Opinion
11917-20
11-16-2021
Constant B. Bidzimou, Petitioner v. Commissioner of Internal Revenue, Respondent
ORDER
Emin Toro Judge
Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it is hereby
ORDERED that the Clerk of the Court shall transmit to petitioner and to respondent a copy of the pages of the transcript of the trial in the above-referenced case before Judge Emin Toro in Houston, Texas (remote proceeding), containing the Court's Oral Findings of Fact and Opinion, rendered at the trial session at which this case was heard. In accordance with the Oral Findings of Fact and Opinion, a Decision will be entered for respondent.
In the Matter of: CONSTANT B. BIDZIMOU, Petitioner, v.
COMMISSIONER OF INTERNAL REVENUE, Respondent.
Date: October 15, 2021
(Remote Proceeding)
The above-entitled matter came on for bench opinion, pursuant to notice at 2:30 p.m.
APPEARANCES:
For the Petitioner: No Appearance
For the Respondent: No Appearance
BEFORE: HONORABLE EMIN TORO, Judge
PROCEEDINGS
THE CLERK: Calling docket number 11917-20, Constant B. Bidzimou.
(Whereupon, a bench opinion was rendered.)
THE COURT: The Court has decided to render the following as its oral findings of fact and opinion in this case. This bench opinion is made pursuant to the authority granted by section 7459(b) of the Internal Revenue Code of 198 6 and Rule 152 of the Tax Court Rules of Practice and Procedure, and it shall not be relied upon as precedent in any other case. Unless otherwise indicated, section references in this opinion are to the Internal Revenue Code of 1986, as amended and in effect at all relevant times (the "Code"), and rule references are to the Tax Court Rules of Practice and Procedure. We round all monetary amounts to the nearest dollar.
By a statutory notice of deficiency dated September 8, 2020, the Commissioner of Internal Revenue determined a deficiency in the Federal income tax of petitioner Constant B. Bidzimou in the amount of $5,521 for taxable year 2018.
Three issues are for decision before the Court: (1) whether Mr. Bidzimou is entitled to the child tax credit under section 24; (2) whether Mr. Bidzimou is entitled to the earned income tax credit under section 32; and (3) whether Mr. Bidzimou is entitled to use the head of household filing status as provided in section 2.
On the first issue, we conclude that Mr. Bidzimou is not entitled to the child tax credit because he did not have a qualifying child within the meaning of section 152(c), as required by section 24(c)(1), or a dependent, as required by section 24(h)(4)(A).
On the second issue, we conclude that Mr. Bidzimou is not entitled to the earned income tax credit because his adjusted gross income exceeded the statutory limitation established for claiming the credit.
On the third issue, we conclude that Mr. Bidzimou did not qualify as a head of a household within the meaning of section 2(b) and therefore was not entitled to use that status.
Findings of Fact
Some of the facts have been stipulated and are so found. In addition, the parties' stipulated exhibits are incorporated herein by reference. Trial of this case was conducted on October 13, 2021, during a remote special trial session. At the time he filed his petition, Mr. Bidzimou resided in Kansas.
A. Mr. Bidzimou's Family Circumstances and State Court Proceedings
Mr. Bidzimou has one child, BB, from a prior marriage to Amber Bidzimou.
BB was born in 2004 and was a minor during the 2018 taxable year. The decree formalizing Mr. and Ms. Bidzimou's divorce (the "Divorce Decree") was entered on August 15, 2013, by the 18th Judicial District, District Court of Sedgwick County, Kansas Family Law Department (the "Kansas District Court"). Accompanying the Divorce Decree was a Permanent Parenting Plan of the Parties (the "Parenting Plan"). The Parenting Plan granted Ms. Bidzimou sole legal custody of BB. Under the Parenting Plan, Mr. Bidzimou would have "parenting time" with BB Monday through Friday, from 4:00 p.m. to 8:45 p.m., and on Sunday from 9:45 a.m. to 6 p.m. BB would alternate spending certain holidays between his parents. Separately, in March 2014, the Kansas District Court ordered Mr. Bidzimou to pay child support and maintain health insurance for BB.
Mr. Bidzimou sought appellate review of the child support order, but not of the Parenting Plan. Because Mr. Bidzimou alleged procedural irregularities with the child support order, the Court of Appeals of Kansas ordered the Kansas District Court to conduct a new hearing. The hearing took place in July 2014 and resulted in a new order for the payment of child support. As relevant here, the Kansas District Court found that, as of the time of the hearing in 2014, (1) BB resided primarily with his mother, (2) as a result, Ms. Bidzimou was BB's "primary residential custodial parent," and (3) Mr. Bidzimou had the right to claim BB as a dependent for tax purposes. Mr. Bidzimou sought review of the new order as well. On May 8, 2015, the Court of Appeals of Kansas affirmed the Kansas District Court's decision. See State ex rel. Sec'y, Dept. for Children and Families v. Bidzimou, 347 P.3d 1214 (Table) (Kan.Ct.App. 2015), 2015 WL 2342875.
B. Living Arrangements for BB
During 2018, Mr. Bidzimou maintained an apartment where he lived and where BB also spent time. BB spent some nights with his mother and some nights with Mr. Bidzimou. Mr. Bidzimou maintained health and dental insurance for BB and incurred various expenses for BB's benefit. Certain notices regarding BB's performance at school and his doctor's visits were sent to Mr. Bidzimou's address. But Mr. Bidzimou did not maintain any documentation in the form of a log, calendar, or journal to show the number of days or nights that BB spent in Mr. Bidzimou's apartment during 2018.
C. Mr. Bidzimou's Tax Return and Internal Revenue Service Examination
Mr. Bidzimou, a cash basis taxpayer, timely filed his Form 1040, U.S. Individual Income Tax Return, for the taxable year 2018. On that return, relying on the order of the Kansas District Court, Mr. Bidzimou claimed BB as a dependent. The return showed Mr. Bidzimou's filing status as "head of household" and reported adjusted gross income in the amount of $18,788.
Mr. Bidzimou claimed a standard deduction of $18,000, which was the standard deduction allowable to individual taxpayers filing under the "head of household" status for that year. Additionally, Mr. Bidzimou claimed a child tax credit of $1,400 and an earned income tax credit of $3,443. Mr. Bidzimou did not attach to his 2018 return, or otherwise submit, Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent, or a declaration signed by Ms. Bidzimou stating that she would not claim BB as a dependent on her own 2018 return. Ms. Bidzimou claimed BB as a dependent on her return for 2018.
The IRS examined Mr. Bidzimou's return, and eventually the Commissioner issued a notice of deficiency disallowing Mr. Bidzimou's child tax credit and earned income tax credit and recalculating his tax liability using the tax filing status of "single." The adjustments resulted in a deficiency of $5,521.
Mr. Bidzimou timely petitioned this Court for redetermination.
OPINION
I. Burden of Proof
Generally, the Commissioner's determinations in a notice of deficiency are presumed correct, and the taxpayer bears the burden of proving error in the determinations. See Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933).
Additionally, the taxpayer bears the burden of proving entitlement to any deduction or credit claimed on a return. See INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992); New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934).
In certain circumstances, under section 7491(a), the burden of proof as to factual matters shifts to the Commissioner. Mr. Bidzimou does not argue, and the record does not support, that section 7491(a) applies here, so the burden of proof remains with him.
II. BB's Status as a Qualifying Child or a Qualifying Relative
The three distinct issues before the Court are interrelated and hinge on BB's status as either a "qualifying child" under section 152(c) or a "qualifying relative" under section 152(d). So, we turn next to considering the requirements of each provision.
A. Qualifying Child Under Section 152(c)
As relevant here, Section 152(c)(1) sets out five requirements for an individual to be considered a "qualifying child" of a taxpayer. Generally, the individual must (1) bear a specified relationship to the taxpayer (for example, be a child of the taxpayer), (2) have the same principal place of abode as the taxpayer for more than one-half of the taxable year, (3) meet certain age requirements (here, be less than 19 years old), (4) not have provided over one-half of his own support for the year at issue, and (5) not have filed a joint return with a spouse for that year. See section 152(c)(1)(A) to (E), (2); Shenk v. Commissioner, 140 T.C. 200, 204-205 (2013).
BB is Mr. Bidzimou's child, met the age requirement (in 2018, he was not yet 19 years old), did not provide over one-half of his support for the year, and did not file a joint return. That leaves the second requirement (relating to the individual's principal residence) as the only factor at issue.
In determining whether a child has the same principal place of abode as his parent for more than one-half of the taxable year, our caselaw has counted a child's nights spent with a parent. See Bidzimou v. Commissioner, T.C. Memo. 2020-85, at *11; Skitzki v. Commissioner, T.C. Memo. 2019-106, at *9; see also section 152(c)(1)(B); Treasury Regulation section 1.152-4(d)(1) (in a related context, defining "custodial parent" as the "parent with whom the child resides for the greater number of nights during the calendar year"). (Proposed regulations also would provide that the determination of whether a child has the same principal place of abode as the taxpayer for purposes of section 152(c)(1)(B) is based on the number of nights during the year that the child stays overnight in the taxpayer's dwelling or otherwise in the company of the taxpayer. See Proposed Treasury Regulations section 1.152-4(c)(1), (3), 82 Fed. Reg. 6386 (Jan. 19, 2017).)
Mr. Bidzimou bears the burden of proving that BB meets the second requirement and satisfies the definition of "qualifying child." In light of the evidence presented at trial, the Court is not persuaded that he has carried that burden.
At trial, Mr. Bidzimou initially testified that he did not track the number of nights BB spent with him. He later testified that BB sometimes stayed with him for "weeks" or "months" at a time during 2018. Ultimately, while cross-examining Ms. Bidzimou, Mr. Bidzimou asserted that BB was with him for most of 2018. Mr. Bidzimou's testimony was vague and inconsistent. It also was disputed by Ms. Bidzimou, who testified that BB largely spent weekends-but not every weekend-with Mr. Bidzimou during 2 018.
Mr. Bidzimou produced no logs, calendars, or diaries in support of his testimony and acknowledged that he could not say with certainty how many nights BB stayed with him. He did produce certain medical bills, insurance notices, and school letters that pertained to BB and were addressed to Mr. Bidzimou's residence, but these materials do not establish how often BB stayed with Mr. Bidzimou rather than his mother. When asked directly by the Court how many nights BB typically stayed at his apartment, whether during the year or during a given week or month, Mr. Bidzimou would not give a number. Instead, he testified that he gave BB "freedom" to decide where BB wanted to stay.
In the Court's view, Mr. Bidzimou's self-serving, disputed, and generally unsupported testimony is insufficient to carry his burden. See Tokarski v. Commissioner, 87 T.C. 74, 77 (1986) (finding that the Court is not reguired to accept uncorroborated or self-serving testimony as reliable and true). Accordingly, we conclude that Mr. Bidzimou failed to show that BB had the same principal place of abode as he did for more than one-half of 2018. We therefore conclude that BB was not Mr. Bidzimou's gualifying child within the meaning of section 152(c) for the taxable year 2018.
We note that section 152(e) provides an exception to the general definition of "qualifying child" that in some circumstances applies with respect to divorced or legally separated parents. See Shenk v. Commissioner, 140 T.C. at 205. In relevant part, the statute states that a child of divorced or legally separated parents may be treated as the qualifying child of the noncustodial parent-i.e., the parent with whom the child does not live most of the time-if, among other conditions, the custodial parent signs a written declaration that the custodial parent will not claim the child as a dependent, and the noncustodial parent attaches the declaration to his return. See section 152(e) (1), (2), (4); see also section 1.152-4(d)(1), Income Tax Regs. This exception is unavailable here, because Ms. Bidzimou did not sign a statement or Form 8332 and, accordingly, no statement or Form 8332 was attached to Mr. Bidzimou's 2018 return.
In short, BB is not Mr. Bidzimou's "qualifying child" under section 152.
B. Qualifying Relative Under Section 152(c)
Although a child may not be a "qualified child" of the taxpayer as section 152 (c) defines that term, a taxpayer may be entitled to certain income tax benefits if the child meets the requirements for being treated as a "qualifying relative" under section 152(d).
For an individual to be a qualifying relative, among other requirements, the individual must not be the qualifying child of the taxpayer or of any other taxpayer. See section 152(d)(1)(D). Here, we have already concluded that BB is not Mr. Bidzimou's qualifying child. But Mr. Bidzimou has failed to prove that BB is not the qualifying child of Ms. Bidzimou. Put another way, Ms. Bidzimou claimed BB as her qualifying child for 2018 and, under section 152(d)(1)(D), Mr. Bidzimou bore the burden of proving that Ms. Bidzimou was wrong. This he has failed to do.
Thus, we are unable to conclude that BB is a qualifying relative of Mr. Bidzimou.
With these determinations regarding BB's status out of the way, we turn next to considering whether Mr. Bidzimou is entitled to the child tax credit, the earned income tax credit, and a head of household filing status.
III. Child Tax Credit
Generally, a taxpayer is entitled a child tax credit for an individual who is his "qualifying child" as defined in section 152(c) and is younger than 17. Section 24(a), (c), (h); Shenk v. Commissioner, 140 T.C. at 209. In addition, for a taxable year beginning after December 31, 2017, and before January 1, 2026, a taxpayer generally is also entitled to a smaller child tax credit "for each dependent of the taxpayer (as defined in section 152) other than a qualifying child [who is less than 17]." Section 24(h)(4)(A). Under section 152(a), for purposes of the income tax provisions of the Code, the term "dependent" means a "qualifying child" or a "qualifying relative," terms that we described in detail above.
For the reasons noted above, see supra Part II, for the taxable year 2018, BB is neither a qualifying child nor a qualifying relative of Mr. Bidzimou. Therefore, Mr. Bidzimou is not entitled to a child tax credit for that year.
IV. Earned Income Tax Credit
Generally, section 32(a)(1) allows an eligible individual an earned income tax credit to offset the individual's tax liability, subject to the limitations provided in section 32(a)(2). The limitation amount in section 32 generally is based on the taxpayer's earned income, the taxpayer's adjusted gross income, and whether the taxpayer has any qualifying children. Section 32(b), (c). In broad terms, the taxpayer has a greater opportunity to earn income without losing the earned income tax credit if the taxpayer has a "qualifying child." See section 32(b), (c)(3); Rev. Proc. 2017-58, sec. 3.05(1). For these purposes, a "qualifying child" means a qualifying child as defined in section 152(c), but (as relevant here) determined without regard to section 152(e). As discussed above, see supra Part II, BB is not a qualifying child of Mr. Bidzimou for the taxable year 2018. In 2018, single or head of household filers who had no qualifying children were not entitled to an earned income tax credit if their adjusted gross income (or, if greater, their earned income) was $15,310. Rev. Proc. 2017-58, sec. 3.05(1).
Mr. Bidzimou reported adjusted gross income of $18,788 on his 2018 tax return. Mr. Bidzimou has not introduced any evidence or testimony to show that his adjusted gross income was less than what was reported on his return. Because Mr. Bidzimou's adjusted gross income was more than $15,310, he is not entitled to an earned income tax credit for 2018.
V. Head of Household
Section 1(b) provides a special tax rate for an individual who qualifies as a head of household. Under Section 2(b), as relevant here, an individual is "considered a head of a household if, and only if," that individual is unmarried as of the close of the taxable year, is not a surviving spouse, and, with exceptions not relevant here, maintains as his home a household which constitutes for more than one-half of [the] taxable year the principal place of abode ... of
(i) a qualifying child of the individual (as defined in section 152 (c), determined without regard to section 152 (e)) ... or
(ii) any other person who is a dependent of the taxpayer, if the taxpayer is entitled to a deduction for the taxable year for such person under section 151.See also Shenk v. Commissioner, 140 T.C. at 210; Rowe v. Commissioner, 128 T.C. 13, 16-17 (2007) .
As already explained, see supra Part II, for the taxable year 2018, BB is not a qualifying child of Mr. Bidzimou. As also explained, BB is not a qualifying relative of Mr. Bidzimou. Thus, BB is not a "dependent" of Mr. Bidzimou under section 152, and Mr. Bidzimou would not be "entitled to a deduction for the taxable year for [BB] under section 151." See section 151(a), (c), (d)(5)(A) and (B); section 152(a)(1), (2). Accordingly, Mr. Bidzimou does not qualify for head of household filing status for taxable year 2018.
VI. Other Arguments
Mr. Bidzimou maintains that he is entitled to the child tax credit, earned income tax credit, and head of household filing status because the Divorce Decree was invalid and because the Kansas District Court ordered that he was entitled to claim BB as a dependent for tax purposes.
Mr. Bidzimou argues that the Divorce Decree is invalid because the document lacks the name of the judge who signed the decree. Based on our review of the record, the Court finds that this argument lacks legal and factual merit. As is clear from the face of the document, the Divorce Decree was signed by Judge David Dahl, a judge of the Kansas District Court. In any event, Mr. Bidzimou has not explained why the purported invalidity of the Divorce Decree would affect the outcome of this case. See, e.g., section 2(b)(1) (stating that head of household status is unavailable to married individuals); section 32(d)(1) (providing that the earned income tax credit is available to married individuals only if they file a joint return); section 152(c) (4) (B) (stating that if the parents of any qualifying child do not file a joint return together, the child is treated as the qualifying child of the parent with whom the child resided for the longest period of time during the taxable year); see also section 7703(b) (providing that a married individual living apart from his spouse may be treated as unmarried in certain circumstances, but only if his home constitutes the principal abode of a child for more than one-half of the year, among other requirements).
With respect to Mr. Bidzimou's second argument, we are sympathetic to the assertion that the Kansas District Court gave Mr. Bidzimou the right, as between him and Ms. Bidzimou, to claim BB as a dependent for tax purposes. But as this Court has held in similar circumstances, the provisions of the Code, not State court orders, determine one's eligibility for Federal tax benefits for the year at issue. See Shenk v. Commissioner, 140 T.C. at 206; see also Bidzimou v. Commissioner, at *16-*17. In this case, the requirements of sections 2, 24, 32, and 152 govern whether Mr. Bidzimou is entitled to the child tax credit, earned income tax credit, and head of household filing status. And as we have discussed, Mr. Bidzimou has not satisfied his burden of proof in showing that he meets these requirements. To the extent Mr. Bidzimou objects to Ms. Bidzimou's alleged failure to comply with the order of the Kansas District Court, he should seek his remedy, if any, from that court, as the power to grant relief does not lie within the jurisdiction of this Court.
Conclusion
BB is not Mr. Bidzimou's qualifying child within the meaning of section 152(c) or his dependent as required by section 24(h)(4)(A) for taxable year 2018. Therefore, Mr. Bidzimou is not entitled to a child tax credit for that year.
Additionally, because Mr. Bidzimou does not have a qualifying child, for purposes of the earned income tax credit, his adjusted gross income exceeds the full phaseout amount for either single or head of household filers for 2018. Therefore, Mr. Bidzimou is not entitled to an earned income tax credit for that year. Finally, Mr. Bidzimou does not qualify for head of household filing status because BB is not his qualifying child or qualifying relative.
The Court has considered all the other arguments of the parties, and to the extent not discussed above, finds those arguments to be irrelevant, moot, or without merit.
To reflect the foregoing, decision will be entered for respondent.
This concludes the Court's oral Findings of Fact and Opinion in this case.
(Whereupon, at 3:00 p.m., the above-entitled matter was concluded.)
CERTIFICATE OF TRANSCRIBER AND PROOFREADER
CASE NAME: Constant B. Bidzimou v. Commissioner DOCKET NO.: 11917-20
We, the undersigned, do hereby certify that the foregoing pages, numbers 1 through 20 inclusive, are the true, accurate and complete transcript prepared from the verbal recording made by electronic recording by Adrian Morris on October 15, 2021 before the United States Tax Court at its remote session in Houston, TX, in accordance with the applicable provisions of the current verbatim reporting contract of the Court and have verified the accuracy of the transcript by comparing the typewritten transcript against the verbal recording.
Transcriber: Meribeth Ashley, CET-507
Date 11/2/21
Proofreader: Lori Rahtes, CDLT-108
Date 11/2/21