                  T.C. Summary Opinion 2002-25



                     UNITED STATES TAX COURT



                TERENCE M. TAYLOR, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 1340-00S.                 Filed March 28, 2002.



     Terence M. Taylor, pro se.

     Raymond M. Boulanger, for respondent.



     DINAN, 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
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effect for the year in issue, and all Rule references are to the

Tax Court Rules of Practice and Procedure.

     Respondent determined a deficiency in petitioner’s Federal

income tax of $5,757 for the taxable year 1997.

     The issues for decision are:    (1) Whether petitioner is

entitled to head of household filing status; (2) whether

petitioner is entitled to three dependency exemption deductions;

and (3) whether petitioner is entitled to an earned income

credit.    Petitioner does not dispute respondent’s determination

that he is liable for self-employment income tax and entitled to

a deduction therefor.

     Petitioner resided in Buffalo, New York, on the date the

petition was filed in this case.

     Petitioner has three children who have resided with him from

birth:    Tamaris L. Taylor, now deceased, Lakeda S. Taylor, and

Twila N. Taylor.    At the end of the year in issue, these children

were 20, 17, and 6 years old, respectively.    Petitioner worked 20

hours per week, Tamaris was not employed, and Lakeda and Twila

were in school.    The children’s mother resided in a portion of

the same house as petitioner and the children and was employed as

a dietician.    Petitioner and the children’s mother have never

been married, and custody of the children has never been legally

established.
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     Petitioner filed a Federal income tax return for taxable

year 1997 as a head of household.   He claimed three dependency

exemption deductions, one for each of his children, and he

claimed an earned income credit with two qualifying children--

Lakeda and Twila.   He reported the following income tax

liability:

     Wage income                          $11,126
     Standard deduction                     6,050
     Personal exemption deduction           2,650
     Dependency exemption deductions        7,950
     Taxable income                           -0-

     Total tax                                -0-
     Earned income credit                   3,656

In the statutory notice of deficiency, respondent changed

petitioner’s filing status to single, disallowed the three

dependency exemption deductions, and disallowed the full amount

of the claimed earned income credit, because petitioner had not

provided supporting information.

     At trial, respondent’s sole argument was that petitioner is

not entitled to head of household filing status, the dependency

exemption deductions, and the earned income credit, because he

has not provided documentary evidence proving he has legal

custody of the children.

     Among other requirements, a taxpayer generally is entitled

to a dependency exemption deduction for a child if the taxpayer

provides over half of the child’s support during the taxable

year.   Secs. 151(a), (c), and 152(a).   The child’s gross income
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must not exceed the exemption amount, or the child must be either

under the age of 19 or a student under the age of 24.       Sec.

151(c)(1).

     Generally, an unmarried taxpayer is entitled to head of

household filing status if the taxpayer maintains a household

which is the principal place of abode of at least one unmarried

child.   Sec. 2(b)(1).

     Under section 32, an eligible individual is allowed a credit

which is calculated as a percentage of the individual’s earned

income, subject to certain limitations.     Sec. 32(a)(1).    Any

individual with a qualifying child is an eligible individual.

Sec. 32(c)(1).    As is relevant here, the definition of a

qualifying child for purposes of section 32 includes a child of a

taxpayer who has the same principal place of abode as the

taxpayer for more than half of the taxable year.     Sec.

32(c)(3)(A).    A qualifying child must be either under the age of

19 (or a student under the age of 24) at the close of the taxable

year, or be permanently and totally disabled at any time during

the year.    Sec. 32(c)(3)(C).

     We found petitioner to be a credible witness and accept his

testimony concerning his relationship with his children and their

residence during the year in issue.      On these facts, we find it

unnecessary for petitioner to produce legal documentation proving

he had custody of his children during that year, as respondent
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argues is necessary.   Petitioner has established to our

satisfaction that he meets the requirements for each of the

relevant Code provisions.   With respect to the dependency

exemption deductions, filing status, and earned income credit,

there is scant evidence in the record concerning the financial

support of the children, the cost of maintaining their household,

or the income of the children’s mother.       However, because

respondent was clear at trial that his sole disagreement with

petitioner was over legal custody of the children, we find that

respondent has conceded these issues.       We accordingly hold that

petitioner is entitled to head of household filing status, the

dependency exemption deductions, and the earned income credit as

claimed.

     Reviewed and adopted as the report of the Small Tax Case

Division.

     To reflect the foregoing,

                                         Decision will be entered

                                 under Rule 155.
