                  T.C. Summary Opinion 2006-185



                     UNITED STATES TAX COURT



                 DONTEZ R. PARKS, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 15672-05S.               Filed December 7, 2006.


     Dontez R. Parks, pro se.

     Terry Serena, 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 at issue, and all Rule references are to the

Tax Court Rules of Practice and Procedure.
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     Respondent determined a deficiency in petitioner’s Federal

income tax of $3,215 for taxable year 2004.     The issues for

decision are:    (1) Whether petitioner is entitled to a dependency

exemption deduction for his niece, BMB;1 (2) whether petitioner

is entitled to an earned income credit; and (3) whether

petitioner is entitled to both a child tax credit and an

additional child tax credit.

                             Background

     Some of the facts were stipulated and are so found.     The

stipulation of facts and attached exhibits are incorporated

herein by reference.

     At the time the petition was filed, petitioner resided in

Miamisburg, Ohio.

     During the taxable year 2004, petitioner held several jobs.

He worked for Burlington Coat Factory, Extra Help Staffing, and

American Building Maintenance Company (ABM) earning $1,976, $31,

and $10,065, respectively.

     During the greater part of 2004, petitioner worked for ABM

as an office cleaner at a building that was located across the

street from an apartment he lived in with his girlfriend,

Trueshonda Carmicle (Ms. Carmicle).     Petitioner’s daily work

shift was from 5:30 p.m. until 2:00 a.m.     He worked for ABM from

March 2003 until sometime in 2005.


     1
         The Court uses only the initials of the minor child.
                                - 3 -

     Ms. Carmicle worked at a YMCA located near her home in an

after-school program for 3 to 4 hours per day.   From the income

derived from her job, Ms. Carmicle helped pay for the rent, food,

and other expenses she shared with petitioner.

     Petitioner has a sister, Unique Parks (Ms. Parks), who lives

in Lima, Ohio, with her mother.   Ms. Parks had a child, BMB, who

was born on December 4, 2003.   Following the birth of her child,

Ms. Parks began experiencing difficulty in school and was

required by school officials to attend summer classes.   Because

Ms. Parks was required to attend extra tutoring and, eventually,

summer school, care for her child fell upon petitioner’s mother.

Subsequently, petitioner’s mother found it difficult to care for

Ms. Parks and BMB in addition to her employment as a nursing home

aide, and her guardianship of several foster children residing

already at her residence.

     BMB’s father has been generally uninvolved with his child

since her birth and has not provided any form of financial

assistance.   Ms. Parks began receiving assistance vouchers, known

as “WIC”, for her and her baby.   The vouchers entitled Ms. Parks

to a monthly amount of food items such as milk, eggs, cheese,

cereal, and juice.   Ms. Parks also received Medicaid benefits

that entitled BMB to medical care.

     Petitioner’s niece, BMB, came to live with petitioner and

Ms. Carmicle sometime in late May 2004.   Ms. Carmicle would often
                                - 4 -

take the child to work with her at the YMCA.      If the child was

not with Ms. Carmicle, petitioner would watch BMB after he

returned home from work in the early morning.

       In early 2004, petitioner and Ms. Carmicle resided in a one-

bedroom apartment in Fairborn, Ohio.      On December 28, 2004,

petitioner and Ms. Carmicle had their first child.      Around this

time, petitioner and Ms. Carmicle moved to a new residence in

Miamisburg, Ohio.

       On his 2004 tax return, petitioner claimed a dependency

exemption deduction, an earned income credit, and both a child

tax credit and an additional child tax credit with respect to

BMB.    Respondent disallowed the dependency exemption deduction

claimed by petitioner because petitioner did not show that he

provided over half of the support for BMB or that BMB resided

with him for over one-half of the year.      As a result of the

disallowance, respondent further disallowed both the claimed

earned income credit and child care credits.

                             Discussion

       In general, the Commissioner’s determination set forth in a

notice of deficiency is presumed correct.      Welch v. Helvering,

290 U.S. 111, 115 (1933).    In pertinent part, Rule 142(a)(1)

provides the general rule that “The burden of proof shall be upon

the petitioner”.    In certain circumstances, however, if the

taxpayer provides credible evidence with respect to any factual
                                 - 5 -

issue relevant to ascertaining the proper tax liability, section

7491 places the burden of proof on the Commissioner.     Sec.

7491(a); Rule 142(a)(2).   Credible evidence is “‘the quality of

evidence which, after critical analysis, the court would find

sufficient * * * to base a decision on the issue if no contrary
                             2
evidence were submitted’”.       Baker v. Commissioner, 122 T.C.

143, 168 (2004) (quoting Higbee v. Commissioner, 116 T.C. 438,

442 (2001)).    Section 7491 applies only if the taxpayer complies

with substantiation requirements, maintains all required records,

and cooperates with the Commissioner for witnesses, information,

documents, meetings, and interviews.     Sec. 7491(a)(2).

     With respect to the instant matter, petitioner has not

raised an argument with respect to shifting the burden of proof

under section 7491.   Further, petitioner has not shown that he

complied with the threshold requirements thereafter.     Respondent,

on the other hand, argues that petitioner has not fully

cooperated with respondent’s requests for information, documents,

and meetings.   The Court concludes on this record that the burden

of proof remains on petitioner.     Therefore, petitioner bears the

burden of showing that he is entitled to a dependency exemption




     2
       We interpret the quoted language as requiring the
taxpayer’s evidence pertaining to any factual issue to be
evidence the Court would find sufficient upon which to base a
decision on the issue in favor of the taxpayer. See Bernardo v.
Commissioner, T.C. Memo. 2004-199.
                               - 6 -

deduction, that he is entitled to an earned income credit, and

that he is entitled to a child tax credit for the year at issue.

      Moreover, deductions are a matter of legislative grace and

are allowed only as specifically provided by statute.     INDOPCO,

Inc. v. Commissioner, 503 U.S. 79, 84 (1992); New Colonial Ice

Co. v. Helvering, 292 U.S. 435, 440 (1934).

A.   Dependency Exemption

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

exemption amount for each dependent of the taxpayer.    Section

152(a) defines the term “dependent”, in pertinent part, to

include “A son or daughter of a brother or sister of the

taxpayer”.   Sec. 152(a)(6).

      To prevail on this issue, petitioner must show by competent

evidence that: (1) the individual claimed satisfies the

definitional requirements provided in section 152(a) (the

relationship requirement); (2) the amount of total support

provided for the individual claimed; and (3) he provided more

than half of such support (taken together, the support

requirement).   See secs. 151(c)(1)(A), 152(a).

      In this instance, the claimed individual, BMB, satisfies the

definitional requirement of “dependent” within the meaning of

section 152(a)(6).   Specifically, BMB is the daughter of

petitioner’s sister.   Accordingly, the remaining issue is whether
                                - 7 -

petitioner provided more than one-half of his niece’s total

support for 2004.

     For this purpose, “support” is defined as including food,

shelter, clothing, medical and dental care, education, etc.     See

sec. 1.152-1(a)(2)(i), Income Tax Regs.     Section 1.152-

1(a)(2)(i), Income Tax Regs., which provides:

     For purposes of determining whether or not an
     individual received, for a given calendar year, over
     half of his support from the taxpayer, there shall be
     taken into account the amount of support received from
     the taxpayer as compared to the entire amount of
     support which the individual received from all sources,
     including support which the individual himself
     supplied. * * *

     In other words, the support test requires the taxpayer to

establish the total support costs for the claimed individual and

that the taxpayer provided at least half of that amount.      Archer

v. Commissioner, 73 T.C. 963, 967 (1980); see Cotton v.

Commissioner, T.C. Memo. 2000-333; Gulvin v. Commissioner, T.C.

Memo. 1980-111, affd. 644 F.2d 2 (5th Cir. 1981); Toponce v.

Commissioner, T.C. Memo. 1968-101.      Thus, a taxpayer who cannot

establish the total amount of support costs for the claimed

individual generally may not claim that individual as a

dependent.    Blanco v. Commissioner, 56 T.C. 512, 514-515 (1971);

Cotton v. Commissioner, supra.    The amount of total support

provided by the taxpayer may be reasonably inferred from

competent evidence.   See Stafford v. Commissioner, 46 T.C. 515,

518 (1966).
                                - 8 -

     Petitioner testified that BMB resided with him from May 2004

until March 2005.    With respect to the amounts provided for his

niece’s support, petitioner explained that, due to an overcharge

on his bank account, he was required to deposit his paychecks in

his girlfriend’s account.    He testified that he gave Ms. Parks

approximately $100 every 2 weeks to support his niece, BMB.

     Petitioner further testified that he bought BMB clothes,

food, and diapers.    He estimated that he spent $30-35 per week

for food for BMB.    Petitioner also stated that he purchased $30

worth of disposable diapers in a box that would last

approximately a month.    According to petitioner, Ms. Carmicle

would also purchase baby clothes for BMB.

     At trial, Ms. Parks confirmed that BMB went to live with

petitioner in May 2004, while she attended summer school, which

ended in July 2004.    For a 1 month period between summer school

and the start of the school year in August, BMB “came and stayed

for a little bit.”    According to Ms. Parks, BMB “sometimes”

stayed with her at her mother’s house during weekends after the

start of the school year.    Ms. Parks also testified that her

mother would help financially when she could.    In Ms. Parks’

estimation, it cost about $100 per month to support BMB.

     We find petitioner’s testimony to be credible as to the fact

that he provided support for his niece.    We also find

petitioner’s sister to be credible as well.    However, the record
                                 - 9 -

as to the actual amounts provided by petitioner for the care of

the child is distressingly vague and incomplete.

     In this regard, petitioner did not keep records of how much

he spent on BMB.   While petitioner was able to partially

reconstruct for the Court an approximate dollar amount of total

support provided for his niece, there is no documentation with

respect to the expended funds.    In addition, petitioner’s mother

apparently provided some financial support for BMB, although

there is also no accounting for these funds.    Moreover,

petitioner’s sister received “WIC” vouchers and Medicaid.

Petitioner also acknowledged that Ms. Carmicle contributed

towards rent, food, and other incidental household items as well

as for some of BMB’s expenses.    Thus, we cannot clearly say that

petitioner has established the total amount of support for BMB in

taxable year 2004.

     Petitioner attempted to show that he provided over half of

the support for BMB by submitting his paychecks from ABM as well

as bank account statements in Ms. Carmicle’s name.    However, the

deposits to the bank account do not appear to correlate with

petitioner’s paychecks.    From the information before us, we

discern that petitioner deposited two ABM checks in Ms.

Carmicle’s bank account.    The two checks are: (1) October 16,

2004, in the amount of $477.51, which was deposited on October
                              - 10 -

25, 2004; and (2) November 12, 2004, in the amount of $419.76,

which was deposited on December 3, 2004.3

      We are convinced that, during 2004, petitioner paid expenses

on behalf of BMB and was a caring uncle to his niece.     However,

petitioner has failed to provide the Court with any significant

corroborative evidence establishing the total amount of support

or that he provided over half of BMB’s support during the 2004

tax year.

      Upon the basis of the record before us, respondent’s

determination on this issue is sustained.

B.   Earned Income Credit

      As previously stated, petitioner claimed an earned income

credit for taxable year 2004 with BMB as the qualifying child.

In the notice of deficiency, respondent disallowed the earned

income credit.

      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).    Section 32(c)(1)(A)(i), in



      3
       A difficulty is that for about half of the ABM paychecks,
the reported amounts are for “gross” with the “net” amounts cut
off in the joint exhibits. Even taking into account net income
calculations, the amounts still do not correspond with the
amounts deposited. For some of the ABM paychecks that clearly
report net income, there are no corresponding bank deposit
statements. For example, there are no statements for June, July,
September, and December 2004.
                               - 11 -

pertinent part, defines an “eligible individual” as “any

individual who has a qualifying child for the taxable year”.     A

“qualifying child” is one who satisfies a relationship test, a

residency test, and an age test.   Sec. 32(c)(3).    The pertinent

parts of section 32(c)(3) provide:

     (3) Qualifying child.--

          (A) In general.--The term “qualifying
     child” means, with respect to any taxpayer for
     any taxable year, an individual–-

               (i) who bears a relationship to the
          taxpayer described in subparagraph (B),

               (ii) who has the same principal place of
          abode as the taxpayer for more than one-
          half of such taxable year, and

               (iii) who meets the age requirements of
          subparagraph (C).

     As relevant herein, a descendant of a brother or sister who

the taxpayer cares for as the taxpayer’s own child satisfies the

relationship test.   Sec. 32(c)(3)(B)(i)(II).    Therefore, we are

willing to assume that BMB satisfies the relationship test.

     However, although we find petitioner’s testimony credible

that BMB did reside in his residence in Miamisburg, Ohio, for a

period of time in 2004, petitioner did not establish that his

residence was the principal place of abode for BMB for more than

one-half of the taxable year 2004.      Ms. Parks’s testimony shows
                                - 12 -

that BMB frequently stayed with her at her mother’s house in

Lima, Ohio.    We find that BMB fails the residency test of section

32(c)(3)(ii).   Accordingly, respondent’s determination on this

issue is sustained.

C.   Child Tax Credit

      As previously stated, petitioner claimed a child tax credit

and an additional child tax credit for the tax year 2004 with BMB

as the qualifying child.   In the notice of deficiency, respondent

disallowed both the child tax and the additional child tax

credits with respect to BMB.

      Section 24(a) authorizes a child tax credit with respect to

each “qualifying child” of the taxpayer.     The term “qualifying

child” is defined in section 24(c).      As relevant to these facts,

a qualifying child means an individual with respect to whom the

taxpayer is allowed a deduction under section 151.     Sec.

24(c)(1)(A).

      We have already held that petitioner is not entitled to the

dependency exemption deduction under section 151 for BMB.

Accordingly, BMB is not considered a “qualifying child” within

the meaning of section 24(c).    It follows, therefore, that

petitioner is not entitled to a child tax credit under section

24(a).
                               - 13 -

D.   Additional Child Tax Credit

      The child tax credit is a nonrefundable personal credit that

was added to the Internal Revenue Code by the Taxpayer Relief Act

of 1997, Pub. L. 105-34, sec. 101(a), 111 Stat. 796, with a

provision for a refundable credit, the additional child tax

credit, for families with three or more children.    For taxable

years beginning after December 31, 2000, the additional child tax

credit provision was amended to remove the restriction that only

families with three or more children are entitled to claim the

credit.    See sec. 24(d)(1); Economic Growth and Tax Relief

Reconciliation Act of 2001, Pub. L. 107-16, sec. 201(c)(1), 115

Stat. 46.

      In the absence of other nonrefundable personal credits, a

taxpayer is allowed to claim a child tax credit in an amount that

is the lesser of the full child tax credit or the taxpayer’s

Federal income tax liability for the taxable year.    See sec.

26(a).    If the child tax credit exceeds the taxpayer’s Federal

income tax liability for the taxable year, a portion of the child

tax credit may be refundable as an additional child tax credit

under section 24(d)(1).    The refundable and nonrefundable

portions of the child tax credit cannot exceed the total

allowable amount of the credit.

      Petitioner is not entitled to claim an additional child tax

credit because he did not qualify for a child tax credit.
                               - 14 -

     In view of the foregoing, we sustain respondent’s

determination on this issue.

     Reviewed and adopted as the report of the Small Tax Case

Division.


                                         Decision will be entered

                                    for respondent.
