                  T.C. Summary Opinion 2003-133



                     UNITED STATES TAX COURT



                  HARVEY TAYLOR, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 4818-01S.              Filed September 25, 2003.



     Harvey Taylor, pro se.

     Matthew J. Bailie, for respondent.



     GOLDBERG, 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.   The decision to be

entered is not reviewable by any other court, and this opinion

should not be cited as authority.   Unless otherwise indicated,

subsequent section references are to the Internal Revenue Code in

effect for the year in issue.
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     Respondent determined a deficiency in petitioner’s Federal

income tax of $4,026 for the taxable year 1997.

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

entitled to four dependency exemption deductions; (2) whether

petitioner is entitled to head of household filing status; and

(3) whether petitioner is entitled to an earned income credit.

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

The stipulations of fact and the attached exhibits are

incorporated herein by this reference.     Petitioner resided in

Fresno, California, on the date the petition was filed in this

case.

     Petitioner has four children:     Tristan Taylor, Harvey

Taylor, Khyrie Taylor, and Kares Taylor.     Petitioner and the

children’s mother, Angela White (Ms. White), have never been

married to each other.   During the year in issue, Ms. White had

physical custody of the children, and her residence was the

children’s principal place of abode.

     During the year in issue, petitioner earned $18,546 in

taxable wages.   He resided with his brother in a two-bedroom

apartment.   Child support payments were deducted from his

paycheck every 2 weeks; petitioner estimates the amount of these

payments to have been $291.   In addition to the child support,

petitioner bought presents for the children on birthdays and

holidays, and the children were covered by petitioner’s dental
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insurance plan.   However, petitioner did not directly pay any

other expenses for the children on a routine basis.

     During the year in issue, Ms. White lived in a three-bedroom

apartment with the four children.    She was employed part time as

an assisted living care provider, and she received approximately

$1,500 per month in welfare and Social Security income.     The

children were covered by a State medical insurance program.       Ms.

White estimated her monthly expenses during that year to be as

follows:   $575 for rent, $100 for utilities, $40 for life

insurance, $45 for telephone service, $300 for food, and $280 for

a car payment and car insurance.    Because two of petitioner’s and

Ms. White’s children are developmentally disabled, Ms. White must

incur additional expenses.

     The first issue for decision is whether petitioner is

entitled to four dependency exemption deductions.     Petitioner

claimed dependency exemption deductions for Tristan, Harvey,

Khyrie, and Kares.    Respondent disallowed each of these

deductions.

     Among other requirements, a taxpayer generally is entitled

to a dependency exemption deduction for a child only if the

taxpayer provides over half of the child’s total support during

the taxable year.    Secs. 151(a), (c) and 152(a).   The total

support for a child includes the entire amount of support which

the child receives from all sources, including Social Security
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benefits and welfare payments paid for the child’s benefit.

Lutter v. Commissioner, 61 T.C. 685 (1974), affd. per curiam 514

F.2d 1095 (7th Cir. 1975); sec. 1.152-1(a)(2)(i), Income Tax

Regs.

     Petitioner was unable to provide estimates concerning the

portion of the children’s expenses which he paid during 1997.

Petitioner did testify, however, that he paid $291 in child

support every 2 weeks.1   This would equal approximately $7,566 in

1 year.   Ms. White, on the other hand, testified that she

received between $583 and $1,200 in monthly wages,2 in addition

to the $1,500 per month in welfare and Social Security payments.

Disregarding the uncertain amount of wage income, Ms. White still

received approximately $18,000 in 1 year from welfare and Social

Security.   Thus, even if we accept petitioner’s estimate of the

amount of his child support payments, the children nevertheless

received a significantly greater amount of support from sources

other than petitioner.    Furthermore, petitioner admitted that he

did not make routine payments for expenses in excess of the child

support payments.   On the basis of these facts, we find that

petitioner did not provide over half of the children’s support


     1
      The exact amount of the support which Ms. White actually
received is unclear. Ms. White testified that she received less
than this amount because she was on welfare at that time.
     2
      While Ms. White first testified that she received $1,200 in
monthly “earned income”, she later testified that her yearly
income from her employment was “less than $7,000.”
                                  - 5 -

during 1997.    Petitioner therefore is not entitled to the

dependency exemption deductions which he claimed for that year.

Secs. 151(a), (c) and 152(a).

     The second issue for decision is whether petitioner is

entitled to head of household filing status.        Petitioner claimed

head of household filing status on his return, and respondent

changed the filing status to single in the notice of deficiency.

     As is relevant here, a taxpayer is entitled to head of

household filing status with respect to children only if the

taxpayer maintains a household which is the principal place of

abode of one or more of those children.        Sec. 2(b)(1).

Petitioner admits that his household was not the principal place

of abode of any of his children during 1997.        Consequently,

petitioner is not entitled to head of household filing status for

that year.     Id.

     The third issue for decision is whether petitioner is

entitled to an earned income credit.        Petitioner claimed an

earned income credit with Tristan and Harvey as qualifying

children.    In the notice of deficiency, respondent disallowed the

earned income credit in full.

     Subject to certain limitations, an eligible individual is

allowed a credit which is calculated as a percentage of the

individual’s earned income.      Sec. 32(a)(1).    Earned income

includes wages.      Sec. 32(c)(2)(A).    For the year in issue,
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individuals who do not have any qualifying children, and whose

earned income is $9,770 or greater are not entitled to an earned

income credit for that year.    Sec. 32(a) and (b); Rev. Proc. 96-

59, 1996-2 C.B. 392.   An individual with qualifying children is

entitled to a credit at higher levels of earned income and in a

larger amount than is an individual without qualifying children.

Sec. 32(a) and (b).    As is relevant here, a qualifying child is a

child of a taxpayer who has the same principal place of abode as

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

32(c)(3)(A).

     Petitioner claimed the earned income credit with Tristan and

Harvey as qualifying children.    However, none of petitioner’s

children, including Tristan and Harvey, resided with petitioner

for any portion of 1997.   Petitioner therefore had no qualifying

children during that year.    See sec. 32(c)(3)(A)(ii).    Because

petitioner had no qualifying children, and because he had taxable

wages of $18,546 in 1997, petitioner is not entitled to an earned

income credit in any amount for that year.    Sec. 32(a) and (b);

Rev. Proc. 96-59, supra.

     Finally, we briefly address an argument made by petitioner

in his petition that, because he did not receive a refund of

Federal income taxes for 1997, “the IRS [should] go after the

person who got the refund.”    At trial, petitioner indicated that
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the refund for the overpayment shown on his 1997 return was

applied to his past-due child support liability.

     The Commissioner is authorized to refund to a taxpayer any

overpayment the taxpayer made.     Sec. 6402(a).    However, where the

taxpayer is liable for past-due support, the Commissioner is

statutorily required to intercept and to remit any overpayments,

to the extent of the liability, to the State collecting the

support.    Sec. 6402(c).3   Whether a refund for a given taxable

year is paid directly to a taxpayer or is intercepted for past-

due support, the Commissioner nevertheless may determine that

there is a deficiency in tax for that year.        Terry v.

Commissioner, 91 T.C. 85 (1988).     If the Commissioner makes such

a determination, the taxpayer is not entitled to an offset of the

refund against the amount of the deficiency.        Sec. 6211(a).   In

short, because the 1997 refund was remitted on petitioner’s

behalf in accordance with his obligation to pay child support,

petitioner is liable for the subsequently determined deficiency

in the tax shown on the 1997 return.

     Reviewed and adopted as the report of the Small Tax Case

Division.

                                         Decision will be entered

                                 for respondent.


     3
      This Court does not have jurisdiction to review the
Commissioner’s interception of refunds for past-due child support
under the authority of sec. 6402(c). Sec. 6402(f).
