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Phillips v. Commissioner, 86 T.C. 433, 441 n.7 (1986), affd. in
part and revd. in part on other issues 851 F.2d 1492 (D.C. Cir.
1988).
In view of the foregoing, we sustain respondent's
determination that petitioner's tax liability must be computed by
reference to the rates applicable to married individuals filing
separately and that petitioner is only entitled to a standard
deduction in the amount applicable to that filing status.
Issue (3): Claimed Dependency Exemption Deductions for
Petitioner's Children
Respondent does not contend that, as a matter of law,
petitioner is not entitled to claim her children as dependents.
Rather, respondent contends that petitioner failed to
demonstrate, during the examination stage of this case, "whether
or not these dependents were truly under her care and entitled to
dependent exemption."
The record demonstrates, and we have found as a fact, that
petitioner provided the sole support for herself and her family
in 1992. The record also demonstrates that Andre, Daphne, and
Melody resided with petitioner (and Mr. Mischel) in 1992, except
for that part of the year when Daphne or Melody may have been
away in college. Under these circumstances, and in view of Mr.
Mischel's lack of financial resources, we hold that petitioner is
entitled to dependency exemption deductions for her children.
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