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paternity for GP was established by order of the Hancock District
Court, Commonwealth of Kentucky, entered August 13, 2003.3
Petitioner was ordered to pay $65 per week in child support.
In 2002, AP and GP lived with Ms. Harpe in government
housing in Kentucky. Petitioner worked in Indiana that year and
earned $15,372.87 of wage income. Petitioner filed his 2002
Federal income tax return as a head of household and claimed a
dependency exemption deduction for each child. Petitioner also
claimed an earned income credit with AP and GP as the qualifying
children.
In March 2004, respondent issued a notice of deficiency
denying petitioner: (1) The dependency exemption deductions; (2)
head-of-household filing status; and (3) the earned income
credit. In computing the deficiency, respondent changed
petitioner’s filing status to single.
Discussion
In general, the Commissioner’s determination set forth in a
notice of deficiency is presumed correct. Rule 142(a)(1); Welch
v. Helvering, 290 U.S. 111, 115 (1933). In certain
circumstances, however, if the taxpayer introduces credible
evidence with respect to any factual issue relevant to
ascertaining the proper tax liability, section 7491 places the
3 The paternity of GP is not in question for the taxable
year 2002. Petitioner is the father.
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Last modified: May 25, 2011