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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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Last modified: May 25, 2011