                  T.C. Summary Opinion 2004-137



                     UNITED STATES TAX COURT



                  JEAN G. JOSEPH, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 7203-03S.            Filed October 7, 2004.


     Jean G. Joseph, pro se.

     Laura A. McKenna, for respondent.



     POWELL, Special Trial Judge:   This case was heard pursuant

to the provisions of section 74631 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.




1
   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 of $2,639.70 in

petitioner’s 2001 Federal income tax.   The issues are whether

petitioner is entitled to (1) a dependency exemption deduction

and (2) an earned income credit (EIC) for a child.   Petitioner

resided in North Miami, Florida, at the time the petition was

filed.

     The facts may be summarized as follows.   Petitioner is

unmarried.   During 2001, petitioner lived with Lucia Duverger,

his “girlfriend” (Ms. Duverger), and two children, one of whom

was petitioner’s daughter (Dina).   Petitioner is self-employed as

a taxicab driver.

     In preparing his 2001 Federal income tax return, petitioner

reported taxable income of $7,589 and claimed a dependency

exemption deduction and an EIC based on amounts he allegedly paid

for the support of Dina.   He also claimed head of household

filing status.2   Respondent disallowed the dependency exemption

deduction and the EIC.   Ms. Duverger filed a Federal income tax

return for 2001 reporting taxable income of $18,855 and claimed

dependency exemption deductions for two children, a child tax

credit, and an EIC.




2
   Petitioner later submitted an amended return on which he
reported $355 of additional self-employment income and claimed
“single” filing status. Petitioner’s filing status is not at
issue.
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Dependency Exemption Deduction

     Petitioner argues that he is entitled to claim a dependency

exemption deduction with respect to Dina.    Sections 151 and 152

provide that a taxpayer is entitled to deduct an exemption for a

minor dependent if the taxpayer provides more than half of the

support for the minor dependent.    A daughter of a taxpayer is

included in the definition of a dependent.    Sec. 152(a)(1).   The

issue with regard to the dependency exemption deduction claimed

by petitioner is whether petitioner established that he provided

more than half of the support for Dina.

     Petitioner claims that he paid approximately $600 per month

for food, clothing, etc., and $500 per month for housing for the

support of Ms. Duverger, Dina, the other child, and himself,

totaling $1,100 per month.    Petitioner has no records

establishing these amounts.    We pointed out at trial that the

total support he allegedly paid per year would have been $13,200,

approximately $5,000 more than his reported taxable income.     He,

therefore, either understated his taxable income or overstated

the amount that he allegedly paid for support.    Moreover,

petitioner had no idea what the total cost for support was or

what the total cost was for the support of Dina.    Given that Ms.

Duverger had a taxable income of more than twice the amount
                               - 4 -

reported by petitioner, we conclude that petitioner did not pay

over half of the support for Dina and is not entitled to claim a

dependency exemption deduction for her.

EIC

      Section 32(a) generally provides eligible individuals with

an EIC against their income tax liability.     An “eligible

individual” is defined to include any individual who has a

“qualifying child”.   Sec. 32(c)(1)(A)(i).    A qualifying child

includes a daughter of the taxpayer, sec. 32(c)(3)(B)(i)(I), who

has the “same principal place of abode as the taxpayer for more

than one-half of such taxable year”, sec. 32(c)(3)(A)(ii).     We

assume that petitioner satisfies these requirements.     Section

32(c)(1)(C) provides, however, that:

           If 2 or more individuals would * * * be treated as
           eligible individuals with respect to the same
           qualifying child * * * only the individual with the
           highest modified adjusted gross income for such taxable
           years shall be treated as an eligible individual with
           respect to such qualifying child.

It appears that both Ms. Duverger and petitioner would satisfy

the threshold requirements of being an eligible individual with

respect to Dina.   But, Ms. Duverger has the highest modified

adjusted gross income.   See sec. 32(c)(5).    Petitioner,

therefore, is not entitled to claim an EIC with respect to Dina.

        We have seen an increasing number of these cases where

there has been no discernible substance to the case other than an

inept attempt to take advantage of tax deductions and credits.
                               - 5 -

Often this results from advice given by tax return preparers who

know better.   This results in an audit, and we urge such

taxpayers and their return preparers to be more circumspect.     Not

only do the taxpayers end up paying interest for the current

year, they may be subject to penalties or the denial of otherwise

allowable credits in future years.     See sec. 32(k).

     Reviewed and adopted as the report of the Small Tax Case

Division.

                                            Decision will be entered

                                       for respondent.
