Rutha M. Corley - Page 7




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               In separate notices, respondent determined deficiencies in             
          petitioner’s income taxes based on the following adjustments for            
          each of the years in issue: (1) Respondent changed petitioner’s             
          filing status from head-of-household to single; (2) respondent              
          disallowed the dependency exemptions claimed by petitioner; and             
          (3) respondent disallowed the earned income credit claimed by               
          petitioner.                                                                 
          Discussion                                                                  
               Before deciding the substantive issues before us, we think             
          that a preliminary comment is in order.                                     
               At trial, petitioner testified in her own behalf.                      
          Respondent’s counsel cross-examined petitioner and also called              
          two third-party witnesses.  We found petitioner to be a credible            
          witness, and we have relied heavily on her testimony in making              
          our findings.                                                               
               We turn now to the substantive issues before us.                       
               A. Filing Status                                                       
               As relevant herein, an individual qualifies as a head of a             
          household if such individual is not married at the close of her             
          taxable year3 and maintains as her home a household that                    
          constitutes for more than one-half of such taxable year the                 


               3 Respondent, by determining petitioner’s filing status to             
          be single for each of the years in issue, has implicitly conceded           
          that petitioner was not married at the close of any of those                
          years.  See sec. 1(c); see also secs. 2(c); 7703(b).                        





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