- 6 -
Respondent contends that petitioner’s children also qualify
as Mr. Allen’s foster children, and, therefore, petitioner does
not qualify for the earned income credit, as her modified
adjusted gross income for 1996 was lower than Mr. Allen’s. See
sec. 32(c)(1)(C). However, Mr. Allen fails the relationship test
with respect to petitioner’s children. An eligible foster child
is defined as an individual who the taxpayer cares for as the
taxpayer’s own child, and has the same principal place of abode
as the taxpayer for the taxpayer’s entire taxable year. Sec.
32(c)(3)(B)(iii).3 The record reflects that Mr. Allen did not
care for petitioner’s children as his own. Mr. Allen’s
involvement with petitioner’s children was limited to the
purchase of groceries. Petitioner’s children do not qualify as
Mr. Allen’s foster children. As such, petitioner is not
disqualified as an “eligible individual”.
We hold that petitioner is entitled to the earned income
credit for 1996.
Reviewed and adopted as the report of the Small Tax Case
Division.
3 Although Congress recently amended the definition of an
eligible foster child, see Ticket to Work and Work Incentives
Improvement Act of 1999, Pub. L. 106-170, sec. 412, 113 Stat.
1917, the amended definition does not apply herein because it is
effective for tax years beginning after Dec. 31, 1999.
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