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2000 Federal income tax. The issues are whether petitioner is
entitled to (1) dependency exemption deductions for his minor
niece and nephew (the children), (2) an earned income credit
(EIC) for the children, and (3) head of household filing status.
Petitioner resided in Thomson, Georgia, at the time the petition
was filed.
The facts may be summarized as follows. During the taxable
year 2000, petitioner resided in a house owned by his parents.
The house was owned free and clear of any mortgage. It was
occupied by his parents, the children, a sister (not the mother
of the children), and petitioner. The local probate court
decreed that petitioner’s parents were the legal guardians for
the children. According to petitioner, his parents, his sister,
and he had separate apartments, but all the utilities for gas,
electric, and water were billed as one unit. Petitioner did not
pay rent for the apartment he occupied, rather, he paid a portion
of the utility bills for the entire house.
Petitioner’s mother received welfare payments of
approximately $110 per month for each child. Petitioner’s father
received Social Security benefits of approximately $1,200 per
month or $14,400 per year. Petitioner did not know whether his
parents had any other income. The Social Security benefits were
greater than petitioner’s annual income. With regard to the
total support for the children, petitioner testified that he
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