Huon Pen - Page 5

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               In the notice of deficiency, respondent disallowed                     
          petitioner’s dependency exemption deduction for L.H. on the                 
          ground that petitioner failed to establish that she provided more           
          than half the support for the child.                                        
               The record shows that all members of petitioner’s household,           
          including petitioner, deposited their earnings in one bank                  
          account.  All household expenses were paid out of that account.             
          In the audit of petitioner’s tax return, respondent determined              
          that, for the year at issue, petitioner’s earnings of $13,285 in            
          that account and the earnings of the other members of her                   
          household totaled $32,164.59.  Respondent further determined that           
          this account also included assistance payments from the State of            
          Washington during the year at issue for the benefit of L.H.                 
          These payments were identified at trial as “WIC” payments.                  
          Because this account represented the total income of petitioner             
          and members of her family, respondent determined that the greater           
          portion of the support provided to L.H. during the year came from           
          persons other than petitioner.  Thus, respondent determined that            
          petitioner was not entitled to the dependency exemption deduction           
          she claimed on her 2001 tax return.                                         
               The Court is satisfied from the record and from the evidence           
          at trial that petitioner did not provide more than one-half the             
          support of L.H. during the year at issue.  The general rule under           
          section 151 is that the dependency exemption deduction is                   

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