Reginald C. Scott, Petitioner

Summary Opinion 2008-13 5

UNITED STATES TAX COUR T

REGI ALD C . SCOTT, Petitioner v_ . COMMISSION R OF INTERNAL REVENUE, Responden t Docket No .'369-016S . Filed October 28, 2008 .

GERBER , Judge : This case was heard pursuant to the- provisions 'of section 74 .631 of'the -Internal,Revenue Code in effect when'the petit on was filed . 'Pursuant to section 7463 (b ) Unless otherwise indicated, all section references are t o the Internal Revenue ode in effect for 2003, the taxable year,i issue, and all Rule references are to the Tax Court Rules o f Practice and Procedur

SERVED OCT 2 8 .2008

the decision to be entered is not reviewable by any other court, and this opinion shall not be treated as precedent for any other case' .

Respondent determined a $5,347 deficiency in, petitioner's 2003 Federal income tax due solely to the disallowance of two dependency exemption deductions and related child tax credits, and the adjustment of petitioner's filing status from head of household to single .

t Background Petitioner resided in Houston, Texas at the time hi s petition was filed in this case . Petitioner filed his 2003 Form 1040, U .S . Individual Income Tax Return, as a head of household and claimed dependency exemption deductions for two daughters .

Petitioner also claimed a child tax credit with respect to his dependents .

Petitioner's daughters were born on November 13, 1978, and February 27, 1992, respectively . During 2003 petitioner's daughters were 24 and 11 years of age, and petitioner's 24-year- old daughter was a full-time college student . Petitioner was married to their mother, Marilyn Scott, until their divorce on June 1, 1994 . Marilyn Scott was-awarded custody of petitioner's daughters . The divorce decree also outlines times whe n petitioner would have visitation with his children, includin g holidays, birthdays, and weekends . Petitioner wasordered .to pay child support . of $7 0 per month, which was for three childre n including his two d ughters Child support . was payable until 'the youngest child reac ed 18,years of age-and through the end of tz'h e high school year o f the youngest ' child' . s 18th . birthday . , In . addition t o the $700 monthly child support payment, petitioner, and his ormer -wife each were required to pay one-hal f of . all health car e paid for by insurance, including medica l dental, drugs, etc .

Durng.`2003 , 26 payments were withheld fro m petitioner's wages in the amounts of $323 .08 or a .total of $8,400 .0 8 for the year . The divorce'rdecree also has a .. section -labeled "Excessive Tax .Withholding" which includes the followi n order :

"For ''the purposes of-federal income tax withholding , Reginal Charles=Scott is ORDERED : AND DECREED to claim no fewer than the actual number of his dependents'on-Form W-4 . " Petitioner pai d additional amounts, including-=$1,200 to- $1, 600- annually fo r edical . .insurance coverage . Petitioner , however, was not awa e of and . cannot show the total amount that was expended-for the support of his daughters .

Discussio n Petitioner cla i ed dependency exemption deductions for tw o children for which h was not the custodial parent during 2003 .

In addition to claim them as dependents,-petitioner, filed hi ' 2003 income tax retu n'using head'of household status, and he` claimed a child-tax redit. based'on their status- as dependents :

In'general, the Commissioner's determinations set forth in a notice of deficiency are presumed correct, and the taxpayer bears the burden of showing that the determinations are in error . Rule 142(a) ; Welch v . Helverina ., 290 U .S . 111, 115 (1933) . Deductions and credits are a matter of legislative grace, and the taxpayer bears the burden of proving entitlement to any deduction or credit claimed on a return . See INDOPCO, Inc . v . Commissioner , 503 U .S . 79, 84 (1992) ; Wilson v . Commissioner , T .C . Memo . 2001- 139 .

Pursuant to section 7491(a) ., the .burden of proof as t o factual matters shifts to the Commissioner under certai n circumstances . Petitioner has neither alleged that section 7491(a) applies nor established his compliance with .the requirements of section 7491(a)(2)(A) and (B) to substantiate items, maintain records, and cooperate fully with respondent's reasonable requests . )Petitioner therefore bears the burden of proof .

Petitioner argues that the "Excessive Tax Withholding" clause in his divorce decree entitled him to claim the dependency exemption deductions for his children . Respondent disagreed and, at trial, explained that the withholding clause was .:intended to ensure that petitioner had an adequate after-withholding tax ne t pay to satisfy the court-ordered support payments that were bein g automatically withheld by his employer . The disputed clause 5 _ states : "For the p rposes of federal income tax withholding , Reginald Charles Sc tt is ORDERED AND DECREED to claim no fewe than the actual num er of his ;dependents on Form W-4 ." .'Althou h this Court is not a le'to agree with respondent's . interpretation of-that clause, w e re4certain that it was . not intended to give petitioner the sol e ri ght to' claim the Federal tax dependenc y exemption deductions for the children . Accordingly, we procee d to decide whether p e titioner has shown that he ; .is entitled t o claim the dependency exemption deductions under the statutor y requirements .

The issues we c nsider turn on whether either o petitioner's daughte s was a dependent as defined in section 15 for .20031 . ' A _taxpaye .may be entitled to claim as a deduction a exemption amount for each of his or her dependents . Seca 151(c An individual must m + et the : following five tests in order to,.

qualify as a,depe .nde t .of the taxpayer : -(I) Support test ; (2 ) relationship or hou s hold test ; (3) citizenship or residency test ; ( 4) gross inco e test ; and (5) joint return test . Secs .

15 .1 and 152 . If the individual fails'any-of .these tests, he o r she does'not qualify as a'dependent .

For a claimed d pendent to°satisfy the support test a taxpayer generally mast provide more than one-half of the claimed .

dependents support or the=calendar year in which the taxabl e year of the taxpayer begins . Sec . 152(a) ., The taxpayer must 6 - initially demonstrate, by competent evidence, the total amount of the ,support furnished by all sources for the taxable, ;i,,.year at issue .

Blanco v . Commissioner , 56 T .C . 512, 514 (1971) ; Cotton v . Commissioner , T .C . Memo . 2000-333 . If the total amount of support is not established, then it is generally not-Ppossible to conclude that the taxpayer provided more than one-half of .the support to the claimed dependent .

Blanco v . Commissioner , supra at 514-515 ; Cotton v . Commissioner , supra . Support ''includes "food, shelter, clothing, . medical and dental care, education, and the like ." Sec . 1 .152-1(a)(2)(i), Income Tax Regs .

Petitioner testified and provided evidence that he contributed money toward his daughters' expenses . Sadly for petitioner, however, he was unable to establish the total amount of support provided to each child for 2003, and, accordingly, petitioner has failed to show that he provided more,,,than one-half of,each daughter's support . See Blanco v . Commissioner , supra at 514-515 .

Petitioner also contended that he made an agreement with the attorneys who represented the parties in his divorce proceeding that petitioner would be entitled to claim the daughters as dependents on his separate tax returns . Petitioner .,has not provided any evidence of such an agreement other than his vague testimony on the subject . Petitioner appears to be arguing that there was a multiple support agreement with respect to the , children .

Section 152(c) provides for multiple support agreements~anl d requires that no one person contribute over one-half of a n individual's support and .. that over one-half of the support be , received from persons each of whom, but for-the fact that he d i el not contribute :over ne-half of such support, would have'bee n entitled to claim th individual- as a dependent for a taxable year beginning in th t' calendar year . In addition, petitione r would have to prove hat he contributed over 10 percent of th e total support and ea h'contributor of over 10 percent" consente d in writing to a mul t pie support agreement .

B e' cause petitio er .is unable to demonstrate that no one person contributed . o er half of the support for 2003, he is not entitled to claim th dependency exemption deduction . under that approach . We therefo ehold that petitioner is not entitled t o the claimed deducti o s, as determined by respondent .

Section 24(a) p ovides for a "credit against the tax for the taxable year with respect to . each qualifying child of the taxpayer" . The . ter m "qualifying child" means any individual i f three requirements a e met, one of which is that the taxpayer b allowed a deduction nder section 151 with respect to th e individual for the t xable year . Sec . 24(c)(1) . Because we hav e concluded that petit oner is not entitled to dependency exemption deductions for his daughters, they are not, qualifying children . We therefore hold that petitioner is not entitled t o child tax credits .

Section 1(b) imposes a special income tax rate .on a taxpayer filing as a head of household . To qualify as a head],of household the taxpayer must, inter alia, maintain as his or her home a household that is the principal place of abode for more than one- half of the . year of an unmarried child of the taxpayer . Sec .

2(b)(1)(A) . . Because petitioner's daughters :did .not live with him for more than one-half of the year, we hold that he is no t entitled to head-of-household filing-status .

To reflect the foregoing, .

Decision will be,~entered fo r respondent .