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Petitioner worked for the Department of Defense and received
wages totaling $14,010 in 2003. On his 2003 Form 1040A, U.S.
Individual Income Tax Return, which was prepared by H&R Block,
petitioner listed RJM and CGM, his nieces, as dependents.
Petitioner filed his Federal tax return as head of household and
claimed a standard deduction in the amount of $7,000.3
Petitioner claimed three exemptions, one for himself and
dependency exemptions for RJM and CGM, totaling $9,150.
Petitioner also claimed an earned income credit in the amount of
$4,142, and a child tax credit in the amount of $351. According
to petitioner and H&R Block’s calculations, petitioner was
entitled to a $4,790 refund.
The notice of deficiency was sent to petitioner on August
30, 2004. In the notice of deficiency, respondent:
(1) Disallowed the dependency exemptions for petitioner’s nieces;
(2) changed petitioner’s filing status from head of household to
single and adjusted the standard deduction accordingly;
(3) disallowed the child tax credit; and (4) disallowed the
earned income credit. As a result, respondent determined a
deficiency of $5,116. Petitioner timely petitioned this Court,
and a trial was held on February 6, 2006, in El Paso, Texas.
3The standard deduction for single or married filing
separately for the taxable year 2003 was $4,750.
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