                  T.C. Summary Opinion 2002-24



                     UNITED STATES TAX COURT



                KAREN ANN CICCHINI, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 4127-01S.               Filed March 26, 2002.


     Karen Ann Cicchini, pro se.

     John W. Strate, for respondent.



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

the provisions of section 7463 of the Internal Revenue Code in

effect at the time that the petition was filed.1   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, all subsequent section
references are to the Internal Revenue Code in effect for 1998,
the taxable year in issue.
                                 - 2 -

     Respondent determined a deficiency in petitioner's Federal

income tax for 1998 in the amount of $2,134.

     After a concession by respondent,2 the issues for decision

are as follows:

     (1) Whether petitioner is entitled to deductions for

dependency exemptions for her two sons.    We hold that she is.

     (2) Whether petitioner is entitled to a child tax credit in

respect of her two sons.   We hold that she is.

Background

     Many of the facts have been stipulated, and they are so

found.

     At the time that the petition was filed, petitioner resided

in Santa Maria, California.

     A.   Petitioner’s Marriage and Children

     In May 1980, petitioner and Dean William Anker (Mr. Anker)

were married in West Point, New York.     The couple had two sons:

Francis Gregory Anker, who was born in June 1982, and Daniel

Thomas Anker, who was born in January 1984 (collectively, the

children or petitioner’s sons).

     B.   Petitioner’s Divorce

     In or about 1984, petitioner and Mr. Anker experienced

marital discord, and divorce proceedings were commenced.    Both



     2
       Respondent concedes that petitioner’s filing status for
1998 is head-of-household.
                               - 3 -

petitioner and Mr. Anker were represented by counsel in these

proceedings.

     On September 11, 1984, the District Court of Coryell County,

Texas (the Texas State court) entered an Agreed Decree of Divorce

(the divorce decree).   In the divorce decree, the Texas State

court awarded custody of the children to petitioner and ordered

Mr. Anker to pay:

     child support in the amount of $400.00 per month, with
     the first payment being due and payable on the 1st day
     of July, 1984, and a like payment being due and payable
     on the same day of each month thereafter until the date
     any child reaches the age of 18 years * * * .

     In the divorce decree, the Texas State court also ordered

that Mr. Anker:

     shall have the right to claim the dependency exemptions
     for the children of the marriage for the purpose of
     federal income taxes for 1984 and all subsequent years,
     so long as all child support herein ordered to be paid
     by claimant is timely paid.

     C.   Mr. Anker’s Failure To Make All Child Support Payments

     For several years after the entry of the divorce decree, Mr.

Anker did not conscientiously discharge his duty to pay monthly

child support as ordered by the Texas State court, and on more

than one occasion petitioner found it necessary to ask the Texas

State court to enforce its child support order.   This pattern

came to a climax on April 12, 1988, when the Texas State court

issued an order finding that Mr. Anker was in arrears in the

payment of child support in the amount of $15,200 and holding him
                               - 4 -

in civil contempt for nonpayment.3

     While contemplating the Texas State court’s order of April

12, 1988, apparently from within a cell of the Coryell County

jail, Mr. Anker had an epiphany and, on April 20, 1988, he paid

$15,000 into the registry of the Texas State court.    Of this

amount, $13,777.98 was paid over to petitioner as child support.4

Also, for each of the 100 months from May 1988 through August

1996, Mr. Anker timely paid $425, an amount representing his

monthly court-ordered child support of $400 plus $25 toward his

remaining child-support arrearage.     The additional amount paid,

however, did not extinguish Mr. Anker’s arrearage.

     D.   The Agreed Order of August 9, 1996

     On August 9, 1996, an Agreed Order was presented to the

Texas State court for its approval.     Petitioner was represented

by counsel at the time, who approved the order “as to form”.

     The Texas State court approved the Agreed Order and entered

it on August 9, 1996.   In the Agreed Order, the Texas State court



     3
        The Texas State court’s order determined only Mr. Anker’s
arrearage through the month of January 1988. Mr. Anker did not
make the payments that were due on the 1st day of February,
March, and April 1988. Thus, as of the date of the Texas State
court’s order, Mr. Anker’s arrearage actually was $16,400; i.e.,
$15,200 plus $400 x 3.
     4
       The balance of the $15,000 payment, $1,222.02, was
allocated to attorney’s fees ($962.50) and court costs ($259.52).
     Although Mr. Anker’s payment did not fully satisfy the
arrearage, the Texas State court apparently released him from
custody.
                                 - 5 -

increased Mr. Anker’s monthly child support obligation from $400

to $593.41, effective September 1, 1996.

     E.     Petitioner’s Federal Income Tax Return for 1998

     Petitioner timely filed a Federal income tax return for

1998.     On her return, petitioner designated her filing status as

head-of-household, and she claimed her two sons as dependents.

Petitioner also claimed a child tax credit in respect of her

sons.

     F.    The Notice of Deficiency

     In the notice of deficiency, respondent determined that

petitioner was not entitled to deductions for dependency

exemptions because the divorce decree authorized Mr. Anker to

claim those deductions.    Respondent also determined that

petitioner was not entitled to the child tax credit.     Finally,

respondent determined that petitioner’s filing status is single.

However, as previously mentioned, respondent conceded at trial

that petitioner’s filing status is head-of-household, as

originally designated by petitioner on her return.

Discussion

     A.    Deductions for Dependency Exemptions

     Section 151(a) authorizes deductions for the exemptions

provided by that section.     In particular, section 151(c)(1)

provides an exemption for each of a taxpayer’s dependents as

defined in section 152.
                               - 6 -

     Section 152(a)(1), as relevant herein, defines the term

“dependent” to mean a taxpayer’s child, provided that more than

half of the child’s support was received from the taxpayer or is

treated under section 152(e) as received from the taxpayer.

     Section 152(e)(1), as relevant herein, provides as a general

rule that in the case of a child of divorced parents, the child

shall be treated as receiving over half of his or her support

from the custodial parent.   However, section 152(e)(4) provides

an exception to the general rule for certain pre-1985

instruments.

     Section 152(e)(4)(A) provides that a child of divorced

parents shall be treated as receiving over half of his or her

support from the noncustodial parent if:   (1) A qualified pre-

1985 instrument between the child’s parents provides that the

noncustodial parent shall be entitled to claim the child as a

dependent; and (2) the noncustodial parent provides at least $600

for the support of the child during the year in issue.

     Section 152(e)(4)(B), as relevant herein, defines the term

“qualified pre-1985 instrument” to mean a divorce decree:   (1)

That is executed before January 1, 1985; (2) that contains a

provision providing that the noncustodial parent shall be

entitled to claim the child as a dependent; and (3) that is not

modified on or after January 1, 1985, to expressly provide that
                                - 7 -

the provisions of section 152(e)(4) shall not apply to such

decree.

     The parties disagree whether section 152(e)(4) applies in

the present case.   The dispute centers on whether Mr. Anker was

in arrears in the payment of child support.   In this regard, it

should be recalled that in the divorce decree, the Texas State

court directed that Mr. Anker

     shall have the right to claim the dependency exemptions
     for the children of the marriage for the purpose of
     federal income taxes for 1984 and all subsequent years,
     so long as all child support herein ordered to be paid
     by claimant is timely paid. [Emphasis added.]

Respondent appears to concede that if Mr. Anker were in arrears

in the payment of child support, then section 152(e)(1), rather

than section 152(e)(4), would provide the rule for decision and

petitioner would prevail.   See Flatt v. Commissioner, T.C. Memo.

1986-495, wherein we held that “where a divorce agreement

conditions the claim for dependency exemptions upon the

performance of specific obligations, it is appropriate for this

Court to determine if, in fact, the party obligated to meet such

conditions has fully complied.”

     Mr. Anker’s court-imposed child support obligation for the

14-1/2 year period from July 1984 through December 1998 was

$75,015.48.5   The exhibits in the present case, particularly the



     5
       Computed as follows: $400/month x 146 months plus
$593.41/month x 28 months.
                                   - 8 -

Child Support Record maintained by the Texas State court,

indicate that Mr. Anker paid $74,893.46 for that period.6

Accordingly, it cannot be said that “all child support herein

ordered to be paid by claimant [was] timely paid.”

     In view of the foregoing, we hold that petitioner is

entitled to deductions for dependency exemptions for her two

sons.       Sec. 152(e)(1).

     B.       Child Tax Credit

     Section 24(a) authorizes a $400 child tax credit with

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

“qualifying child” is defined in section 24(c).        As relevant

herein, 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 entitled to

deductions under section 151 for dependency exemptions for her

two sons.       Accordingly, each of petitioner’s sons is a

“qualifying child” within the meaning of section 24(c).

Accordingly, and because respondent does not suggest that

petitioner does not otherwise satisfy the requirements of

applicable law, petitioner is entitled to a child tax credit

under section 24(a) in respect of her sons.




        6
            This amount is net of dishonored checks.
                              - 9 -

     C.   Conclusion

     Reviewed and adopted as the report of the Small Tax Case

Division.

     To reflect respondent’s concession and our disposition of

the disputed issues,



                                   Decision will be entered

                              for petitioner.
