In Uncategorized on 11/01/2019 at 12:41

Nevertheless, and notwithstanding anything to the contrary or at variance with anything hereinbefore or hereinafter set forth (as my already-on-their-way-to-a-two-cliché lunch colleagues would say), the sad tale of Richard Alan Saunders & Shelia Candy Saunders, Docket No. 13352-15S, filed 11/1/19 is told again, with a rewrite from Judge Wells.

“In our opinion, we found that petitioners were not entitled to claim Mr. Steed as a dependent because he did not meet the section 152(d) definition of a “qualifying relative”. Saunders v. Commissioner, T.C. Summary Opinion 2019-29 (slip op. at 9). While this conclusion is correct, on the Court’s own motion, we deem it necessary to make a technical correction to our reasoning to comply with the relevant statutory prerequisites. We found that because Mr. Steed’s SSI exceeded the section 151(d)(1)(B) exemption amount, he failed to meet the requirement of section 152(d)(1)(B). We also noted that it was unclear whether petitioners provided for more than one-half of Mr. Steed’s support, as required by section 152(d)(1)(C).

“SSI is not taken into account for purposes of the section 152(d)(1)(B) requirement; it is, however, taken into account for purposes of the section 152(d)(1)(C) requirement. Sec. 1.152-1, Income Tax Regs….. During [year at issue], Mr. Steed received $733 per month in SSI. Petitioners did not provide an estimate or evidence of the amount of total support Mr. Steed received per month. We do not know the fair market value of the lodging petitioners provided to Mr. Steed. We noted in our opinion that Mr. Steed’s share of the household expenses varies depending on whether it is calculated on a per room or a per person basis. We now consider that each member of the household received an equal part of petitioners’ contributions as part of his or her support. See id.slip 20. Using a per person basis and adding the $80 per month in transportation costs, we estimate that petitioners provided Mr. Steed with monthly support of $560. This amount is less than the $733 in SSI, and therefore less than half of Mr. Steed’s total support. Accordingly, Mr. Steed does not meet the definition of a “qualifying relative”. See sec. 152(d)(1)(C).” Order, at pp. 1-2. (Citation omitted).

Now it’s true that Rich and Sheila Candy used a paid preparer. But Judge Wells excused chops, because they reasonably relied, were unsophisticated, and acted in good faith. And the paid preparer got it wrong.

But even a Tax Court Senior Judge with 33 (count ‘em, 33) years on the Tax Court bench got mixed up in the labyrinth that is Section 152.

See my blogpost “If This Were a Political Blog,” 9/30/19.

Congress, please copy.


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