                  T.C. Summary Opinion 2003-118



                     UNITED STATES TAX COURT



                 DONNELL L. JAMES, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 3668-02S.              Filed August 25, 2003.


     Donnell L. James, pro se.

     Daniel J. Parent, for respondent.



     PAJAK, 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.

     Respondent determined a deficiency in petitioner’s 1999
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Federal income tax in the amount of $2,540.    The Court must

decide whether petitioner has a written waiver from the custodial

parent so that he is entitled to claimed dependency exemption

deductions for Donnell James II and Destiney James.

     Some of the facts in this case have been stipulated and are

so found.   Petitioner resided in Stockton, California, when his

petition was filed.

     During their marriage, petitioner and Trudy James (Ms.

James) had two children.    Donnell James II was born on May 20,

1989, and Destiney James was born on March 7, 1994.    On March 4,

1999, the Notice of Entry of Judgment for the dissolution of the

marriage between petitioner and Ms. James was entered.    Ms. James

was awarded sole physical custody of both children and had

physical custody during 1999.

     On her 1999 Federal income tax return, Ms. James claimed

dependency exemption deductions for Donnell James II and Destiney

James.   Following an audit of Ms. James’ 1999 Federal income tax

return, respondent allowed Ms. James the dependency exemptions

for both children.

     On his 1999 Federal Income tax return, petitioner claimed

dependency exemptions for both children.    Following an inquiry by

respondent, petitioner provided respondent with a copy of a Form

8332, Release of Claim to Exemption for Child of Divorced or

Separated Parents.    A copy of this form was also sent to
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respondent’s Service Center at the time petitioner electronically

filed his 1999 Federal income tax return along with the form

containing petitioner’s signature.     Respondent disallowed the two

exemptions claimed by petitioner.

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

exemption amount for each dependent, as defined in section 152.

Under section 152(a), the term “dependent” means, in pertinent

part, a son or daughter of the taxpayer over half of whose

support was received from the taxpayer.    Sec. 152(a)(1).

     In the case of a child of divorced parents, section

152(e)(1) provides in pertinent part that if a child receives

over half of his support from his parents who are divorced under

a decree of divorce and the child is in the custody of one or

both of his parents for more than one-half of the year, then the

child will be treated as receiving over half of his support from

the parent having custody for a greater portion of the calendar

year.

     Section 1.152-4(b), Income Tax Regs., provides that the term

“custody” is “determined by the terms of the most recent decree

of divorce”.   Because the divorce decree grants Ms. James full

custody of both children, she is considered the children’s

“custodial parent” under section 152(e).     Cafarelli v.

Commissioner, T.C. Memo. 1994-265.

     Petitioner, as the “noncustodial parent”, is allowed to
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claim the children as dependents only if one of three statutory

exceptions in section 152(e) is met.    If an exception is met, the

“noncustodial parent” is treated as providing over half of a

child’s support.    We focus on section 152(e)(2), the one

exception on which petitioner relies.

     Section 152(e)(2) will apply if “the custodial parent signs

a written declaration” that such custodial parent will not claim

such child as a dependent, and the noncustodial parent attaches

such written declaration to the noncustodial parent’s return for

the taxable year.

     A Form 8332 was provided by petitioner.    Ms. James signed

the form for 1997 before other words were added.    Petitioner at

trial admitted he wrote the words “98 ‘All Future Years’” after

the reference to 1997 on the Form 8332.    Petitioner claimed this

was agreed to verbally, which is inconsistent with the fact that

Ms. James claimed both children for 1999.

     Under the statute, the “custodial parent” must sign a

“written declaration” releasing his or her claim to the

exemption.   For 1999, petitioner had no written declaration

signed by the custodial parent, Ms. James.    See sec. 1.152-4T(a),

Q&A-4, Temporary Income Tax Regs., 49 Fed. Reg. 34459 (Aug. 31,

1984).   Petitioner was not entitled to claim the dependency
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exemptions.

     Reviewed and adopted as the report of the Small Tax Case

Division.

                                           Decision will be entered

                                      for respondent.
