- 20 - includes as a member one or more qualifying individuals. The term “qualifying individual,” under section 21(b)(1), includes a dependent of the taxpayer under age 13, with respect to whom the taxpayer is entitled to a dependency deduction under section 151(c). The allowable credit, under section 21(b)(2), is based upon employment-related expenses that are incurred to enable the taxpayer to be gainfully employed, including expenses incurred for the care of a qualifying individual. Respondent does not dispute that petitioner’s daughter was a “qualifying individual” under section 21(b)(1), or that petitioner’s payments to Kuddle Korner, if actually paid, were employment related under section 21(b)(2). Respondent contends, however, that petitioner failed to substantiate payments made during 1995 for the care of Clara while petitioner and her husband were working. Petitioner claimed the expenses paid to Kuddle Korner and provided identifying information with respect to that service provider on her 1995 return pursuant to section 21(e)(9). Petitioner did not substantiate these child care expenses with written records but testified credibly about the expense. See sec. 1.44A-1(e), Income Tax Regs. (taxpayer must substantiate credit by adequate records or other sufficient evidence). The Court is satisfied from the record that petitioner did incur child care expenses with respect to a qualifying individual, her daughter, Clara. In the absence of adequate substantiation, thisPage: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Next
Last modified: May 25, 2011