                       T.C. Memo. 2000-117




                      UNITED STATES TAX COURT



                  KEITH CHIOSIE, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No.   4580-99.            Filed April 5, 2000.



     Keith Chiosie, pro se.

     Robin L. Peacock, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     ARMEN, Special Trial Judge:   Respondent determined a

deficiency and an accuracy-related penalty under section 6662(a)

in petitioner's Federal income tax for the taxable year 1997 in

the respective amounts of $3,634 and $726.80.1


     1
        All section references are to the Internal Revenue Code
in effect for the taxable year in issue, and all Rule references
                                                   (continued...)
                               - 2 -


     The issues for decision are as follows:

     (1) Whether petitioner’s proper filing status is head of

household, as petitioner contends, or married filing separately,

as respondent determined.

     (2) Whether petitioner is entitled to the earned income

credit as claimed on his income tax return for the year in issue.

     (3) Whether petitioner is liable for the accuracy-related

penalty under section 6662(a) for negligence or intentional

disregard of rules or regulations.

     The resolution of the first two issues turns on whether

petitioner, a married individual, should not be considered as

married pursuant to the provisions of section 7703(b).


                         FINDINGS OF FACT

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

found.   Petitioner resided in Monroe, New York, at the time

that his petition was filed with the Court.

     Throughout 1997, petitioner was married to Mary Chiosie

(Mrs. Chiosie), although the couple was emotionally estranged.

Nevertheless, petitioner and Mrs. Chiosie both resided in the

same single-family residence located in Monroe, New York (the

Monroe residence).




     1
      (...continued)
are to the Tax Court Rules of Practice and Procedure.
                                - 3 -


     Petitioner and Mrs. Chiosie chose to reside in the same

residence, despite their marital difficulties, for financial

reasons and because they wanted to remain involved in the daily

lives of their three sons.

     Petitioner is by profession a truck driver.    During 1997,

petitioner owned a sole proprietorship, the business of which

involved the transport of small school buses from the

manufacturing plant in Pampa, Texas, to school districts

throughout the United States.   Petitioner generally hired other

drivers to physically transport the school buses.    Accordingly,

petitioner was able to conduct his business from the Monroe

residence, an arrangement that he favored because of his desire

to remain actively involved in the lives of his three sons.

However, from time to time petitioner was required to travel to

Texas for business reasons.   During such trips, which generally

were of short duration, petitioner either stayed at a motel or

made more economical arrangements consistent with the transient

nature of his stay.

     In 1997 petitioner earned a net profit from the operation of

his proprietorship in the amount of approximately $14,600.

     In 1997 Mrs. Chiosie was employed as a restaurant hostess,

and she received wages in the amount of approximately $9,400.

     Both petitioner and Mrs. Chiosie contributed financially to

the upkeep and maintenance of the Monroe residence.
                               - 4 -


     Petitioner and Mrs. Chiosie filed separate Federal income

tax returns for 1997.

     In filing his 1997 return, petitioner utilized Form 1040,

and he listed his address as that of the Monroe residence.

Petitioner specified his filing status as head of household, and

he claimed dependency exemptions for two of his three sons.

Petitioner also claimed an earned income credit in the amount of

$3,310.

     Respondent began an examination of petitioner’s 1997 return

on June 30, 1998.   Thereafter, in a notice of deficiency dated

December 1, 1998, respondent determined that petitioner’s proper

filing status was married filing separately and not head of

household.   Respondent also disallowed the earned income credit

claimed by petitioner.2   Finally, respondent determined that

petitioner is liable for the accuracy-related penalty under

section 6662(a) for negligence or intentional disregard of rules

or regulations.

                              OPINION

Issue 1.   Petitioner’s Filing Status

     We begin with petitioner’s filing status.   Section 2(b)

defines head of household.   As relevant herein, section 2(b)(1)

provides that an individual shall be considered a head of a



     2
        Respondent did not disallow the two dependency deductions
claimed by petitioner.
                                - 5 -


household if such individual is not married at the close of his

taxable year.   Section 2(c) provides that an individual shall be

treated as not married at the close of the taxable year if such

individual is so treated under the provisions of section 7703(b).

     Section 7703(b) provides that an individual who is married

shall not be considered as married if three requirements are

satisfied.   The first requirement is that the individual maintain

as his home a household which constitutes for more than one-half

of the taxable year the principal place of abode of a child who

is the tax dependent of such individual.   The second requirement

is that the individual furnish over one-half of the cost of

maintaining such household during the taxable year.   The third

requirement is that for the last 6 months of the taxable year,

the individual’s spouse is not a member of such household.

     The record in this case establishes that petitioner and Mrs.

Chiosie, as well as their three sons, resided in the Monroe

residence throughout 1997.   However, petitioner contends that he

did not live with Mrs. Chiosie because they were emotionally

estranged and did not share the same bedroom.   The pivotal issue

is therefore whether petitioner and Mrs. Chiosie were living

apart in separate households.   If they were not living apart in

separate households, then section 7703(b) would not apply and

petitioner’s filing status is married filing separately and not

head of household.
                               - 6 -


     The concept of "living apart" has been considered by this

and other courts.   Generally, "living apart" connotes living in

separate residences.   Lyddan v. United States, 721 F.2d 873, 876

(2d Cir. 1983); Washington v. Commissioner, 77 T.C. 601, 605

(1981); Hopkins v. Commissioner, T.C. Memo. 1992-326; Hertsch v.

Commissioner, T.C. Memo. 1982-109.     But see Sydnes v.

Commissioner, 577 F.2d 60 (8th Cir. 1978), affg. in part and

revg. and remanding in part 68 T.C. 170 (1977).    In Washington v.

Commissioner, supra, this Court held that "living apart" requires

a geographical separation and means living in separate

residences; i.e., living under separate roofs.    Cf. Dawkins v.

Commissioner, T.C. Memo. 1991-225; Coltman v. Commissioner, T.C.

Memo. 1991-127, affd. 980 F.2d 1134 (7th Cir. 1992); LaBow v.

Commissioner, T.C. Memo. 1987-191, affd. without published

opinion 863 F.2d 45 (2d Cir. 1988).    When the parties live under

one roof, we have specifically refused to explore the quality of

a marriage and adopt some form of constructive absence under the

circumstances.   See Becker v. Commissioner, T.C. Memo. 1995-177.

     In view of the foregoing, we hold that petitioner did not

live separately from Mrs. Chiosie in 1997.    Accordingly,

petitioner is not considered as unmarried pursuant to section

7703(b), and his filing status is necessarily married filing

separately.   Respondent’s determination on this issue is

sustained.
                                  - 7 -


Issue 2.   Earned Income Credit

     We turn now to section 32.     That section provides for an

earned income credit.    However, in order to be entitled to an

earned income credit, the taxpayer must satisfy a number of

requirements.    One of the requirements is that the taxpayer, if

married, must file a joint return with his or her spouse.      See

sec. 32(d).

     Because petitioner is not considered as unmarried pursuant

to section 7703(b), and because he and Mrs. Chiosie filed

separately and not jointly, an earned income credit is not

allowable as a matter of law.     See Presley v. Commissioner, T.C.

Memo. 1996-553; Becker v. Commissioner, supra.     Respondent’s

determination on this issue is sustained.

Issue 3.   Accuracy-Related Penalty

     Finally, we turn to the accuracy-related penalty.

Section 6662(a) and (b)(1) provides that if any portion of an

underpayment of tax is attributable to negligence or disregard of

rules or regulations, then there shall be added to the tax an

amount equal to 20 percent of the amount of the underpayment that

is so attributable.    The term "negligence" includes any failure

to make a reasonable attempt to comply with the statute, and the

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

disregard.    See sec. 6662(c).   A taxpayer will not be liable for

the penalty under section 6662 if the taxpayer establishes that
                                 - 8 -


there was reasonable cause for the underpayment and that he or

she acted in good faith with respect to the underpayment.    See

sec. 6664(c).

     The taxpayer bears the burden of proving that the negligence

penalty is inapplicable.   See Rule 142(a); INDOPCO, Inc. v.

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

U.S. 111 (1933); Gircsis v. Commissioner, T.C. Memo. 1992-244;

cf. sec. 7491(c), effective for court proceedings arising in

connection with examinations commencing after July 22, 1998.

     We conclude that petitioner is liable for the accuracy-

related penalty.   Of particular significance is the fact that

there is no persuasive evidence that petitioner ever properly

inquired whether his marital status allowed him to file as head

of household or whether he was entitled to claim an earned income

credit without filing a joint return.    In other words, there is

no persuasive evidence that petitioner made a reasonable attempt

to comply with applicable law.    Further, the fact that Mrs.

Chiosie may have refused to file a joint return because of

marital discord provides no justification for petitioner to claim

a filing status to which he is clearly not entitled.

     Finally, petitioner contends that certain events that

occurred during the examination stage of this case justify his

reporting position.   We disagree; such events are not material to

the issue whether petitioner made a reasonable attempt to comply
                               - 9 -


with applicable law.   Rather, the resolution of such issue

requires us to focus on relevant facts and circumstances that

existed at the time that petitioner filed his 1997 return.

     In view of the foregoing, we sustain respondent's

determination on this issue.

Conclusion

     To give effect to our disposition of the disputed issues,



                                       Decision will be entered

                               for respondent.
