                  T.C. Summary Opinion 2005-49



                     UNITED STATES TAX COURT



               MONTRE SOMSUKCHAREAN, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 19358-03S.               Filed April 19, 2005.


     Montre Somsukcharean, pro se.

     Mindy S. Meigs, for respondent.



      DEAN, Special Trial Judge:     This case was heard pursuant to

the provisions of section 7463 of the Internal Revenue Code in

effect at the time that the petition was filed.    Unless otherwise

indicated, subsequent 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.

The decision to be entered is not reviewable by any other court,

and this opinion should not be cited as authority.
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     Respondent determined for 2002 a deficiency in petitioner’s

Federal income tax of $5,175.

     The issues for decision are:   (1) Whether petitioner is

entitled to dependency exemption deductions; (2) whether

petitioner is entitled to the earned income credit; and (3)

whether petitioner is entitled to the child tax credit.

                            Background

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

The stipulation of facts and exhibits received into evidence are

incorporated herein by reference.   At the time the petition was

filed, petitioner resided in Paramount, California.

     Petitioner timely filed his electronic Form 1040, U.S.

Individual Income Tax Return, for 2002 reporting income of

$18,245.   Petitioner claimed dependency exemption deductions for

himself and for his sisters, K.A. and A.A.1   Petitioner’s mother,

Ms. Norma J. Taylor (Ms. Taylor), is also the mother of the

girls.

     During 2002, petitioner lived with Ms. Taylor and paid her

$300 per month for his rent.    His car payment was $280 monthly,

his car insurance was $80 per month, and he had credit card

payments of $20 to $35 per month.




     1
      The Court uses only the minor children’s initials.
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     Petitioner did not take his sisters to school on a daily

basis, help them with their homework or take them to the doctor.

Ms. Taylor was the primary caregiver for the girls.

     During 2002, Ms. Taylor received public assistance payments

for the girls of approximately $750 per month from the State of

California.   Ms. Taylor provided respondent with a written

statement that petitioner regularly contributed money to the

household and that he was the only adult in the household who was

employed.

     Respondent issued a notice of deficiency determining that

petitioner is not entitled to claim dependency exemption

deductions for his sisters, or any of the credits applicable to

the children for 2002 because he failed to substantiate his

claims.

                            Discussion

     Deductions are a matter of legislative grace, and taxpayers

must maintain adequate records to substantiate the amounts of any

deductions or credits claimed.    Sec. 6001; INDOPCO, Inc. v.

Commissioner, 503 U.S. 79, 84 (1992); sec. 1.6001-1(a), Income

Tax Regs.   Taxpayers generally bear the burden of proving that

the Commissioner’s determinations are incorrect.   Rule 142(a);

Welch v. Helvering, 290 U.S. 111 (1933).   Section 7491 does not

apply because petitioner has failed to substantiate his

deductions.
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1.   Dependency Exemption Deductions

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

amount for each “dependent” as defined in section 152.   As

relevant here, section 152(a) defines a dependent to include a

sister of the taxpayer “over half of whose support, for the

calendar year in which the taxable year of the taxpayer begins,

was received from the taxpayer (or is treated under subsection

(c) or (e) as received from the taxpayer)”.

      To qualify for a dependency exemption deduction, a taxpayer

must establish the total support cost expended on behalf of a

claimed dependent from all sources for the year and demonstrate

that he provided over half of this amount.    See Archer v.

Commissioner, 73 T.C. 963, 967 (1980); Blanco v. Commissioner, 56

T.C. 512, 514-515 (1971); sec. 1.152-1(a)(2)(i), Income Tax Regs.

      The term “support” includes food, shelter, clothing, medical

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

Income Tax Regs.   The total amount of support for each claimed

dependent furnished by all sources during the year in issue must

be established by competent evidence.   Blanco v. Commissioner,

supra at 514; sec. 1.152-1(a)(1), Income Tax Regs.   The amount of

support that the claimed dependent received from the taxpayer is

compared to the total amount of support the claimed dependent

received from all sources.   Sec. 1.152-1(a)(2)(i), Income Tax

Regs.
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      Petitioner has provided no documentary evidence regarding

any amounts he may have expended to care for the girls.

Petitioner has failed to prove that he provided over one-half

their support.   The Court sustains respondent’s determination

that petitioner is not entitled to dependency exemption

deductions for them in 2002.

2.   Earned Income Credit

      Section 32(a)(1) allows an eligible individual an earned

income credit against the individual’s income tax liability.      The

credit is calculated as a percentage of the individual’s earned

income.   Sec. 32(a)(1).    Section 32(a)(2) and (b) limits the

credit allowed based on whether the eligible individual has no

qualifying children, one qualifying child, or two or more

qualifying children.

      Petitioner claimed an earned income credit based on his

sisters qualifying children.     As relevant herein, section

32(c)(3)(B) defines a “qualifying child” as a sister of the

taxpayer who the taxpayer cares for as the taxpayer’s own child,

who has the same principal place of abode as the taxpayer for

more than one-half of the taxable year, and who meets certain age

requirements.

      The record demonstrates that Ms. Taylor was the primary

caregiver for the girls.     The Court finds that petitioner did not

care for the children as if they were his own children, and,
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therefore, petitioner is not entitled to claim earned income

credits for them.   In any event, if petitioner were eligible for

an earned income credit for the children, his earned income

exceeds the phaseout amount of $11,610.

3.   Child Tax Credit

      For taxable year 2002, taxpayers are allowed to claim a tax

credit of $600 for each qualifying child.      Sec. 24(a).   The plain

language of section 24 establishes a three-pronged test to

determine whether a taxpayer has a qualifying child.      If one of

the qualifications is not met, the claimed child tax credit must

be disallowed.   The first element of the three-pronged test

requires that a taxpayer must have been allowed a deduction for

that child under section 151.   Sec. 24(c)(1)(A).

      As stated supra, the Court has sustained respondent’s

determination that petitioner is not entitled to dependency

exemption deductions for the children.      Thus, petitioner fails

the first prong of the test of section 24.      The Court sustains

respondent’s determination regarding the section 24 child tax

credits.

      Reviewed and adopted as the report of the Small Tax Case

Division.

                                        Decision will be entered

                                for respondent.
