Oscar Hughes, Jr. - Page 4




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               Petitioner listed his filing status as a head of household             
          on his Federal income tax return for each year in issue.  He did            
          not elect to itemize deductions for either year.  Relevant for              
          our purposes, on each return he claimed a dependency exemption              
          deduction for each of his children and an earned income credit.             
          Petitioner computed the earned income credit claimed on each                
          return by treating two of his children as “qualifying” children.            
               Delores Hamilton did not file a Federal income tax return              
          for any year in issue.  For each year she signed a Form 8332,               
          Release of Claim to Exemption for Child of Divorced or Separated            
          Parents.                                                                    
               In the notice of deficiency for each year, respondent                  
          changed petitioner’s filing status from head of household to                
          single and reduced the standard deduction accordingly.                      
          Respondent also disallowed all of the claimed dependency                    
          exemption deductions and the earned income credit.  No                      
          explanations for the adjustments were included in the notices of            
          deficiency.                                                                 
                                       OPINION                                        
          I. Dependency Exemption Deductions                                          
               Generally, section 151(c) allows a taxpayer a dependency               
          exemption deduction for each dependent as defined in section 152.           
          The term "dependent" includes certain individuals, such as a son            
          or daughter, "over half of whose support, for the calendar year             






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