Father’s Proof of Extensive Involvement in Son’s Life Leads Tax Court to Award Child Tax Deductions to Him

A recent US Tax Court decision served as a reminder that, with a large enough volume of relevant evidence, any taxpayer can overcome an erroneous assessment of deficiencies and penalties imposed by the Internal Revenue Service. In the case, a father successfully challenged a disallowance of his claimed tax credits and exemptions related his son. Although an earlier agreement between the parents indicated that the child’s mother was to be his primary physical custodian, the evidence the father presented was sufficient to show that he held an instrumental role in the boy’s life during the tax years in question.

The credits and exemptions in question related to the son Rodney Harris and Alvanisha McFall had in 2001. Pursuant to an agreement between Harris and McFall, each parent shared joint custody of their son, but the boy was to reside with the mother most of the time. The order did not dictate which parent would receive the child tax exemption. By 2010, the father was shouldering much of the responsibility for transporting the child to and from various after-school football and basketball programs, where the child was a star athlete. During 2010 and 2011, McFall did not have a car or a driver’s license. In addition to the boy’s athletics, the father was also very active in facilitating the child’s religious activity during 2010 and 2011. The father and son attended church with Harris’s great aunt, where the boy was an usher and sang in the choir.

Harris claimed an exemption for a qualifying child, a credit for dependent care expenses, child tax credit and head of household filing status during each of 2010 and 2011. McFall also claimed the child on her taxes. The IRS rejected the father’s claims and imposed $8,100 in deficiencies and $2,500 in accuracy penalties. The father took his case to the Tax Court and succeeded. The court explained that only one parent may claim a child on his or her taxes. Unless an agreement to the contrary exists between the parents, the custodial parent has the right to claim the child. Under Section 152(c)(4)(B)(i) of the tax code, this meant the parent with whom the child resided a majority of the time during the tax years in question.

Although the 2003 agreement between the parents clearly showed that the mother was to be the primary custodial parent, the evidence offered to the Tax Court displayed something very different happened in 2010 and 2011. The proof showed that the father played “an instrumental role in [the son]’s life in the years at issue.” Additionally, the evidence showed that the boy stayed at the father’s home, or stayed with the father at the home of the father’s great aunt, more often than he stayed with his mother during 2010 and 2011. As a result, the proof demonstrated that the father had served as the primary custodial parent during 2010 and 2011 and was entitled to the tax credits, exemptions and deductions he claimed that related the boy.

In Harris’s case, he succeeded in spite of the existence of the 2003 agreement that seemed to show that his son’s mother was the boy’s primary custodian. Harris accomplished this because he successfully marshaled and presented a wealth of evidence demonstrating a reality that differed from the agreement the parents had previously reached. In fact-sensitive tax cases, understanding the amount and type of proof you need to win is essential. To ensure that you have the documentation you need to support your tax credits and exemptions, reach out to the knowledgeable tax attorneys at Samuel C. Berger, P.C. and CPAs at S.C. Berger, P.C. To consult our attorneys and CPAs, contact us online or call (201) 587-1500 or (212) 380-8117.

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