Luis Santana & Flor E. Vargas, Petitioners

T.C Memo. 201(cid:0)575-49 UNITED STATES TAX COURT LUIS SANTANA AND F LOR E. VARGAS, Petitioners y. COMMISSIONER OF INTERNAL REVENUE Respondent Docket No. 1 662-10.

Filed Fe niary 22, 2012.

Luis Santana and Flor E. Vargas, pro se.

Vivian N. Rodriguez, foi respof derî .

MEMORANDUM FINDI GS OF FACT AND OPINION

VASQUEZ, J dae: Responden determined a $2,888 deficiency in petitioners' Federal incomé tax for 2008. The issues for decision are (1) whether $ RVED FEB 2 2 2012 petitioners are entitled to a dependency exemption deduction for C.S.;1 and (2) whether petitioners are entitled to an earned income credit.

.

. FINDINGS OF FACT Some of the facts have been stipulated and are so found. The stipulations of facts and the attached exhibits are incorporated herein by this reference.¹ Petitioners resided in Florida when the petition was filed.

Petitioner Luis Santana was formerly married to Maria Rodriguez. They had two children, E.S. and C.S. Mr. Santana and Ms. Rodriguez were divorced on November 21, 2001.

In connection with their divorce Mr. Santana and Ms.

Rodriguez entered into a family mediation unit agreement (mediation agreement).

The mediation agreement designates Ms. Rodriguez as the "primary residential parent". During 2008 C.S. resided with Ms. Rodriguez for more than one-half of the year.

The mediation agreement states that for the purposes of Federal iácome tax exemptions Ms. Rodriguez is allowed to claim C.S. and petitioner is allowed to claim E.S. as long as he is current on his child support obligation. Upon ES.'

It-is the policy of the Court to refer to a minor by his or her initials. See Rule 27(a)(3). Unless otherwise indieäted, Internal Revenue Code in effect for the year in issue, and all Rule references are to the Tax Court Rùles of Practice and Procedure.

11 section referenùes are to the' reaching the aj;e f majority, Mr. Sahtanã and Ms. Ro ig ez are to claim C.S. in alternate years as long as Mr. Santar a is current on his child support obligation.

Although the med ation agreement coes not spécify w i ntitled to claim C.S.

first after E.S. reä hed the age of majority, Ms. Rodrig e did. Ms. Rodriguez claimed C.S. for an odd-nuinbered year, and Mr. Santaha ubsequentÍÿ started claiming C.S.9for ven-numbered years.

In 2008 Mr. S t na véas irréht orÍ his child support obli ation.

. Petitioners rèported $17,433 of Ãèlfleinploymeñt inc me ând ôlaimed an earned incorne cre it ón their Form 1 407 U.S. Individual i conie TafReturÈ for 2008. They also claimed a dependen y eNemption ded eti n for C.S. Petitioners did not attach Fo 8332, Releäse of Claim to Exeñipti à r Child of Divorced or Separated Parents, r any writteñ dec aration with Ñs1Se t C.S. to their 2008 return. Petitioners id not ask Ms. R driguez to sigri a o 8332 or an other document declaring that she would nèt claim C.S ss a d p ñdent.

I. Burden of Proof T

CP1NION

Petitioners ha e neither claimet nbr shown that they satisfied tl e requirem nts of sec ion 7491(a) to shi^t the burden ofpr of o respondent with regard to any factual issue. Accordingly, petitioners bear the burden òf þroof.

Rule 142(a).

II. Dependency Exemption Deduction .

Section 151(a) and (c) allows taxpayers an annual exemption deduction for each "dependent" as defined in section 152. A dependent is either a qualifying child or a qualifying relative: Sec. 152(a). The requirement is disjunctive, and accordingly, satisfaction of either the qualifying child requirement or the qualifying relative requirement allows the individual to be claimed as a"dependent.

A qualifying child must meet four requirements for the taxpayer to qualify för the deduction. S_e_e sec. 152(c)(1)(A)-(D). The pertinent factor here is the residence" requirement: The individual.must have the same principal place of abode as the taxpayer for more than one-half of the taxable year.¹ Sec. 152(c)(1)(B).

Mr. Santana has not demonstrated that C.S. lived with him for more than one-half of 2008. Thus, C.S. is. not Mr. Santana's qualifying.child undersection 152(c). See sec. 152(c)(1)(B).

A qualifying relative must satisfy four requirements for the taxpayer to qualify for the deduction. See sec. 152(d)(1)(A)-(D). The two pertinent

requirements are that the;taxpayer pr ide over one half of the4individual's support for tl3e tax ble year and that he"individual not be a qualifying child ofthe taxpayer or of any other taxpayer for the táxabletyear.

ec 152(d)(1)(C)and (D).

Mr: Santana did not substantia±e the:amount of C.S.'Tsupport from all sources in 2008 1 r. Santana also did nót establish tha C.S was not a qualifying child of any other axpayer for 2008 (e.g., Ms. Rodriguéz). Therefore, C.Shis not M . Santana's qua ifying child under section 152(d).

Section 152(e)(1), hojvever, prpvides a speciál e hereby a noncustodiâl parent may be enti led to claim a dep ndency exemptió d duction for a child notwithstanding thè residency requirementof section 1 2( )(1)(B) the sûp15ort requirementiof sec ion 152(d)(1)(C), and the so-6allèd t e- reaking rule of section 152(c)(4). A child will be treated as4he noncustodial påre t's quàlifyins child or qualifying relative f five requiremen s are met: .S_ee sec 152(e)(1) and (2) Thè relevant requirements here are that the custodial parent i n a writténsdééläfation, in such manney an form as the Secretary maygrescrib ,4 t thè custodial pärent will not claim the c ild as a depender t and that the on ust dial jarent attach that declaration to the n ncustodial parent's return for the ta a e year. Sec.

152(e)(2)(A) and ( ) 6 - The Internal Revenue Service issued Form 8332 in order to standãrdize the written declaration required by section f52(e). See, e.g.,'Chamberláin v.

Commissioner; T.C: Memo. 2007-178. Form 8332 requires a taxpayer to furnish:

(1) the name of the child; (2) the name and Social Security·number öf the noncustodial parent claiming the dependency exemption deduction; (3)-the Social .

Security numbèr of the custodial parent; (4) the signature of the custodial pärerit; (5) the date of the custodial parent's signature; and (6) the year(s) for whiöli the claims were released. See Miller v. Commissioner, 114 T.C. 184, 190 (2000), aff'd on another ground sub nom. Lovejoy v. Commissioner, 293 F.3d 1208 (10th Cir. 2002) Although taxpayers are not required to use Form 8332, any other written declarationtexecuted by the custodial parent must conforni to thÉsùbstance of Form 8332.\ See id. at 189. Section 152(e) allows a noncustodial parent to claim the dependency exemption deduction only when that parent attaches a valid Form,8332·or its equivalent to a Federal income tax return for the taxable year for which he ór she claims the dependency exemption deduction. See Paulson v Comniissioner, T.C. Memo. 1996-560.

Foi caseÈapplying sec. 152(e), s e K.ina v. Commissioner, 121 .C. 245, 252 (2003), Gessic. v. Commissioner, T.C. Memo. 2010-88, Loffer v. Commissioner, T.C. Memo. 2002-298, and Bramante v. Commissioner, T.C. Memo. 2002-228.

Petitioners did not:attach Form 833(cid:0)576or its eciù est to their Förm 1040.

Even if petitioners hadrattached the dediatiòn agréém t, eystill¼otild not have satisfied the requi ements of section 152(é)(2) The di ioh ägreêment cöfîtáins a provision for Mr Santana to share he deduction witl his x-wife iitältérnàtind yearsiónce there is only örie eligiblechild. This alteri ing years'þrövision does not specify whiôh arent-±Mr. Santaña or MsiRödrigii z clàimátC:(cid:0)540!first once E.S. reaches the age ofmajority: Becáúse the mediatio agreement-does nót specify which pare t vias entitled to laim C.S. first, w a oidedrmiñeshether it is Mr.' Santana's r Ms. Ródriguez s yèar tb ölaim C $àunder the mediatioí agféement. Becati e this:alternsting years próvisiorï is o áiñbigiräusi tlíbreds no expliöit declafatioi of Ms/Rödri ue releasing hef rig a the custodial parènt to claim C.S. for thé ear in issue.: _S_eg Boltinghouse v.'C mmissioner, i.C. l(cid:0)570Ieio.

2003-134 (séparati n agreement was¹ ot'so ambilguöüs hå it fàilèd tó áctüälly discláim custodial parent's rightto enemptiòn); White C 1ñmissiönéÚT:C.

Memo. 1996-438 ( etter didliót s bs antively conform o F Ñîi 8332 becáiise it failed to explicitly taté that custodial parent would not laim minor children).

|| Accordingly, we find that C.S. is not treated as-Mr. Santana's qualifying child or qualifying relative under section 152(e), and therefore petitioners are not entitled to the dependency exemption deduction for C.S. for 2008.4 .

III: Earned Income Credit . ,Section J2(a) provides an earned income credit for an eligible individual for so,much of the taxpayer's earned income for the taxable year as does not exceed the earned income amount. To be entitled to an earned income credit for the 2008 tax year, married filing jointly taxpayers must have earned income and adjusted gross income for the taxable year each less than: (i) $41,646:with two or more qualifying children; (ii) $36,995 with one qualifying child; or (iii) $15,880 with no qualifying children. Sec. 32(b)(2), (j)(1); Rev.sProc. 2007-66, sec. 3.07, 2007-2 C.B. 970, 973.. Earned income includes wages, salaries, tips, and òther employee compensation plus net earnings from self-employment.v Sec. 32(c)(2)(A) The term "qualifying child", for purposes<of section 32,,means a qualifying child as defined in section 152(c) without regard to section 152(c)(1)(D) arid (E) Sec.

32(c)(3)(A).

.

As discussed above, C.S. is not a qualifying child of Mr. Santana.⁵ Thus, for purposes of sedtion 32, petitioners have no qualifying children. Petitioners reportèd $17,433 öf net earnings frori self-employment and $18,949 of adjusted gross income, making them ineligiblù for an earned inc mò credit. Consequently, respondent's determination is sustained.

We are not unsympathetic to pjtitioners' positio . We also realize that the statutory requirements may seem to work harsh results to taxpayers, such as Mr.

Santana, who are c irrent in their child support obligatiðns and who are entitled to claim the dependency exemption deductions under the terms of a child support order. However, y e are bound by th&statute as it is wr tten and the accompanying regulations when c nsistent therewith. Michaels v. Coihm ssioner, 87 T.C. 1412, 1417. (1986); Brissett v. Commission±r, T.C. Memo. 2003-310.

To reflect th foregoing, Dec sion will be entered for respondent

2. Respondent does not question that Mr. Santana meets the relationship requirement, the age requirement, or the support requirement.
4. Because the decree is fatally ambiguous, we do not need to reach respondent's arguments regarding the conditionality of the mediation agreement or lack of Social Security numbers.
5. This remai1s true even without regard to sec. 152(c)(1)(D) and (E).