Lutes v. Commissioner

¶1Memorandum Findings of Fact and Opinion

¶2FORRESTER, Judge: Respondent has determined deficiencies in petitioner's income tax for the taxable years 1958 and 1959 in the amounts of $512 and $515, respectively. The only issue presented is whether or not petitioner furnished over one-half of the cost of support for his four children during the years in issue.

¶3Findings of Fact

¶4Some of the facts have been stipulated and are so found.

¶5Petitioner is an individual residing in Indianapolis, *68Indiana, and filed his individual income tax returns for the calendar years 1958 and 1959 with the district director of internal revenue at Indianapolis, Indiana.

¶6Petitioner and Blanche N. Lutes (hereinafter referred to as Blanche) were married on January 1, 1947. Four of their children, Ronald, Karen, Geraldine, and Carl Lutes, were living during the years 1958 and 1959 and were under 19 years of age.

¶7Petitioner and Blanche separated in November 1957 and were divorced on April 16, 1958. From the time of their separation and throughout the years here in issue, Blanche had custody of the four children. Blanche remarried prior to the trial of this case and is now known as Blanche N. Bell.

¶8It is stipulated that petitioner paid $1,154 and $1,500 during 1958 and 1959, respectively, through the Montgomery Circuit Court, Crawfordsville, Indiana, for the support of the aforementioned four children. In addition, petitioner carried hospital insurance for himself and the four children during the years 1958 and 1959, the total cost of which was $65.57 and $75.80, respectively.

¶9Petitioner regularly furnished the support for Blanche and their four children until April 1957, when Blanche*69 began working and contributing to the support of the family.

¶10The adjusted gross income for the years 1958 and 1959 of petitioner and of Blanche as shown by their tax returns is as follows:

Year	Petitioner	Blanche
1958	$4,666.01	$3,555.48
1959	4,861.78	4,213.13

During 1958 the sum of $527.51 was withheld from Blanche's wages, of which $483.51 was refunded to her during 1959. This refund was primarily used to purchase an automobile for cash. During 1959 the sum of $528.24 was withheld from her wages. Blanche borrowed the sum of $150 in each of the years 1957, 1958, and 1959. During the year 1958, prior to her divorce, she cashed in at least one $18.75 bond per month. Blanche's mother made some gifts to help support the four children during the years at issue.

¶11During the year 1957 petitioner and Blanche had no savings. At the time of their separation, Blanche had little or no money and numerous obligations. During the years 1958 and 1959 Blanche spent virtually all of her take-home pay for herself and her children.

¶12Shortly after his divorce, petitioner filed a bankruptcy petition. As a result thereof, Blanche paid off certain debts incurred prior to the*70 divorce. In 1958 she paid $27.10 per month to a finance company, and also paid approximately $90 on other debts incurred during coverture.

¶13In addition, Blanche made the following expenditures:

1958
Desk, chair and lamp	$ 45.85
Washing machine	149.45
Gas range	210.80
Attorney fees for divorce	175.00
Bicycles	*
Monument	40.00
Back personal property taxes	13.06
	$634.16
1959
Power mower	$ 54.95
Sectional and end tables	233.05
Tires	144.28
Car	390.00
Repairs on car	39.85
Taxes	3.16
	$865.29

¶14In addition, Blanche paid the premiums on life insurance policies and hospitalization for the children during the years at issue. She also gave each child between $1 and $1.50 per week as an allowance. While Blanche worked, her mother cared for the children and Blanche paid her $15 per week for her services.

¶15Blanche worked nights for 4 months during each year in issue. She ate her dinner meals away from home, paying $1 each therefor, during the times when she worked nights.

¶16None of petitioner's children worked or earned income during*71 the years 1958 and 1959.

¶17Petitioner claimed his four children as dependents during each of the years 1958 and 1959. Respondent disallowed dependency deductions for the children for both years.

¶18Opinion

¶19Petitioner has the burden of proving both the total amounts spent for the support of the children during the years in issue and also that he provided over one-half of such amounts. ¹ The question of the total support of the children is the only contested item, as the amounts of petitioner's contributions are stipulated.

¶20*72 It is obvious that petitioner has not understood the extent of his burden as to the total amount spent each year for the support of his children, for he has contented himself on examination and cross-examination of Blanche, and also on brief, with attempts to discredit her testimony, principally by showing that her estimates of the total amounts spent by her in 1958 and 1959 exceeded the total amounts available to her in those years.

¶21Petitioner also relies on his own estimate that the children's standard of living in 1958 and 1959 had not been increased over prior years, and that their support in prior years was estimated by him at $2,043.50. Petitioner relies on Theodore Milgroom, 31 T.C. 1256 (1959), acq. 1959-2 C.B. 6, but his reliance is misplaced. In Milgroom the taxpayer was the only witness and his statements were unchallenged. Here, as demonstrated by our findings, there is a great deal of specific information.

¶22Petitioner has succeeded in getting the record into a highly confused state, but long examination of it has demonstrated to us that Blanche had such funds available, and probably spent more than $2,412.92 in 1958 and $3,121.28 in 1959*73 for the support of the children. It is certain that petitioner has failed in his burden of proving otherwise.

¶23Decision will be entered for the respondent.