John S. Turay - Page 4




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          respondent for the years in issue, none of which are petitioner's           
          address.  Isatu received wages in the amounts of $1,749 and                 
          $2,871 in 1995 and 1996, respectively.                                      
               On his 1996 Federal income tax return, petitioner claimed              
          five dependency exemption deductions which included Isatu,                  
          Damonta, Briana, Randy Thompson (Randy), who is also a child of             
          Ms. Thompson, and his nephew, Mohamed Koroma (Mohamed).                     
          Petitioner reported all five claimed dependents as his children             
          who resided with him for all 12 months of the 1996 calendar year.           
          Petitioner claimed head-of-household filing status and a                    
          dependent care credit in the amount of $960.  Petitioner's                  
          nephew, Mohamed, left Africa in 1996 to reside with petitioner in           
          the United States.  Mohamed was employed in 1996.                           
               The notice of deficiency disallowed (1) the claimed                    
          dependency exemption deductions, (2) the head-of-household filing           
          status, and (3) the claimed dependent care credits.  Respondent             
          adjusted petitioner's filing status to single for both years in             
          issue.                                                                      
          Discussion                                                                  
               We begin by noting that, as a general rule, the                        
          Commissioner's determinations are presumed correct.  See Rule               
          142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933).  Deductions           
          are a matter of legislative grace, and the taxpayer bears the               






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