                     T.C. Summary Opinion 2010-25



                        UNITED STATES TAX COURT



                     MAURICE BYLES, Petitioner v.
             COMMISSIONER OF INTERNAL REVENUE, Respondent



        Docket No. 19726-08S.           Filed March 2, 2010.



        Maurice Byles, pro se.

        Michael T. Shelton, for respondent.



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

the provisions of section 7463 of the Internal Revenue Code in

effect when the petition was filed.    Pursuant to section 7463(b),

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

and this opinion shall not be treated as precedent for any other

case.     Unless otherwise indicated, subsequent section references

are to the Internal Revenue Code in effect for the year in issue,
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and all Rule references are to the Tax Court Rules of Practice

and Procedure.

     For 2006 respondent determined a deficiency of $3,777 in

petitioner’s Federal income tax.    The issues for decision are

whether:   (1) Petitioner is entitled to dependency exemption

deductions for his sister and his two nephews; (2) petitioner is

entitled to head of household filing status; and (3) petitioner

is entitled to an earned income credit.

                            Background

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

The stipulation of facts and the attached exhibits are

incorporated herein by reference.    When petitioner filed his

petition, he resided in Illinois.

     For 2006 petitioner reported income of $48,511 on Form 1040,

U.S. Individual Income Tax Return, and claimed:    (1) Dependency

exemption deductions for his sister and his two nephews; (2) head

of household filing status; and (3) the earned income credit.

     From January through August 2006 petitioner’s sister and her

two children, petitioner’s nephews, lived with him.    For 2006

petitioner’s sister also claimed dependency exemption deductions

for her two children on her Federal income tax return.

     Respondent issued to petitioner a notice of deficiency:

(1) Disallowing petitioner’s claimed dependency exemption

deductions for his sister and his two nephews and the earned
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income credit; and (2) changing petitioner’s filing status from

head of household to single.

                              Discussion

I.    Burden of Proof

       Generally, the Commissioner’s determinations are presumed

correct, and the taxpayer bears the burden of proving that those

determinations are erroneous.1      Rule 142(a); see INDOPCO, Inc. v.

Commissioner, 503 U.S. 79, 84 (1992); Welch v. Helvering, 290

U.S. 111, 115 (1933).

       Deductions and credits are a matter of legislative grace,

and the taxpayer bears the burden of proving that he or she is

entitled to any deduction or credit claimed.        Rule 142(a); Deputy

v. du Pont, 308 U.S. 488, 493 (1940); New Colonial Ice Co. v.

Helvering, 292 U.S. 435, 440 (1934).        Likewise, the taxpayer is

obliged to demonstrate entitlement to an advantageous filing

status, such as head of household.         Smith v. Commissioner, T.C.

Memo. 2008-229.

II.    Dependency Exemption Deduction

       A.   Petitioner’s Nephews

       Petitioner contends that he is entitled to claim two




       1
      Petitioner has not claimed or shown that he meets the
requirements under sec. 7491(a) to shift the burden of proof to
respondent as to any factual issue relating to his liability for
tax.
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dependency exemption deductions for his nephews in 2006 because

they were his qualifying children.

       A taxpayer is entitled to claim a dependency exemption

deduction only if the claimed dependent is a “qualifying child”

or a “qualifying relative” as defined under section 152(c) and

(d).    Secs. 151(c), 152(a).   A qualifying child is defined as the

taxpayer’s child, brother, sister, stepbrother, or stepsister, or

a descendant of any of them.    Sec. 152(c)(1) and (2).

       In addition, section 152(c) provides that an individual is a

qualifying child of the taxpayer only if:    (1) The individual had

the same principal place of abode as the taxpayer for more than

one-half of the taxable year; (2) the individual meets specified

age requirements; and (3) the individual did not provide over

one-half of his or her own support for the taxable year.

       The parties stipulate that the children are petitioner’s

nephews, and petitioner testified that the children lived with

him for 8 months in 2006.    But even if the Court accepted

petitioner’s testimony and found that his nephews were his

qualifying children for 2006, he nonetheless would not be

entitled to claim dependency exemption deductions for these

children.    Where two or more persons can and do claim the same

individual as a qualifying child, the individual shall be treated

as the qualifying child of the parent.    Sec. 152(c)(4)(A)(i).

These children are the qualifying children of their parent,
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petitioner’s sister, who claimed dependency exemption deductions

for them for 2006.     Accordingly, petitioner is not entitled to

claim the children as his qualifying children for 2006.

Respondent’s determination is sustained.

       B.   Petitioner’s Sister

       Petitioner contends that he was entitled to claim a

dependency exemption deduction for his sister as a qualifying

relative on his 2006 Federal income tax return.

       A qualifying relative is defined as an individual:    (1) Who

bears a certain relationship to the taxpayer, such as the

taxpayer’s brother or sister; (2) whose gross income for the

taxable year is less than the exemption amount ($3,300 for 2006);

(3) with respect to whom the taxpayer provides over one-half of

the individual’s support for the taxable year; (4) and who is not

a qualifying child of the taxpayer or of any other taxpayer for

the taxable year.     Sec. 152(d)(1) and (2).

       For 2006 petitioner’s sister filed a Federal income tax

return and reported $8,138 in income.     His sister’s income

exceeded the exemption amount of $3,300 in 2006; therefore,

petitioner is not entitled to claim his sister as a dependent on

his 2006 Federal income tax return.

III.    Head of Household Filing Status

       Section 1(b) provides a special tax rate for an individual

who qualifies as a head of household.     As relevant herein,
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section 2(b)(1) provides that an unmarried individual “shall be

considered a head of a household if, and only if” that individual

“maintains as his home a household which constitutes for more

than one-half of such taxable year the principal place of abode”

of “a qualifying child of the individual (as defined in section

152(c) * * *)”, sec. 2(b)(1)(A)(i), or “any other person who is a

dependent of the taxpayer, if the taxpayer is entitled to a

deduction for the taxable year for such person under section

151”, sec. 2(b)(1)(A)(ii).

      Petitioner does not satisfy the requirements of section 2(b)

because his nephews are not treated as his qualifying children

pursuant to section 152(c)(4)(A)(i), and it has not been shown

that he is entitled to a dependency exemption deduction for his

sister.   See sec. 152(c) and (d).   Accordingly, petitioner is not

entitled to head of household filing status for 2006.

Respondent’s determination is sustained.

IV.   Earned Income Credit

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

income credit against that individual’s income tax liability.

The amount of the credit for a taxpayer with qualifying children

is determined according to the number of the taxpayer’s

qualifying children.   Sec. 32(b).   Under section 32(c)(3)(A), a

qualifying child is defined as “a qualifying child of the

taxpayer (as defined in section 152(c) * * * ).”   It has not been
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shown that his sister’s children are petitioner’s qualifying

children for 2006.   Therefore, petitioner is not entitled to

claim these children as qualifying children for purposes of the

earned income credit under section 32(a)(1).2

     To reflect the foregoing,


                                         Decision will be entered

                                  for respondent.




     2
      Petitioner’s earned income exceeded $12,120; accordingly,
he is also ineligible to claim an earned income credit under sec.
32(c)(1)(A)(ii) as an individual without a qualifying child. See
Rev. Proc. 2005-70, sec. 3.06(1), 2005-2 C.B. 979, 982
(announcing the specific amount for 2006).
