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Respondent determined a $3,656 deficiency in petitioner’s 1997
Federal income tax; this determination is based on respondent’s
disallowance of petitioner’s claim for an earned income credit.
Thus, the ultimate issue we must decide is whether petitioner is
entitled to the claimed earned income credit, which in turn depends
upon whether the so-called tie-breaker rule under section
32(c)(1)(C) is applicable. In resolving this latter question, we
must decide whether the retroactive application of amended section
32(c)(3)(A) in 1998 is constitutional.
Background
The stipulation of facts and the attached exhibits are
incorporated herein. The stipulated facts are hereby found.
Petitioner resided in Saratoga, New York, at the time she filed
her petition.
During the entire year in issue (1997), petitioner was
unmarried and resided with: John Pancake, her boyfriend; Christina
and Mitchell Sutherland, her children from a prior marriage; and
Alyssa Pancake, the daughter of Mr. Pancake and petitioner. Each
child was under the age of 19.
Petitioner, Mr. Pancake, and the three children lived together
as a family unit. In fact, Mr. Pancake cared for Christina and
Mitchell as if they were his own children. Petitioner and Mr.
Pancake shared the costs of food and lodging for the entire
household.
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