized letter
declaring that she relinquished her rights to one of the
dependency exceptions “for all future years”. Respondent
originally protested the admission of Mrs. Norris’s letter into
the record as hearsay; however, in a conference held Feb. 23,
2007, Mrs. Norris acknowledged the letter’s validity. Respondent
subsequently withdrew his objection, and the parties have
stipulated to the existence of the 1995 Form 8332 “for all future
years.”
                               - 4 -

The Internal Revenue Service (IRS) did not challenge the

dependency exemption on Mr. Chamberlain’s individual and joint

Federal income tax returns for the taxable years 1996 through

2002, despite Mr. Chamberlain’s failure to comply with the

written declaration requirement.

     In their joint Federal income tax return for the taxable

year 2003, petitioners claimed a dependency exemption and a child

tax credit for one child; once again affixing a Post-it® note to

their joint return referencing Mrs. Norris’s 1995 Form 8332.

However, Mrs. Norris and her current husband claimed both

children as dependents on their 2003 joint Federal income tax

return.   To protect the Government from the whipsaw effect of

this double claim, respondent determined that petitioners were

not entitled to claim the dependency exemption deduction under

section 151.

     In March 2005, respondent issued a $1,047 notice of

deficiency to petitioners for the dependency exemption and child

tax credit claimed for the taxable year 2003.   Petitioners timely

petitioned this Court for a redetermination and later amended

their petition.   In the amended petition, petitioners addressed

Mrs. Norris’s 1995 Form 8332 declaring that “[The] IRS honored

this Form until 2003”.
                                - 5 -

                               OPINION

A.   Applicable Code Sections and Regulations

     Section 151 provides a tax exemption as a deduction in

computing taxable income for a taxpayer’s dependents (dependency

exemption).   Section 152(a) defines “dependent” to include the

son or daughter of a taxpayer, over half of whose support was

received from the taxpayer for the calendar year in which the

applicable taxable year begins.   Section 24 provides a credit

against income tax for each qualified child of a taxpayer who is

under 17 years of age, but the applicable statutory definition of

a qualified child is one for whom a taxpayer may claim a

deduction under section 151.   Sec. 24(c)(1)(A).   Thus, a taxpayer

is ineligible for the child tax credit under section 24 unless

eligible for the dependency exemption under section 151.

     Where the parents of a dependent child are divorced or

legally separated, section 152(e)(1) generally confers the

dependency exemption onto the parent having custody of the child

for the greater portion of the calendar year (custodial parent).3

As an exception to the general rule, a noncustodial parent may

claim the exemption where the custodial parent executes a valid

written declaration releasing his or her claim to the exemption,

     3
      Sec. 152(e)(1) establishes a support test outlining the
specific requirements for a custodial parent to qualify for this
exemption. Because the issue here involves whether the custodial
parent released her claim to the exemption, and neither party
disputes Mrs. Norris’s satisfaction of the support test, we
decline to discuss it further here.
                               - 6 -

and the noncustodial parent attaches that declaration to his or

her Federal income tax return for the taxable year.    Sec.

152(e)(2); sec. 1.152-4T(a), Q&A-3, Temporary Income Tax Regs.,

49 Fed. Reg. 34459 (Aug. 31, 1984).    Such a declaration may be

executed for a single year, a specified number of years, or for

all future years.   Sec. 1.152-4T(a), Q&A-4, Temporary Income Tax

Regs., 49 Fed. Reg. 34459 (Aug. 31, 1984).    Where the custodial

parent releases his or her exemption for more than 1 year, the

noncustodial parent must attach the original release to his or

her Federal income tax return for the immediate taxable year and

attach a copy of the release to each succeeding return on which

he or she claims the dependency exemption.    Id.

     The IRS issued Form 8332 to conventionalize the written

declaration requirement of section 152.    Any other written

declaration executed by the custodial parent must conform to its

substance.   Sec. 1.152-4T(a), Q&A-3, Temporary Income Tax Regs.,

supra; see Miller v. Commissioner, 114 T.C. 184, 188-189 (2000);

Neal v. Commissioner, T.C. Memo. 1999-97.

B.   The Written Declaration Requirement

     Respondent urges us to sustain the disallowance of

petitioners’ dependency exemption and child tax credit claimed

for the taxable year 2003, because petitioners did not attach a

Form 8332 or its equivalent to their 2003 joint Federal income

tax return as required by section 152(e)(2) and section 1.152-
                               - 7 -

4T(a), Temporary Income Tax Regs, supra.4   The determinations by

the Commissioner in a notice of deficiency are presumed correct,

and the burden of proof is on the taxpayer to prove that the

determinations are in error.   Rule 142(a); Welch v. Helvering,

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

     Petitioners do not contest failing to attach a valid Form

8332 or an equivalent written declaration to their 2003 joint

return.   They have made considerable efforts to locate a copy of

the 1995 Form 8332, but have succeeded only in verifying its one

time existence by eliciting Mrs. Norris’s 2006 confirmatory

letter.   Petitioners now ask us to retroactively apply this

missing Form 8332 to their 2003 joint return.   This we cannot do.

     Failure to attach a valid Form 8332, or an equivalent

written declaration disqualifies a noncustodial taxpayer from

claiming a dependency exemption for the child of a previous

marriage.   Paulson v. Commissioner, T.C. Memo. 1996-560; Peck v.

Commissioner, T.C. Memo. 1996-33; see also Brissett v.

Commissioner, T.C. Memo. 2003-310 (compliance with terms of

separation agreement not sufficient to authorize dependency

exemption without attaching valid Form 8332 or equivalent); Neal

v. Commissioner, supra (affixing unsigned Forms 8332 to

taxpayer’s returns resulted in disallowance of dependency

     4
      Temporary regulations have binding effect and are entitled
to the same weight as final regulations. Peterson Marital Trust
v. Commissioner, 102 T.C. 790, 797 (1994), affd. 78 F.3d 795 (2d
Cir. 1996).
                                - 8 -

exemptions for corresponding taxable years regardless of

provisions of divorce decree).

     Although we are sympathetic with petitioners’ plight, “we

are bound by the wording of the statute as enacted and the

accompanying regulations, when consistent therewith.”     Michaels

v. Commissioner, 87 T.C. 1412, 1417 (1986).     The language of

section 152(e), as manifested through its accompanying

regulations, is unambiguous.    It grants the dependency exemption

to a noncustodial parent only where he or she attaches a valid

Form 8332 or its equivalent to a Federal income tax return for

the taxable year in which he or she claims the exemption.

Congress added this written declaration requirement to section

152(e) in 1984 to provide more certainty to the “often subjective

and * * * difficult problems of proof and substantiation” that

accompanied dependency exemption disputes under the prior

statute.    H. Rept. 98-432 (Part 2), at 1498 (1984).   Congress

sought clarity as to which of two divorced parents would receive

the dependency exemption for a taxable year and accomplished it

by conditioning the noncustodial parent’s claim upon the written

verification of the custodial parent’s release of his or her

claim.   To preserve Congress’s goal we must insist on strict

adherence to the requirements of section 152.     Miller v.

Commissioner, supra at 196; Bramante v. Commissioner, T.C. Memo.

2002-228.    Accordingly, we sustain respondent’s disallowance of
                               - 9 -

the dependency exemption and child tax credit claimed by

petitioners for the taxable year 2003.5

C.   Estoppel

     Petitioners further argue that respondent’s past acceptance

of Federal income tax returns that did not conform to the written

declaration requirement estops the disallowance of the dependency

exemption and child tax credit for the taxable year 2003.    To

raise estoppel as an affirmative defense a party must

specifically assert it in his or her pleading.    Rule 39; Lodi

Iron Works, Inc. v. Commissioner, 29 T.C. 696, 701 (1958).

Although no technical form is required to assert a matter in a

pleading, it must be simple, precise, and direct, so that it

gives the opposing party and the Court fair notice that the

matter is in controversy.   Rule 31(a) and (b).   Petitioners’

amended petition adheres to these requirements.

     Petitioners claim that respondent’s failure to challenge the

dependency exemption on Mr. Chamberlain’s individual and joint

Federal income tax returns for the taxable years 1996 through

2002, despite Mr. Chamberlain’s failure to comply with the

written declaration requirement, should prevent respondent from

now demanding that a Form 8332 accompany their 2003 joint return.

In the alternative, petitioners claim that respondent’s failure

     5
      We do not address here the question of whether Mrs.
Norris’s notarized letter would fulfill the requirements of Form
8332 if petitioners had had the opportunity to attach it to their
2003 joint return.
                                - 10 -

to notify them of the impropriety of these prior returns should

prevent the disallowance of the deduction and credit, because it

denied them the opportunity to retrieve a copy of the 1995 Form

8332 and correct the discrepancy.

     Once again, while we sympathize with petitioners’ position,

the law is clear.    The Commissioner’s allowance of a deduction on

a Federal income tax return for 1 year does not preclude him from

challenging a similar item in a return for a later year.      S.

Chester Tube Co. v. Commissioner, 14 T.C. 1229, 1235 (1950);

Lozoff v. United States, 266 F. Supp. 966, 971 (E.D. Wis. 1967),

affd. 392 F.2d 875 (7th Cir. 1968).      This holds true even where

the Commissioner has accepted a taxpayer’s prior returns without

examining them.     Rountree v. Commissioner, T.C. Memo. 1968-165.

Moreover, the Commissioner has no affirmative duty to notify

taxpayers of noncompliance with statutory requirements.      Sommer

v. Commissioner, T.C. Memo. 1983-196.

     Furthermore, application of the estoppel doctrine in tax

cases must be rare, as “the policy in favor of an efficient

collection of the public revenue outweighs the policy of the

estoppel doctrine in its usual and customary context.”      Nadler v.

Commissioner, T.C. Memo. 1992-383, affd. without published

opinion 993 F.2d 1533 (2d Cir. 1993).     Equitable estoppel is

available as a defense only where the taxpayer can show that the

Commissioner’s representatives have committed fraud or unfair

conduct that the taxpayer relied on to his or her detriment.
                                - 11 -

Edens v. Commissioner, T.C. Memo. 1974-309, affd. 549 F.2d 798

(4th Cir. 1976).     Estoppel is generally inapplicable to prevent

the Commissioner from correcting a mistake of law.     Auto. Club of

Mich. v. Commissioner, 353 U.S. 180, 183 (1957).

     Accordingly, we cannot accept petitioners’ estoppel

argument.    While petitioners may perceive unfairness in the

results of respondent’s actions, they have presented no evidence

that suggests respondent made any misrepresentations or

participated in any wrongful behavior.     Thus, respondent is not

estopped from disallowing petitioners’ dependency exemption and

child tax credit for the taxable year 2003.

D.   Actions of Third Party

     Lastly, petitioners claim that this Court should overturn

respondent’s disallowance of the dependency exemption and child

tax credit, because the entire matter is a result of Mrs.

Norris’s claiming the dependency exemption on her 2003 joint

return.     Petitioners base this argument on Mrs. Norris’s 1995

Form 8332, wherein she released her claim to the exemption for

all future years.     They contend she knowingly violated this

release as retaliation for differences that arose between her and

Mr. Chamberlain over custody of their two children.     While Mrs.

Norris’s refusal to set aside past grievances and abide by her

prior agreement may have contributed to the existence of the

instant dispute and petitioners’ unfortunate situation, this
                             - 12 -

Court has no jurisdiction to resolve this underlying grievance.

     To reflect the foregoing,



                                      Decision will be entered

                                 for respondent.
