Ella M. Royster - Page 4

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          order granting primary physical custody of the two children to              
          Mr. Royster and liberal visitation to petitioner.1  Petitioner              
          and Mr. Royster were divorced on March 30, 2002.  The divorce               
          decree ordered petitioner to pay Mr. Royster $278.48 per month              
          for child support.                                                          
               Petitioner timely filed Forms 1040, U.S. Individual Income             
          Tax Return, for taxable years 2001 and 2002.  On her 2001 and               
          2002 returns, petitioner filed as a head of household and claimed           
          two dependency exemptions for her two minor children, the earned            
          income credit, and the additional child tax credit.  On her 2002            
          return, petitioner also claimed the child tax credit.  Petitioner           
          did not attach to either return a Form 8332, Release of Claim to            
          Exemption for Child of Divorced or Separated  Parents, or other             
          written declaration by Mr. Royster.                                         
               Respondent determined that petitioner was not eligible for             
          head of household filing status because her children did not live           
          with her for over half of each taxable year in issue, and that              
          she was not eligible for any of the other claimed exemptions and            
          credits.  Accordingly, respondent determined a $4,8982 deficiency           



               1According to the May 29, 1998, order, liberal visitation              
          includes every other weekend and every other holiday.                       
               2The Form 4549, Income Tax Examination Changes, attached to            
          the notice of deficiency for taxable year 2001 shows that                   
          respondent applied a $4,489 overpayment from a subsequent tax               
          year against petitioner’s 2001 deficiency.                                  





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