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year.6 Respondent did not challenge petitioner’s classification
of his niece as a qualifying individual under section 21(b)(1),
or whether petitioner’s payments for child care, if actually
paid, were employment-related under section 21(b)(2). Respondent
disallowed petitioner’s claim solely for failure to substantiate.
Petitioner claimed the expenses were paid to the service
provider “Prestigious” and attached the required Form 2441, Child
and Dependent Care Expenses, providing identifying information
with respect to it on his 2000 tax return pursuant to section
21(e)(9). In addition, petitioner testified credibly about the
expense. Section 1.44A-1(e), Income Tax Regs., allows the
taxpayer to substantiate the child tax credit with “other
sufficient evidence”. In the absence of adequate written
substantiation, this Court may, if convinced by the evidence,
estimate the amount of deductible expenses incurred. Cohan v.
Commissioner, 39 F.2d. 540 (2d Cir. 1930). The Court is
satisfied from the record that petitioner did incur child care
expenses with respect to his niece, Tymiesha, that enabled him to
pursue gainful employment. On this record, the Court holds that
petitioner is entitled to the child care credit of $480 on his
2000 income tax return under section 21.
6 Sec. 21(e) also requires that the taxpayer file either
a joint return, if married, or as a head of household to qualify
for the credit. The Court has found that petitioner qualified
for head of household status in year 2000; therefore, further
discussion as to this requirement is unnecessary.
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Last modified: May 25, 2011