                  T.C. Summary Opinion 2010-60



                     UNITED STATES TAX COURT



         GABRIEL MORA AND MIRNA SILVERIO, Petitioners v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 6732-07S.              Filed May 10, 2010.



     Gabriel Mora and Mirna Silverio, pro sese.

     Anne M. Craig, for respondent.



     ARMEN, 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.1   Pursuant to section

7463(b), the decision to be entered is not reviewable by any



     1
        Unless otherwise indicated, all subsequent section
references are to the Internal Revenue Code in effect for the
year in issue, and all Rule references are to the Tax Court Rules
of Practice and Procedure.
                                - 2 -

other court, and this opinion shall not be treated as precedent

for any other case.

     Respondent determined a deficiency in petitioners’ 2004

Federal income tax of $5,958, an addition to tax of $307.05 under

section 6651(a)(1) for failure to timely file a tax return, and

an accuracy-related penalty of $1,191.60 under section 6662(a).

In an affirmative pleading, respondent asserts that petitioners

are not entitled to the filing status of married filing jointly

for 2004.

     After concessions, the issues for decision are:

     (1)    Whether petitioners are entitled to the filing status

of married filing jointly;

     (2)    whether petitioners are entitled to dependency

exemption deductions for petitioner Mora’s two parents, two

nieces, and nephew;

     (3)    whether petitioners are entitled to the child tax

credit and additional child tax credit for the two nieces and

nephew;

     (4)    whether petitioners are liable for the addition to tax

for failure to timely file; and

     (5)    whether petitioners are liable for the accuracy-related

penalty.
                                   - 3 -

                                Background

        None of the facts have been stipulated by the parties.

Petitioners resided in the State of Florida when the petition was

filed.       Petitioners have limited English proficiency, and their

testimony was given through an interpreter at trial.        References

to petitioner in the singular are to petitioner Gabriel Mora.

        At all relevant times petitioners were not married, but

lived together as husband and wife.        During 2004 petitioner

worked for a landscaping company, but petitioner Silverio did not

work outside the home and had no income.        Petitioners have a

daughter, S.M., who lived with them and was a minor in 2004.2

        During 2004 petitioner wired approximately $1,900 to family

members in Mexico.3      Petitioner sent the money to help support

his parents, two nieces, and nephew, who resided together on a

farm in Mexico.       The nieces and nephew were between the ages of

10 and 13 during the year in issue.

     Petitioners’ 2004 Federal income tax return was completed by

a professional tax return preparer and untimely filed in June

2005.       The return is dated May 27, 2005, and was received by

respondent on June 20, 2005.       Petitioners filed the return using



        2
        It is the policy of the Court to refer to minors only by
their initials. See Rule 27(a)(3).
        3
        The record includes receipts for six wire transactions
totaling $1,897. Petitioner indicated that he was unable to
locate receipts for all of the wire transactions for 2004.
                               - 4 -

the filing status of married filing jointly and claimed six

dependency exemption deductions:   one for their daughter and five

for petitioner’s relatives in Mexico (two parents, two nieces,

and a nephew).   Petitioners also claimed the child tax credit and

the additional child tax credit for four children:   their

daughter and petitioner’s two nieces and nephew.

     In a notice of deficiency, respondent denied the dependency

exemption deductions for petitioner’s parents, nieces, and nephew

and denied the child tax credit and additional child tax credit

for petitioner’s nieces and nephew.    Respondent also determined

that petitioners are liable for the addition to tax for failure

to timely file a tax return and the accuracy-related penalty

based on negligence or disregard of rules or regulations.

     In respondent’s Amendment to Answer respondent alleges that

petitioners were not entitled to file a joint return because

petitioners were not married in 2004, but concedes that

petitioner is entitled to head-of-household filing status and two

exemption deductions:   one for petitioner Silverio and one for

petitioner’s daughter, S.M.4




     4
        Petitioner is also entitled to the child tax credit for
his daughter.
                                - 5 -

                             Discussion

A.   Burden of Proof

      Generally, the Commissioner’s determinations are presumed

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

determinations are erroneous.    Rule 142(a); 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 proof to

establish 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).    Under section 7491(a)(1), the burden of proof may shift

from the taxpayer to the Commissioner if the taxpayer produces

credible evidence with respect to any factual issue relevant to

ascertaining the taxpayer’s liability.    Petitioners have not

alleged that section 7491 applies, nor did they introduce the

requisite evidence to invoke that section; therefore, the burden

of proof remains on petitioners.

B.   Filing Status

      Pursuant to section 6013, a husband and wife may generally

file a joint Federal income tax return.    Married individuals, as

defined in section 7703, who elect to file a joint return under

section 6013 are eligible for the filing status of married filing

jointly.   Sec. 1(a)(1).   The determination of whether an

individual is married shall be made as of the close of the
                                - 6 -

taxable year.    Sec. 7703(a)(1).   Whether a taxpayer is married

for Federal income tax purposes is determined by reference to the

laws of the State of the taxpayer’s marital domicile.     See

Sullivan v. Commissioner, 256 F.2d 664 (4th Cir. 1958), affg. 29

T.C. 71 (1957); Dunn v. Commissioner, 70 T.C. 361, 366 (1978),

affd. without published opinion 601 F.2d 599 (7th Cir. 1979); Lee

v. Commissioner, 64 T.C. 552, 556-559 (1975), affd. 550 F.2d 1201

(9th Cir. 1977).

     Petitioners admit that they were not married at the close of

2004.    In addition, Florida State law does not recognize common

law marriage.    Fla. Stat. Ann. sec. 741.211 (West 2005).

     In view of the foregoing, we hold that petitioners are not

entitled to married filing jointly filing status for 2004.

Accordingly, and as allowed by respondent, petitioner shall be

given head-of-household filing status.5




     5
        As petitioner Silverio had no income in 2004 she has no
tax liability for that year; however, by virtue of sec.
6211(b)(4)(B) there is a deficiency in her income tax for 2004
equal to the disallowed additional child tax credit. As
petitioner is likewise liable for the disallowed additional child
tax credit, respondent concedes that such amount will be
collected only once.
                                 - 7 -

C.   Dependency Exemption Deductions6

      Petitioner claims that he is entitled to dependency

exemption deductions for his parents, two nieces, and nephew, who

lived in Mexico throughout 2004.

      A taxpayer may be entitled to claim a dependency exemption

deduction for each individual who qualifies as the taxpayer’s

dependent under sections 151 and 152.    Secs. 151(a), (c), 152.

As relevant herein, an individual must meet the following tests

in order to qualify as a dependent of the taxpayer:    (1) Gross

income test; (2) support test; (3) relationship test; and (4)

citizenship or residency test.    Secs. 151 and 152.

      A taxpayer is entitled to a dependency exemption deduction

for each dependent, as defined in section 152, whose gross income

for the taxable year is less than the exemption amount.      Sec.

151(c)(1)(A).    The exemption amount for 2004 was $3,100.    Sec.

151(d)(1), (4); Rev. Proc. 2003-85, sec. 3.16, 2003-2 C.B. 1184,

1188.     Section 152(a) provides that the term “dependent” means an

individual over half of whose support for the year was received

from the taxpayer.    “Dependent” may include a taxpayer’s parent

or niece or nephew.    Sec. 152(a)(4), (6).   A “dependent” must be

a U.S. citizen or national, or resident of the United States,


      6
        We note that the Working Families Tax Relief Act of 2004,
Pub. L. 108-311, 118 Stat. 1166, amended, inter alia, secs. 151,
152, 24(c), and 2(b)(1)(A)(i) effective for tax years beginning
after Dec. 31, 2004. Thus, we apply the law as it was applicable
to tax year 2004, i.e., as it existed prior to such amendment.
                               - 8 -

Canada, or Mexico at some time during the calendar year in which

the taxable year of the taxpayer begins.   Sec. 152(b)(3); sec.

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

     In order to prove that a taxpayer provided more than half of

the support for his dependents, the taxpayer must establish the

entire amount expended for their support from all sources.

Archer v. Commissioner, 73 T.C. 963, 967 (1980); Blanco v.

Commissioner, 56 T.C. 512, 514-515 (1971).   In addition, the

taxpayer must demonstrate that the dependents’ gross income did

not exceed the exemption amount.   Sec. 151(c)(1)(A), (d)(1), (4).

     The record in the present case is devoid of evidence

regarding either the total amount spent for the support of

petitioner’s parents, nieces, and nephew (by petitioner and from

other sources) or the gross income of petitioner’s parents in

2004.   Thus, although petitioner’s parents, nieces, and nephew

satisfy the relationship and residency tests, petitioner has not

proven either that he satisfies the support test or that his

parents satisfy the gross income test.

     We commend petitioner for contributing to the support of his

relatives in Mexico.   However, he has not shown either the extent

of such support or the gross income of his parents.   Accordingly,

we hold that petitioner is not entitled to dependency exemption

deductions for his parents, nieces, and nephew for 2004.
                                 - 9 -

D.   Child Tax Credit and Additional Child Tax Credit

      Section 24(a) allows taxpayers a credit against tax imposed

for each qualifying child.   Section 24(c)(1)(A) provides that a

“qualifying child” for purposes of section 24 is any individual

if “the taxpayer is allowed a deduction under section 151 with

respect to such individual for the taxable year”.   Section 24(d)

provides that a portion of the credit may be refundable, which

portion is commonly referred to as the additional child tax

credit.

      Because petitioner is not entitled to dependency exemption

deductions for his two nieces and nephew under section 151, he is

not entitled to a child tax credit or additional child tax credit

for them under section 24.

E.   Addition to Tax for Failure To File

      Section 6651(a)(1) imposes an addition to tax for failure to

file a return by its due date.    The addition equals 5 percent of

the tax required to be shown on the return for each month or

fraction thereof that the return is late, not to exceed 25

percent.   Sec. 6651(a)(1), (b)(1).

      Section 7491(c) generally provides that the Commissioner

bears the burden of production with respect to the liability of

an individual for any penalty or addition to tax.   The

Commissioner may meet his burden of production by coming forward

with sufficient evidence indicating that it is appropriate to
                               - 10 -

impose the relevant penalty or addition to tax.      Higbee v.

Commissioner, 116 T.C. 438, 446 (2001).      Respondent has met his

burden of production.

     In the absence of an extension, the last date for petitioner

to have timely filed a 2004 Federal income tax return was Friday,

April 15, 2005.    See sec. 6072(a).    Petitioner’s 2004 Federal

income tax return was dated May 27, 2005, and was not received by

respondent until June 20, 2005.

     “A failure to file a tax return on the date prescribed leads

to a mandatory penalty unless the taxpayer shows that such

failure was due to reasonable cause and not due to willful

neglect.”   McMahan v. Commissioner, 114 F.3d 366, 368 (2d Cir.

1997), affg. T.C. Memo. 1995-547.      A showing of reasonable cause

requires a taxpayer to show that he exercised “ordinary business

care and prudence” but was nevertheless unable to file the return

within the prescribed time.    United States v. Boyle, 469 U.S.

241, 246 (1985); sec. 301.6651-1(c)(1), Proced. & Admin. Regs.

     Petitioner has not offered any evidence to establish that

the late filing was due to reasonable cause and not due to

willful neglect.    See sec. 6651(a)(1).    Accordingly, we hold that

petitioner is liable for the addition to tax under section

6651(a).
                              - 11 -

F.   Section 6662 Penalty

      Section 6662(a) and (b)(1) imposes a penalty equal to 20

percent of the amount of any underpayment attributable to

negligence or disregard of rules or regulations.   The term

“negligence” includes any failure to make a reasonable attempt to

comply with tax laws, and “disregard” includes any careless,

reckless, or intentional disregard of rules or regulations.     Sec.

6662(c).   The Commissioner bears the burden of production with

respect to the accuracy-related penalty.   See sec. 7491(c);

Higbee v. Commissioner, supra.

      Section 6664(c)(1) provides an exception to the imposition

of the accuracy-related penalty if the taxpayer establishes that

there was reasonable cause for, and the taxpayer acted in good

faith with respect to, the underpayment.   Sec. 1.6664-4(a),

Income Tax Regs.   The determination of whether the taxpayer acted

with reasonable cause and in good faith is made on a case-by-case

basis, taking into account the pertinent facts and circumstances.

Sec. 1.6664-4(b)(1), Income Tax Regs.

      Circumstances that may indicate reasonable cause and good

faith include the extent of the taxpayer’s effort to properly

assess the tax liability and an honest misunderstanding of fact

or law that is reasonable in light of the taxpayers’s experience,

knowledge, and education.   Id.   Reliance on the advice of a

professional tax adviser does not necessarily demonstrate
                               - 12 -

reasonable cause and good faith; however, professional advice

constitutes reasonable cause and good faith if, under all the

circumstances, such reliance was reasonable and the taxpayer

acted in good faith.   Id.

     The taxpayer bears the burden of proving that he or she did

not act negligently or disregard rules or regulations.   Rule

142(a); Welch v. Helvering, 290 U.S. at 115; Higbee v.

Commissioner, supra at 447; see sec. 7491(c) (regarding the

Commissioner’s burden of production).

     We are satisfied that petitioner, whose command of the

English language is limited at best, made a good faith effort to

properly determine his 2004 Federal income tax liability and that

his underpayment results from reliance on the advice of a

professional tax adviser combined with an honest misunderstanding

of fact or law that is reasonable in light of his experience,

knowledge, and education.    Accordingly, we hold that petitioner

is not liable for the section 6662(a) accuracy-related penalty

for 2004.

                             Conclusion

     We have considered all of the arguments made by petitioners,

and, to the extent that we have not specifically addressed those

arguments, we conclude that the arguments do not support a result

contrary to those reached herein.
                        - 13 -

To reflect the foregoing,


                                  Decision will be entered

                             under Rule 155.
