Penny J. Sutherland - Page 6




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               For 1997, petitioner’s modified adjusted gross income was less         
          than that of Mr. Pancake.  If we apply the section 32(c)(1)(C) tie-         
          breaker rule, Mr. Pancake, and not petitioner, is the individual            
          eligible to claim the earned income credit with respect to Christina        
          and Mitchell.  See, e.g., Jackson v. Commissioner, T.C. Memo. 1996-         
          54.                                                                         
              Petitioner maintains that here the section 32(c)(1)(C) tie-             
         breaker rule is inapplicable on the basis that Mr. Pancake failed to         
         identify Christina and Mitchell as his qualifying children on his            
         1997 return.  In this regard, as explained infra, petitioner                 
         erroneously relies upon the definition of a qualifying child as it           
         existed before the 1998 amendment.                                           
              As originally enacted in 1990, section 32(c)(3)(A)2 defined a           


               2    Former sec. 32(c)(3)(A) provided as follows:                      
                    (A)  In general.–-The term “qualifying child”                     
               means, with respect to any taxpayer for any taxable                    
               year, an individual–-                                                  
                         (i)  who bears a relationship to the                         
                    taxpayer described in subparagraph (B),                           
                         (ii)  except as provided in subparagraph                     
                    (B)(iii), who has the same principal place of                     
                    abode as the taxpayer for more than one-half                      
                    of such taxable year,                                             
                         (iii) who meets the age requirements of                      
                    subparagraph (C), and                                             
                         (iv)  with respect to whom the taxpayer                      
                    meets the identification requirements of                          
                    subparagraph (D).  [Emphasis added.]                              





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