                               T.C. Memo. 2012-49


                         UNITED STATES TAX COURT



            LUIS SANTANA AND FLOR E. VARGAS, Petitioners v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



      Docket No. 12662-10.                       Filed February 22, 2012.



      Luis Santana and Flor E. Vargas, pro se.

      Vivian N. Rodriguez, for respondent.




            MEMORANDUM FINDINGS OF FACT AND OPINION


      VASQUEZ, Judge: Respondent determined a $2,888 deficiency in

petitioners’ Federal income tax for 2008. The issues for decision are: (1) whether
                                         -2-

petitioners are entitled to a dependency exemption deduction for C.S.;1 and (2)

whether petitioners are entitled to an earned income credit.

                               FINDINGS OF FACT

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

facts and the attached exhibits are incorporated herein by this reference. Petitioners

resided in Florida when the petition was filed.

      Petitioner Luis Santana was formerly married to Maria Rodriguez. They had

two children, E.S. and C.S. Mr. Santana and Ms. Rodriguez were divorced on

November 21, 2001. In connection with their divorce Mr. Santana and Ms.

Rodriguez entered into a family mediation unit agreement (mediation agreement).

The mediation agreement designates Ms. Rodriguez as the “primary residential

parent”. During 2008 C.S. resided with Ms. Rodriguez for more than one-half of

the year.

      The mediation agreement states that for the purposes of Federal income tax

exemptions Ms. Rodriguez is allowed to claim C.S. and petitioner is allowed to

claim E.S. as long as he is current on his child support obligation. Upon E.S.’


      1
        It is the policy of the Court to refer to a minor by his or her initials. See
Rule 27(a)(3). 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-

reaching the age of majority, Mr. Santana and Ms. Rodriguez are to claim C.S. in

alternate years as long as Mr. Santana is current on his child support obligation.

Although the mediation agreement does not specify who is entitled to claim C.S.

first after E.S. reached the age of majority, Ms. Rodriguez did. Ms. Rodriguez

claimed C.S. for an odd-numbered year, and Mr. Santana subsequently started

claiming C.S. for even-numbered years. In 2008 Mr. Santana was current on his

child support obligation.

      Petitioners reported $17,433 of self-employment income and claimed an

earned income credit on their Form 1040, U.S. Individual Income Tax Return, for

2008. They also claimed a dependency exemption deduction for C.S. Petitioners

did not attach Form 8332, Release of Claim to Exemption for Child of Divorced or

Separated Parents, or any written declaration with respect to C.S. to their 2008

return. Petitioners did not ask Ms. Rodriguez to sign a Form 8332 or any other

document declaring that she would not claim C.S. as a dependent.

                                      OPINION

I. Burden of Proof

      Petitioners have neither claimed nor shown that they satisfied the

requirements of section 7491(a) to shift the burden of proof to respondent with
                                         -4-

regard to any factual issue. Accordingly, petitioners bear the burden of proof. See

Rule 142(a).

II. Dependency Exemption Deduction

      Section 151(a) and (c) allows taxpayers an annual exemption deduction for

each “dependent” as defined in section 152. A dependent is either a qualifying child

or a qualifying relative. Sec. 152(a). The requirement is disjunctive, and,

accordingly, satisfaction of either the qualifying child requirement or the qualifying

relative requirement allows the individual to be claimed as a dependent. A

qualifying child must meet four requirements for the taxpayer to qualify for the

deduction. See sec. 152(c)(1)(A)-(D). The pertinent factor here is the residence

requirement: The individual must have the same principal place of abode as the

taxpayer for more than one-half of the taxable year.2 Sec. 152(c)(1)(B).

      Mr. Santana has not demonstrated that C.S. lived with him for more than one-

half of 2008. Thus, C.S. is not Mr. Santana’s qualifying child under section 152(c).

See sec. 152(c)(1)(B).

      A qualifying relative must satisfy four requirements for the taxpayer to qualify

for the deduction. See sec. 152(d)(1)(A)-(D). The two pertinent requirements are


      2
        Respondent does not question that Mr. Santana meets the relationship
requirement, the age requirement, or the support requirement.
                                         -5-

that the taxpayer provide over one-half of the individual’s support for the taxable

year and that the individual not be a qualifying child of the taxpayer or of any other

taxpayer for the taxable year. Sec. 152(d)(1)(C) and (D).

      Mr. Santana did not substantiate the amount of C.S.’ support from all sources

in 2008. Mr. Santana also did not establish that C.S. was not a qualifying child of

any other taxpayer for 2008 (e.g., Ms. Rodriguez). Therefore, C.S. is not Mr.

Santana’s qualifying child under section 152(d).

      Section 152(e)(1), however, provides a special rule whereby a noncustodial

parent may be entitled to claim a dependency exemption deduction for a child

notwithstanding the residency requirement of section 152(c)(1)(B), the support

requirement of section 152(d)(1)(C), and the so-called tie-breaking rule of section

152(c)(4). A child will be treated as the noncustodial parent’s qualifying child or

qualifying relative if five requirements are met. See sec. 152(e)(1) and (2). The

relevant requirements here are that the custodial parent sign a written declaration, in

such manner and form as the Secretary may prescribe, that the custodial parent will

not claim the child as a dependent and that the noncustodial parent attach that

declaration to the noncustodial parent’s return for the taxable year. Sec.

152(e)(2)(A) and (B).
                                         -6-

      The Internal Revenue Service issued Form 8332 in order to standardize the

written declaration required by section 152(e). See, e.g., Chamberlain v.

Commissioner, T.C. Memo. 2007-178. Form 8332 requires a taxpayer to furnish:

(1) the name of the child; (2) the name and Social Security number of the

noncustodial parent claiming the dependency exemption deduction; (3) the Social

Security number of the custodial parent; (4) the signature of the custodial parent; (5)

the date of the custodial parent’s signature; and (6) the year(s) for which the claims

were released. See Miller v. Commissioner, 114 T.C. 184, 190 (2000), aff’d on

another ground sub nom. Lovejoy v. Commissioner, 293 F.3d 1208 (10th Cir.

2002). Although taxpayers are not required to use Form 8332, any other written

declaration executed by the custodial parent must conform to the substance of Form

8332.3 See id. at 189. Section 152(e) allows a noncustodial parent to claim the

dependency exemption deduction only when that parent attaches a valid Form 8332

or its equivalent to a Federal income tax return for the taxable year for which he or

she claims the dependency exemption deduction. See Paulson v. Commissioner,

T.C. Memo. 1996-560.



      3
        For cases applying sec. 152(e), see King v. Commissioner, 121 T.C. 245,
252 (2003), Gessic v. Commissioner, T.C. Memo. 2010-88, Loffer v.
Commissioner, T.C. Memo. 2002-298, and Bramante v. Commissioner, T.C.
Memo. 2002-228.
                                         -7-

      Petitioners did not attach Form 8332 or its equivalent to their Form 1040.

Even if petitioners had attached the mediation agreement, they still would not have

satisfied the requirements of section 152(e)(2). The mediation agreement contains a

provision for Mr. Santana to share the deduction with his ex-wife in alternating

years once there is only one eligible child. This alternating years provision does not

specify which parent--Mr. Santana or Ms. Rodriguez--claims C.S. first once E.S.

reaches the age of majority. Because the mediation agreement does not specify

which parent was entitled to claim C.S. first, we cannot determine whether it is Mr.

Santana’s or Ms. Rodriguez’s year to claim C.S. under the mediation agreement.

Because this alternating years provision is so ambiguous, there is no explicit

declaration of Ms. Rodriguez releasing her right as the custodial parent to claim

C.S. for the year in issue. See Boltinghouse v. Commissioner, T.C. Memo. 2003-

134 (separation agreement was not so ambiguous that it failed to actually disclaim

custodial parent’s right to exemption); White v. Commissioner, T.C. Memo. 1996-

438 (letter did not substantively conform to Form 8332 because it failed to explicitly

state that custodial parent would not claim minor children).
                                         -8-

      Accordingly, we find that C.S. is not treated as Mr. Santana’s qualifying child

or qualifying relative under section 152(e), and therefore petitioners are not entitled

to the dependency exemption deduction for C.S. for 2008.4

III. Earned Income Credit

      Section 32(a) provides an earned income credit for an eligible individual for

so much of the taxpayer’s earned income for the taxable year as does not exceed the

earned income amount. To be entitled to an earned income credit for the 2008 tax

year, married filing jointly taxpayers must have earned income and adjusted gross

income for the taxable year each less than: (i) $41,646 with two or more qualifying

children; (ii) $36,995 with one qualifying child; or (iii) $15,880 with no qualifying

children. Sec. 32(b)(2), (j)(1); Rev. Proc. 2007-66, sec. 3.07, 2007-2 C.B. 970,

973. Earned income includes wages, salaries, tips, and other employee

compensation plus net earnings from self-employment. Sec. 32(c)(2)(A). The term

“qualifying child”, for purposes of section 32, means a qualifying child as defined in

section 152(c) without regard to section 152(c)(1)(D) and (e). Sec. 32(c)(3)(A).




      4
         Because the decree is fatally ambiguous, we do not need to reach
respondent’s arguments regarding the conditionality of the mediation agreement or
lack of Social Security numbers.
                                           -9-

      As discussed above, C.S. is not a qualifying child of Mr. Santana.5 Thus, for

purposes of section 32, petitioners have no qualifying children. Petitioners reported

$17,433 of net earnings from self-employment and $18,949 of adjusted gross

income, making them ineligible for an earned income credit. Consequently,

respondent’s determination is sustained.

      We are not unsympathetic to petitioners’ position. We also realize that the

statutory requirements may seem to work harsh results to taxpayers, such as Mr.

Santana, who are current in their child support obligations and who are entitled to

claim the dependency exemption deductions under the terms of a child support

order. However, we are bound by the statute as it is written and the accompanying

regulations when consistent therewith. Michaels v. Commissioner, 87 T.C. 1412,

1417 (1986); Brissett v. Commissioner, T.C. Memo. 2003-310.

      To reflect the foregoing,


                                                       Decision will be entered

                                                 for respondent.




      5
          This remains true even without regard to sec. 152(c)(1)(D) and (e).
