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individual Federal income tax returns; (2) both petitioner and
Mr. Sherbo claimed earned income credit with respect to Sean on
their 1996 individual Federal income tax returns; (3) petitioner
and Mr. Sherbo are the biological parents of Liane and Sean; (4)
petitioner, Mr. Sherbo, Liane, and Sean appeared to share the
same household for the 1995 and 1996 tax years; and (5) Mr.
Sherbo's modified adjusted gross income was higher than
petitioner's modified adjusted gross income in tax years 1995 and
1996. We now assess whether respondent reasonably relied on
these facts in forming and maintaining his litigation position.
To be eligible to claim earned income credit with respect to
a qualifying child, a taxpayer must establish that the child
bears the relationship to the taxpayer prescribed by section
32(c)(3)(B) and that the child shares the same principal place of
abode as the taxpayer for more than one-half of the taxable year
as prescribed by section 32(c)(3)(A)(ii). Section 32(c)(1)(C)
provides further that if two or more individuals would otherwise
be eligible for earned income credit with respect to the same
qualifying child for the same taxable year, only the individual
with the highest adjusted gross income for the taxable year will
be eligible to claim the qualifying child.
As biological parents of Liane and Sean, both petitioner and
Mr. Sherbo meet the relationship test of section 32(c)(3)(B).
Petitioner and Mr. Sherbo's individual Federal income tax returns
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Last modified: May 25, 2011