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and the standard deduction applicable to a head of household. He
claimed an earned income credit computed by treating two of his
nephews as qualifying children.
In the notice of deficiency, respondent: (1) Disallowed the
dependency exemption deductions for petitioner’s nephews; (2)
changed petitioner’s filing status from head of household to
single and adjusted the standard deduction accordingly; (3)
disallowed the earned income credit claimed on petitioner’s 1997
return; and (4) imposed an addition to tax under section
6651(a)(1).
Discussion
1. Dependency Exemption Deductions
Petitioner claimed dependency exemption deductions for his
three nephews on his 1997 return. Generally, a taxpayer is
entitled to an exemption deduction for each dependent. Sec.
151(c). The term “dependent” includes a taxpayer’s nephews “over
half of whose support, for the calendar year * * * was received
from the taxpayer”. Sec. 152(a)(6). “The term ‘support’
includes food, shelter, clothing, medical and dental care,
education, and the like.” Sec. 1.152-1(a)(2)(i), Income Tax
Regs.
During 1997, petitioner’s nephews did not receive any
food, shelter, clothing, etc. from their parents. Instead,
substantially all of their support was received from petitioner,
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Last modified: May 25, 2011