Mr. Cooper supported somebody else’s child. He got a dependency exemption, but the tax law draws the line at tax credits for him. The Tax Court spelled out the five requirements that had to be met to qualify for the the child credit and earned income tax credit; Mr. Cooper stumbled on the first one:
However, the parties also stipulated that T.P. is not Mr. Cooper’s biological child or descendant. If Mr. Cooper had adopted T.P., then T.P. would have been considered Mr. Cooper’s child and the specified relationship would exist. However, there is no evidence that Mr. Cooper had adopted T.P. as of the close of 2010, nor is there any evidence that T.P. met any other part of the relationship test.
As a result, not all five of the requirements are fulfilled, and T.P. was not a qualifying child under section 152(c).
But the Tax Court did have some consolation:
Mr. Cooper should be commended for supporting T.P.; however, the tax law as written does not allow him the credits he claimed.
I’m sure Mr. Cooper appreciated the commendation, but I suspect he’d have appreciated the tax credits more.
Cite: Cooper, Summ. Op. 2013-59.