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grandchildren did not contribute toward their support.
Petitioner’s daughter, on behalf of herself and petitioner’s
grandchildren, received various forms of public assistance,
including subsidized housing, cash assistance, food stamps, and
medical benefits, the total of which cannot be determined from
the record.
Petitioner was employed by Hansteck Corporation during 1998.
Her wages that year totaled $17,280, which amount is the only
income reported on her timely filed 1998 Federal income tax
return. That return was prepared by a paid income tax return
preparer. The Federal income tax liability reported on
petitioner’s 1998 return takes into account: (1) Petitioner’s
filing status as a head of household and the appropriate standard
deduction; (2) dependency exemption deductions for her
grandchildren; (3) child tax credits for her grandchildren; and
(4) an earned income credit computed by treating her
grandchildren as qualifying children.
In the notice of deficiency respondent changed petitioner’s
filing status from head of household to single and adjusted the
standard deduction accordingly. Respondent also disallowed the
dependency exemption deductions and child tax credits claimed for
petitioner’s grandchildren. The adjustment made in the notice of
deficiency pertaining to the earned income credit is not in
dispute.
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