Bridgett v. Commissioner

Memorandum Findings of Fact and Opinion

FAY, Judge: Respondent determined a deficiency in the income tax liability of pertitioner for the taxable year 1967 in the amount of $330.79. The issue involved is whether petitioner is entitled to dependency exemptions for his two children under section 151. ¹

Findings of Fact

Some of the facts have been stipulated; they are so found and incorporated herein by this reference.

Petitioner, Ronald C. G. Bridgett, filed a Federal income tax return for the taxable year 1967 with the district director of internal revenue, Hartford, Connecticut. At the time of filing his petition herein petitioner resided in Meriden, Connecticut.

Petitioner had been married to Norma J. Bridgett (hereinafter referred to as Norma) and they have two minor children, Ronald and Susan. During the taxable year 1966 petitioner and Norma were divorced. Their divorce decree awarded custody of the minor children to Norma and required petitioner to pay $15 per week in child support for each child and to maintain medical insurance coverage for the children.

Norma had*98 custody of the children during the taxable year 1967 and provided more than one-half of the children's total support during that year. Petitioner provided $770 per child, for a total of $1,540, plus minor gifts. While the parties were completing the financial arrangements of the divorce, petitioner asked for and received the following handwritten agreement, dated November 6, 1966, from Norma:

I Norma Bridgett will pay $60.55 for television from the 8th to the twelveth [sic] payment.

I will not claim at any time the kids as dependents (income tax) as long as I receive weekly payments.

In his return for 1967 petitioner claimed the two children as dependents. Respondent in his deficiency notice increased petitioner's taxable income to reflect the disallowance of the claimed deductions.

Opinion

The issue is whether petitioner is entitled to claim dependency deductions under section 151. The definition of a dependent for purposes of section 151 is found in section 152. Section 152(e) specifically deals with dependents of divorced parents. The general rule as found in section 152(e)(1) is that the custodial parent is entitled to any available dependency exemptions. However, one*99 exception to this general rule is found in section 152(e)(2)(A). Under that exception the noncustodial parent, petitioner in this case, is entitled to the exemption if he meets the following pertinent standards:

(1) A written agreement between the parents applicable to the taxable year beginning in such calendar year, provides that the parent not having custody shall be entitled to any deduction allowable under section 151 for such child, and

(2) such parent not having custody provides at least $600 for the support of such child during the calendar year.

Petitioner has met this applicable standard. Norma's only claim is that she was under extreme pressure when she signed the agreement, which qualifies under section 152(e)(2)(A)(i), and now wishes to repudiate it. This is not a sufficient reason for vitiating such an agreement.

Where a party enters into a contract * * * mere ignorance of the facts or hardship is not necessarily a ground for 799 relief; nor will the courts relieve one from the consequences of his own improvidence. The same is true with respect to poor judgment or lack of wisdom. [Footnotes omitted.]

A review of the legislative history of section 152(e) *100 ² convinces us that one of the express purposes of that section was to eliminate the uncertainty to the taxpayers and ease the administrative burden on the Internal Revenue Service which arises from the very issue involved herein. That purpose is achieved when the parties settle the question by written agreement.

*101 Since petitioner has met both requirements as expressed in the statute, and there is insufficient ground for vitiating the written agreement, we will abide by that agreement and find him entitled to the deductions under the statute.

Decision will be entered for the petitioner.