- 3 - Petitioner’s 1996 Federal income tax return was prepared by H&R Block. The income reported on the return consists entirely of the wages petitioner earned. Petitioner claimed dependency exemption deductions for three siblings and her mother. The relationship of two of petitioner’s siblings is described as “fosterchild” on the return. Petitioner computed her 1996 taxable income and Federal income tax liability taking into account the standard deduction applicable to a head of household. She claimed an earned income credit computed by treating two of her siblings (the ones identified as her foster children) as qualifying children. In the notice of deficiency, respondent: (1) Disallowed the dependency exemption deductions for petitioner’s siblings and mother; (2) changed petitioner’s filing status from head of household to single and adjusted the standard deduction accordingly; and (3) disallowed the earned income credit. Discussion 1. Dependency Exemption Deductions Petitioner claimed dependency exemption deductions for three of her siblings and her mother on her 1996 return. Generally, a taxpayer is entitled to an exemption deduction for each dependent. Sec. 151(c).1 The term “dependent” includes a 1 Unless otherwise indicated, section references are to the Internal Revenue Code in effect for 1996.Page: Previous 1 2 3 4 5 6 Next
Last modified: May 25, 2011