Jason George DeMar v. Commissioner

T.C. Memo. 2019-91
UNITED STATES TAX COURT
JASON GEORGE DEMAR, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 23461-17. Filed July 18, 2019.
Jason George DeMar, pro se.
Samuel M. Warren and Robert D. Heitmeyer, for respondent.
MEMORANDUM OPINION
BUCH, Judge: The parties submitted this case fully stipulated under Rule
122.1 The issues remaining for consideration all turn on a single question:
1
Unless otherwise indicated, all Rule references are to the Tax Court Rules
of Practice and Procedure, and all section references are to the Internal Revenue
Code (Code) in effect for the year in issue.
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[*2] whether Mr. DeMar may claim his son TD2 as a dependent for 2015. Because
Mr. DeMar did not attach Form 8332, Release/Revocation of Release of Claim to
Exemption for Child by Custodial Parent, or a similar written declaration to his
original 2015 Federal income tax return, he may not claim his son as a dependent
for 2015.
Background
Mr. DeMar is divorced and has one son, TD, with his ex-wife, Amanda
Renee DeMar. TD was born in 2008. In 2010 Mr. and Ms. DeMar agreed to
custody and child support terms in a consent judgment of divorce. In the judgment
they established TD’s primary residence with Ms. DeMar. They also agreed that
Mr. DeMar was entitled to claim TD as a dependent for even-numbered years. For
odd-numbered years Mr. DeMar was entitled to claim TD only if he stayed current
with his child support obligations and Ms. DeMar’s annual gross income was less
than $15,000. If these conditions were met, Ms. DeMar agreed to execute Form
8332 or a similar written declaration.
Mr. DeMar timely filed Form 1040A, U.S. Individual Income Tax Return,
for 2015 listing his earned income and adjusted gross income as $32,696 each. He
also claimed TD as a dependent on that return, elected head of household status,
2
The Court refers to minors by their initials. See Rule 27(a)(3).
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[*3] and claimed a dependency exemption deduction, the child tax credit, and the
earned income tax credit. He claimed head of household filing status on the basis
of having claimed a dependent. Mr. DeMar did not include Form 8332 or a
similar written declaration with his 2015 return. His ex-wife claimed TD on her
2015 return and failed to timely execute Form 8332 or a similar written
declaration.
On August 18, 2017, the Commissioner issued Mr. DeMar a notice of
deficiency for his 2015 return. In the notice the Commissioner determined that
TD was not Mr. Demar’s dependent; disallowed the dependency exemption
deduction, child tax credit, and earned income tax credit; adjusted his filing status
from head of household to single; and adjusted the standard deduction
accordingly.3 After Mr. DeMar received the notice of deficiency, Ms. DeMar
executed Form 8332 for 2015. While residing in Michigan, Mr. DeMar timely
filed a petition challenging the Commissioner’s determinations.
The parties jointly moved under Rule 122 to submit this case fully
stipulated. The parties agreed that the case may be submitted on the basis of the
3
The Commissioner also increased Mr. DeMar’s income by $3,747 for
cancellation of indebtedness. Mr. DeMar agreed to that adjustment.
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[*4] pleadings and the facts recited in their stipulation of facts. Mr. DeMar did not
file a brief.
Discussion
The Commissioner’s determinations in a notice of deficiency are generally
presumed correct, and the taxpayer bears the burden of proving an error. Rule
142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). The submission of this
case under Rule 122 does not alter the burden of proof. See Rule 122(b).
In this case the standard deduction, dependency exemption deduction, child
tax credit, earned income tax credit, and head of household filing status are all
affected by whether TD qualified as Mr. DeMar’s dependent for 2015. See secs.
63(c)(2), 151(a), (c), 24(a), 32(c)(1)(A), (3), 2(b)(1).
Mr. DeMar was not entitled to claim TD as a dependent for 2015 because he
did not satisfy the requirements established under section 152. For a noncustodial
parent to claim a qualifying child as a dependent under section 152, (1) the
custodial parent must sign a written declaration stating that he or she will not
claim the child as a dependent and (2) the noncustodial parent must attach that
declaration to his or her return. Sec. 152(e)(2). The necessary written declaration
is commonly made on Form 8332. The parties do not dispute that Ms. DeMar was
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[*5] the custodial parent and Mr. DeMar was the noncustodial parent.4 Mr. DeMar
did not receive Form 8332 or a similar written declaration from Ms. DeMar that
she was releasing her rights to claim TD until 2017, after Mr. DeMar had already
filed his 2015 return. Mr. DeMar argues he was entitled to claim TD as a
dependent for 2015 because he and Ms. DeMar fulfilled the conditions in their
judgment of divorce. But Mr. DeMar did not attach Form 8332 or a similar
written declaration to his return, as explicitly required by the Code.
We need not reach the question of whether section 152(e)(2)(B) leaves
room for a noncustodial parent to submit Form 8332 or a similar written
declaration at some point after filing his or her original return. The current
regulations do not explicitly allow (or prohibit) Form 8332 or a similar written
declaration to be submitted during examination or with an amended return. Sec.
1.152-4, Income Tax Regs. A proposed regulation explicitly permits a
noncustodial parent to submit Form 8332 or a similar written declaration during
examination or with an amended return. Sec. 1.152-5(e)(2)(i), Proposed Income
Tax Regs., 82 Fed. Reg. 6387 (Jan. 19, 2017). But that regulation requires that the
custodial parent either did not claim the dependency exemption or filed an
4
A custodial parent is “the parent having custody for the greater portion of
the calendar year.” Sec. 152(e)(4)(A).
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[*6] amended return removing the claim to the dependency exemption. Id. We
have no such facts in the record.
Conclusion
Because Mr. DeMar may not claim TD as his dependent for 2015, he is not
entitled to the dependency exemption deduction, the child tax credit, the earned
income tax credit, and head of household filing status for 2015. Being ineligible
for head of household filing status, Mr. DeMar should properly have filed as
single for 2015. It also follows that we must uphold the Commissioner’s
adjustments to Mr. DeMar’s standard deduction.
To reflect the foregoing,
Decision will be entered for
respondent.