                          T.C. Memo. 1996-553



                        UNITED STATES TAX COURT


                  THOMAS GLEN PRESLEY, Petitioner v.
             COMMISSIONER OF INTERNAL REVENUE, Respondent



        Docket No. 18785-94.                 Filed December 23, 1996.


        Thomas Glen Presley, pro se.

        Michael D. Zima, for respondent.


                MEMORANDUM FINDINGS OF FACT AND OPINION

        DEAN, Special Trial Judge:     This case was assigned pursuant

to the provisions of section 7443A(b)(3) and Rules 180, 181, and

182.1




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

     Respondent determined a deficiency in petitioner's 1992

Federal income tax in the amount of $2,506 and an accuracy-

related penalty under section 6662(a) in the amount of $501.

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

entitled to deductions for dependency exemptions; (2) whether

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

whether petitioner is entitled to an earned income credit; and

(4) whether petitioner is liable for the accuracy-related penalty

under section 6662(a).

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

The stipulation of facts and the exhibits received into evidence

are incorporated herein by reference.    Petitioner resided in

Tampa, Florida, at the time he filed his petition.

                         FINDINGS OF FACT

     During 1992, petitioner resided in Tampa, Florida.

Petitioner lived apart from his wife, Dorothy Presley, at all

times in 1992.

     On his 1992 Federal income tax return petitioner used head

of household filing status and claimed three dependency

exemptions; one each for himself, his son (Thomas Howard

Presley), and his daughter (Leah Marie Presley).    He also claimed

an earned income credit in the amount of $1,835.

                             OPINION

     Respondent's determinations are presumed correct, and

petitioner bears the burden of proving otherwise.    Rule 142(a);
                                -3-

Welch v. Helvering, 290 U.S. 111, 115 (1933).    Moreover,

deductions are a matter of legislative grace, and petitioner

bears the burden of proving that he is entitled to any deduction

claimed.   Rule 142(a); New Colonial Ice Co. v. Helvering, 292

U.S. 435, 440 (1934); Welch v. Helvering, supra at 115.

1.   Dependency Exemptions

     Respondent determined that petitioner is not entitled to

claim any dependency exemptions other than for himself.

     Section 151(c)(1) allows a taxpayer to claim an exemption

for each dependent (as defined by section 152) whose gross income

is less than the exemption amount or who is a child of the

taxpayer and meets certain age requirements.    Section 152(a)(1)

provides that the term "dependent" includes a taxpayer's child

"over half of whose support, for the calendar year in which the

taxable year of the taxpayer begins, was received from the

taxpayer (or is treated under subsection (c) or (e) as received

from the taxpayer)".

     In the case of a child whose parents live apart at all times

during the last 6 months of the calendar year, generally the

custodial parent (i.e., the parent having custody of the child

for the greater portion of the calendar year) is treated as

providing over one-half of the support of the child.   Sec.

152(e)(1).   An exception to this general rule exists, however,

where the custodial parent signs a written declaration that such

custodial parent will not claim such child as a dependent, and
                                -4-

the noncustodial parent attaches such written declaration to the

noncustodial parent's return for the taxable year.   Sec.

152(e)(2).

     Although petitioner provided inconsistent testimony as to

where the children resided during 1992, he did admit that they

were with him "on and off" and that they attended elementary

school for the entire year in Zephyr Hills, the town where his

wife was living.   Petitioner estimated that Zephyr Hills is

approximately 25 miles away from Tampa.

     Based on the record, petitioner has not proven that he had

custody of the children for the greater portion of the calendar

year.   Consequently, petitioner's wife, as the custodial parent,

is deemed to have provided more than half the support of the

children, pursuant to the general rule of section 152(e)(1).

        Petitioner has further not established that an exception

to the general rule of section 152(e)(1) (whereby the custodial

parent is treated as providing over one-half of the support of

the child) is applicable.   At trial, petitioner submitted a Form

8332 (Release of Claim to Exemption for Child of Divorced or

Separated Parents), wherein Dorothy Presley ostensibly released

her claim to exemptions for the children for the 1992 tax year.

However, this form is dated February 8, 1994, and it was not

attached to petitioner's Form 1040A, which is dated February 27,

1993.   Consequently, petitioner has not established that the

exception provided for in section 152(e)(2) is applicable to this
                                 -5-

case.   Sec. 152(e)(2)(B); see also sec. 1.152-4T, Q & A-3,

Temporary Income Tax Regs., 49 Fed. Reg. 34459 (Aug. 31, 1984).

     Petitioner has not shown that he was the custodial parent of

his children under section 152(e)(1) or that he timely filed a

Form 8332.   It follows, therefore, that petitioner is not

entitled to claim dependency exemption deductions for his

children for the year 1992 because they are not his dependents as

that term is defined in section 152(a).

2.   Head of Household Filing Status

     Respondent determined that petitioner is not entitled to

head of household filing status because he did not satisfy the

requirements necessary for a married taxpayer to claim such

status.

     One of the requirements to qualify for head of household

filing status is that an individual must not be married at the

close of the taxable year.    Sec. 2(b).    However, a married

taxpayer can meet the "not married" requirement if he is treated

as not married under section 7703(b).      Sec. 2(c).

     Section 7703(b) provides that a married taxpayer living

apart from his spouse with a dependent child will not be

considered as married if:    (1) He files a separate tax return;

(2) he pays more than half the cost of maintaining his household

for the tax year; (3) his spouse is not a member of the household

during the last six months of the tax year; and (4) the household

is for more than one-half of the taxable year the principal place
                                  -6-

of abode of the taxpayer's child for whom the taxpayer can claim

a dependency exemption.

     As discussed above, petitioner has failed to establish that

his household was for more than one-half of the taxable year the

principal place of abode of either of his children, and that he

is entitled to claim a dependency exemption for either of the

children.   Accordingly, we hold that petitioner is not entitled

to head of household filing status for 1992.

3.   Earned Income Credit

     Respondent determined that petitioner is not entitled to an

earned income credit because he did not file a joint return with

his wife.

     Section 32 provides for an earned income credit for certain

"eligible individuals".     Section 32(d) provides, however, that a

married individual (within the meaning of section 7703) is only

eligible for the earned income credit if a joint return is filed

for the taxable year.

     Petitioner, a married individual within the meaning of

section 7703, did not file a joint return for 1992.    It follows,

therefore, that petitioner is not entitled to an earned income

credit for 1992.   Sec. 32(d).2

     2
      Additionally, petitioner has failed to establish that he is
an "eligible individual" for purposes of the earned income
credit. Sec. 32(c)(1)(A) defines an "eligible individual" as any
individual who has a "qualifying child" for the taxable year.
Sec. 32(c)(3)(A) defines a "qualifying child" as an individual
                                                   (continued...)
                                 -7-

4.   Accuracy-Related Penalty

     Finally, respondent determined that petitioner is liable for

the accuracy-related penalty under section 6662(a).

     The accuracy-related penalty is equal to 20 percent of any

portion of underpayment attributable to a taxpayer's negligence

or disregard of rules or regulations.    Sec. 6662(a) and (b)(1).

The term "negligence" includes any failure to do what a

reasonable and ordinarily prudent person would do under the same

circumstances.    Neely v. Commissioner, 85 T.C. 934, 947 (1985).

The term "disregard" includes any careless, reckless, or

intentional disregard.   Sec. 6662(c).   The penalty does not apply

to any portion of an underpayment for which there was reasonable

cause and with respect to which the taxpayer acted in good faith.

Sec. 6664(c).    Respondent's determination imposing the accuracy-

related penalty is presumed correct, and taxpayers bear the

burden of proving that they are not liable for the accuracy-

related penalty imposed by section 6662(a).   Rule 142(a);

Tweeddale v. Commissioner, 92 T.C. 501, 505 (1989).

     Petitioner offered no evidence to meet his burden of proof

with respect to the accuracy-related penalty, and, accordingly,

we sustain respondent on this issue.


(...continued)
who, among other things, has the same principal place of abode as
the taxpayer for more than one-half of the taxable year. As
discussed above, petitioner has failed to establish that either
of his children had the same principal place of abode as he did
for more than one-half of the taxable year.
                            -8-

To reflect the foregoing,

                                       Decision will be entered

                                  for respondent.
