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apartments with separate entrances. The apartment at 4219 Zamora
Street has one bedroom, and the apartment at 4221 Zamora Street
has two. Erica, Tanya, and Ivan had keys to both apartments and
ate meals sometimes in one or the other apartment.
Petitioner filed a timely Federal income tax return for the
2001 taxable year. The return reflected an address of “4221
Zamora Street” and reported total income of $11,000. Petitioner
filed as a “head of household” and claimed dependency exemption
deductions for Erica and Ivan, but not Tanya. Petitioner also
claimed an additional child tax credit of $22 and an earned
income credit of $4,008 with Erica and Ivan as qualifying
children.
Respondent issued petitioner a notice of deficiency dated
November 15, 2002.1
Discussion
Section 7491(a) provides that in a court proceeding, the
burden of proof with respect to any factual issue shifts to the
1 The notice of deficiency included a rate adjustment
credit of $138.65, which petitioner had not claimed in his 2001
tax return. The Economic Growth and Tax Relief Reconciliation
Act of 2001, Pub. L. 107-16, sec. 101(a), 115 Stat. 38, 41-42,
created a new regular income tax bracket of 10 percent for
taxable years beginning after Dec. 31, 2000. See sec. 1(i).
Congress decided to implement the 10-percent rate bracket for
2001 via a rate reduction credit for that taxable year. See
secs. 1(i)(1)(D), 6428; H. Conf. Rept. 107-84, at 5-6 (2001).
The maximum amount of the rate reduction credit depends upon a
taxpayer’s filing status for 2001, and thus it is computational.
See sec. 1(i)(1)(B).
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Last modified: May 25, 2011