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Petitioners are not entitled to a child care credit in
either of the years in issue. First, Balvinder was the main care
provider for the children, and Jagdish assisted her only during
the periods of time she was in the country. Second, petitioners
have not shown that they paid any child care expenses other than
the expenses incurred in connection with Jagdish. These are
clearly personal and family expenses and as such are not
deductible pursuant to section 262(a). Finally, the false
information provided on each of the returns for the years in
issue--with an identical amount of expenses in each year which
was just enough to provide petitioners with the maximum allowable
credit--persuades us that the alleged expenses had no connection
with any services provided by Jagdish.
The second issue for decision is whether petitioners are
entitled to a dependency exemption deduction for Heche in 1997.
Subject to limitations not applicable here, a deduction is
allowed under section 151(a) for each dependent of a taxpayer.
Sec. 151(a) and (c)(1). A taxpayer’s child is a dependent of the
taxpayer only if the taxpayer provides over half of the child’s
support for the taxable year. Sec. 152(a)(1).
Heche was in foster care throughout all of 1997 and,
although petitioners made payments for her support after that
year, they made no such payments in the year in issue. We
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Last modified: May 25, 2011