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and Ms. Schroeder. The agreement called for petitioner and Ms.
Schroeder to have joint legal custody of the children, with Ms.
Schroeder having primary, physical custody. Petitioner testified
that the children resided with Ms. Schroeder for more than half
of the 1999 taxable year. In addition, petitioner testified that
he and Ms. Schroeder collectively provided all the support for
the children during 1999, but he provided the majority of the
that support.
The agreement also contained a provision that petitioner was
“entitled to receive all exemptions, deductions and the like on
his [Federal] income tax returns with respect to all three
children.” In preparing his 1999 Federal income tax return,
petitioner claimed three dependency exemption deductions and the
child tax credit with respect to the children. Petitioner
claimed the deductions relying on the terms of the agreement.
However, petitioner did not attach to his 1999 tax return a
written declaration signed by Ms. Schroeder stating that she
would not claim the children as dependents during the 1999
taxable year.
In the statutory notice of deficiency, respondent disallowed
the dependency exemption deductions and the child tax credit on
grounds that petitioner had not established entitlement to
either.
We decide the deficiency issue in this case on the basis of
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