Gerard L. Schroeder - Page 4

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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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