Terry U. Neal - Page 4




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          miscellaneous itemized deductions totaling $4,711, subject to the           
          2 percent of adjusted gross income limitation of section 67(a),             
          and Schedule C trade or business expenses of $8,799.  Petitioner            
          attached to his returns Internal Revenue Service (IRS) Forms                
          8332, Release of Claim to Exemption for Child of Divorced or                
          Separated Parents; however, these Forms 8332 were not signed by             
          Ms. Mosley.  Petitioner did not attach to the returns any                   
          statement executed by Ms. Mosley that would contain substantively           
          the same information called for on Form 8332.  The record                   
          contains no evidence as to whether Ms. Mosley claimed the three             
          children as dependents on her Federal income tax returns for the            
          years at issue.                                                             
               In the notice of deficiency, respondent disallowed the                 
          dependency exemptions claimed by petitioner for the three                   
          children for all years at issue.  Further, respondent disallowed            
          $876 of the Schedule A miscellaneous itemized deductions and                
          $2,069 of the Schedule C trade or business expenses claimed by              
          petitioner for 1994.                                                        
               The first issue is whether petitioner is entitled to                   
          dependency exemptions in 1994, 1995, and 1996 for his three                 
          children, Adam, Amanda, and Nathan.  Respondent disallowed the              
          dependency exemptions on the ground that petitioner had not                 
          established that he provided over one-half of the total support             
          of any of the children.  Respondent further contends that                   





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