Just a question

[dtlee]

Thanks again.

[Koss]

Uniform Definition

It should also be noted that there are numerous examples in the code where tax rules that are completely unrelated to each other often play off of each other for purposes of defining terms. Rather than re-state the same definition over and over, Congress often says, for purposes of this section, a qualifying whatever has the same definition as used in code section such and such. The two codes have no relationship to each other, but they play off each other’s definitions of terms. A person doesn’t necessarily have to utilize the other code section to qualify for the section that uses the other’s definitions. Thus, Burton’s argument that a qualifying child has to be a dependent because the definition appears under the dependency code section is not consistent with the way the definition of various terms are applied in other code sections.

I'm coming into this thread late, because the original title had no real subject content.

Bees Knees and I agree on almost everything. The "uniform definition" uses the same relationships, but each code section adds or subtracts something. I agree with Bees Knees that just because IRC 32 or IRC 24 is using the definition found in IRC 152 does not automatically mean that the child must be a dependent. As I have said in other posts, the code seems to instruct us to literally "copy and paste" certain paragraphs from IRC 152, and then modify that text in certain ways. So the code sections for HOH, CTC, EIC and CDCC are "borrowing" part, but not all of IRC 152, and these sections generally make no mention of dependency.

But that's my whole point. Because the definition of a qualifying child is clearly different for each benefit, I don't see how a taxpayer can have a "qualifying child," for purposes of the dependent exemption, if the taxpayer is not eligible to claim any dependent exemptions at all. They may indeed have a qualifying child for some other purpose. But nowhere is there a core definition that is common to all the benefits. And the "copy and paste" operation does not tie the benefits together. Each code section stands alone in determining whether a person may claim that benefit.

When IRC 152 says that a qualifying relative cannot be the qualifying child of anyone else, we are not instructed at that point to visit other sections of the code, which have borrowed the term "qualifying child" and substantively modified its meaning, to see whether the child in question somehow fits that modified definition for some other taxpayer, who may or may not be eligible to claim the benefits of those other code sections.

As an aside:

Instructions for 1040 explicitly say that you cannot claim EIC if you are a dependent. Where is this in the code? The code says there a two types of individuals who are eligible to claim EIC: (1) those who have a qualifying child, and (2) those who do not have a qualifying child and are not a dependent of someone else.

The revised text of IRC 32 references IRC 152(c) for the definition of qualifying child, but nothing else has changed. Why can't someone who is a dependent under IRC 152(c) have a qualifying child under IRC 32?

The IRS is imposing restrictions that are not found anywhere in the law.

Burton M. Koss
koss@usakoss.net

https://www.usakoss.net

[Bill Tubbs]

Burton, I read your website a couple days ago, and I do have to say that I agree with your reading of the code itself -- particularly in the case of b/f being able to claim g/f's kid as a dependent when b/f claims g/f as a dependent.

But nowhere is there a core definition that is common to all the benefits. And the "copy and paste" operation does not tie the benefits together. Each code section stands alone in determining whether a person may claim that benefit.

Was wondering what you think about the "Qualifying child of more than one person" in the Form 1040 instructions, page 21. It says that if one person claims the child for HOH then no other person can claim the child for EIC purposes. But, if "each code section stands alone", why couldn't one person get HOH and another get EIC (using the example on pg 21 is fine)?

Bill

(BTW, how do I log into this site? Do I have to be a customer of TheTaxBook?)

[Bees Knees]

But that's my whole point. Because the definition of a qualifying child is clearly different for each benefit, I don't see how a taxpayer can have a "qualifying child," for purposes of the dependent exemption, if the taxpayer is not eligible to claim any dependent exemptions at all.

Section 32(c)(3)(A) says “the term qualifying child means a qualifying child of the taxpayer (as defined in section 152(c), determined without regard to paragraph (1)(D)…..”

Now stop and think. If you disregard paragraph (1)(D) in Section 152(c), the person can no longer be considered a qualifying child for purposes of the dependency exemption. Right? So Section 32 obviously does not care if the qualifying child is a qualifying child for purposes of the dependency exemption.

Now lets use the same logic and analyze Section 152(d)(1)(D). For purposes of a qualifying relative, that code says a qualifying relative cannot be a qualifying child of such taxpayer or of any other taxpayer. It does not say anything about the qualifying child being claimed as a dependent. It just says the child cannot be a qualifying child.

Wouldn’t it have been easier to just say the child cannot be a dependent of any other taxpayer, if that was the intent? We know that is true. A person cannot be claimed as a dependent by more than one taxpayer. But this code uses the term Qualifying child. Nowhere in the code Section 152(c) definition of a qualifying child does it say the qualifying child actually has to be claimed as a dependent by the taxpayer that qualifies to take the dependency exemption. Your argument rests on the fact that the girl friend can’t utilize the dependency exemption because she is being claimed as a dependent by the boyfriend. But that scenario is not addressed in code Section 152(c) since nothing in the qualifying child definition is tied to the taxpayer actually claiming the child as a dependent. In fact, the code even addresses the possibility that more than one person could have the same child as a qualifying child, thus the need for the tie breaker rules.

When IRC 152 says that a qualifying relative cannot be the qualifying child of anyone else, we are not instructed at that point to visit other sections of the code, which have borrowed the term "qualifying child" and substantively modified its meaning, to see whether the child in question somehow fits that modified definition for some other taxpayer, who may or may not be eligible to claim the benefits of those other code sections.

Yes, but we are also not given any indication that a qualifying child stops being a qualifying child if Section 152(b)(1) comes into play. That limitation is given outside of the definition of a qualifying child in Section 152(c).

The revised text of IRC 32 references IRC 152(c) for the definition of qualifying child, but nothing else has changed. Why can't someone who is a dependent under IRC 152(c) have a qualifying child under IRC 32?

Because Section 32(c)(1)(B) in the context of who is eligible to claim the EIC says: “If an individual is the qualifying child of a taxpayer for any taxable year of such taxpayer beginning in a calendar year, such individual shall not be treated as an eligible individual for any taxable year of such individual beginning in such calendar year.”

[dtlee]

Bees Knees,

Now I am confused.

Originally Posted by Koss
The revised text of IRC 32 references IRC 152(c) for the definition of qualifying child, but nothing else has changed. Why can't someone who is a dependent under IRC 152(c) have a qualifying child under IRC 32?


Because Section 32(c)(1)(B) in the context of who is eligible to claim the EIC says: “If an individual is the qualifying child of a taxpayer for any taxable year of such taxpayer beginning in a calendar year, such individual shall not be treated as an eligible individual for any taxable year of such individual beginning in such calendar year.”

I am not sure if you are saying:

• For purposes of EIC, there are two meanings to Qualfiying Child; the meaning for the qualifying individual and the meaning for the taxpayer trying to claim the credit.

In my mind only one definition should apply unless they specifically cite another section of the code, and thus, the wording in Section 32(c)(1)(B) should be applying the words "qualifying child" within the context of the EIC not within some other unreferenced section. I would read this as you cannot be eligible for EIC if you are "the qualifying child for EIC purposes of a taxpayer."

Also, when you answered the question for Koss, "Why can't someone who is a dependent under IRC 152(c) have a qualifying child under IRC 32?" you indicated that it was because of the use of the phrase "qualifying child" in Section 32(c)(1)(B). As I understand it, "qualifying child" and "dependent" are not synonyms. A qualifying child for Child Tax Credit purposes, or example, does not need to be a dependent. Even under the dependency rules, a dependent under the Qualifying Relative rules is specifically not a Qualifying Child. Is there some place you are aware of where the restriction includes the phrase "dependent" when restricting individuals from claiming the EIC?

Thanks for your time.

[dtlee]

(BTW, how do I log into this site? Do I have to be a customer of TheTaxBook?)

Bill,

If you are seeing the same screen I am, at the top towards the right side of the screen should be a place to enter the User Name and Password. If you have not yet registereed, that is along the second bar on the left. Once you register, you can choose to be logged in automatically by checking the box under User/Password entry fields.

Hope this helps.

[jainen]

not what the code says

>>the qualifying child "for EIC purposes"<<
>>the qualifying child "for dependency"<<

But that's not what the code says. It just says Qualifying Child. It is true that a person could be a Qualifying Child to one person for one benefit and to another person for a different benefit. So what? That's why we have tiebreaker rules.

[Bees Knees]

In my mind only one definition should apply unless they specifically cite another section of the code, and thus, the wording in Section 32(c)(1)(B) should be applying the words "qualifying child" within the context of the EIC not within some other unreferenced section. I would read this as you cannot be eligible for EIC if you are "the qualifying child for EIC purposes of a taxpayer."

I agree.

Qualifying child in that context is a qualifying child as defined in Section 32(c)(3). BUT, doesn’t that produce the same result? Section 32(c)(3) includes every qualifying child under Section 152(c), plus others, because it lifts one of the restrictions imposed by Section 152(c)(1)(D), namely, the child providing over half of his or her own support.

But that just proves my point. Koss asked why a dependent under Section 152(c) can’t have a qualifying child for EIC purposes, other than the fact that the IRS says so. Well, the reason is because anyone who is a dependent described in Section 152(c) is going to also fit the definition of an ineligible individual under Section 32(c)(1)(B). The EIC definition of a qualifying child is every bit as inclusive as the dependency exemption, PLUS those who provide over 50% of their own support. So nobody claimed as a dependent under Section 152(c) could possibly not also be an ineligible individual under Section 32(c)(1)(B).

[dtlee]

I agree.
But that just proves my point. Koss asked why a dependent under Section 152(c) can’t have a qualifying child for EIC purposes, other than the fact that the IRS says so. Well, the reason is because anyone who is a dependent described in Section 152(c) is going to also fit the definition of an ineligible individual under Section 32(c)(1)(B). The EIC definition of a qualifying child is every bit as inclusive as the dependency exemption, PLUS those who provide over 50% of their own support. So nobody claimed as a dependent under Section 152(c) could possibly not also be an ineligible individual under Section 32(c)(1)(B).

I am not seeing how a person who is a Qualifying Relative Depenedent (for example someone unrelated who lived with you the entire year) would automatically be ineligible to claim the EIC based on what you are saying. Can you please clarify again. I am trying to see the connection. Are you perhaps saying that since a dependent cannot have dependents, then a dependent can't claim EIC? I did not see that in the code anywhere.

[Bees Knees]

I am not seeing how a person who is a Qualifying Relative Depenedent (for example someone unrelated who lived with you the entire year) would automatically be ineligible to claim the EIC based on what you are saying. Can you please clarify again. I am trying to see the connection. Are you perhaps saying that since a dependent cannot have dependents, then a dependent can't claim EIC? I did not see that in the code anywhere.

The 1040 instructions, page 46 says you can't claim EIC if you are a qualifying child of another person. I was talking about a qualifying child.

It also says for those without a qualifying child in the next column, that they can't claim EIC if they are claimed as a dependent on someone else's return. That is found at Section 32(c)(1)(A)(ii)(III) where it denies it for someone trying to claim EIC with zero children.

So yes, there is a rare case where a person claimed as a dependent under the qualifying relative rules because they made less than $3,200 could claim EIC if they have a qualifying child who is not the qualifying child of someone else.

[Bees Knees]

Point of clarification. When I said a person claimed as a dependent under Section 152(c), that is the same as saying a person claimed as a dependent under the qualifying child rules. A person claimed as a dependent under the qualifying relative rules is Section 152(d).

[dtlee]

Bees Knees,

I understand your assessment. If I believed that they were talking about a Qualifying Child within the scope of the refined definition for EIC purposes, I would agree with you and I would not be asking for clarification. That was not this question.

I understood this discussion to be about the IRS position (not necessarily yours, but I thought you were defending it) that a person claiming EIC cannot be a dependent. They do not say it very well, but their interpretation is in Publication 17, page 238, column 3, third paragraph (Rule 12), that if you are able to be claimed as a dependent, you are not eligible to claim the Earned Income Credit. I understood Mr. Koss as asking, "Why can't someone who is a dependent under IRC 152(c) have a qualifying child under IRC 32?" I also do not see where that position comes from.

The situation you are citing is their Rule 13.

(Separately, I am saying that the term "Qualifying Child" for this purpose is a Qualifying Child as identified in paragraph 3 of section 32(c) which differs from, but is based on the definition in 152(c))

[Bees Knees]

Bees Knees,

I understood this discussion to be about the IRS position (not necessarily yours, but I thought you were defending it) that a person claiming EIC cannot be a dependent. They do not say it very well, but their interpretation is in Publication 17, page 238, column 3, third paragraph (Rule 12), that if you are able to be claimed as a dependent, you are not eligible to claim the Earned Income Credit.

No it does not say that. Rule 12 on page 238 is in the context of the person trying to claim EIC without a qualifying child. In the middle column it says "Part C. Rules If You Do Not Have a Qualifying Child." Which comes from Section 32(c)(1)(A)(ii)(III).

[Bees Knees]

I understood Mr. Koss as asking, "Why can't someone who is a dependent under IRC 152(c) have a qualifying child under IRC 32?" I also do not see where that position comes from.

The situation you are citing is their Rule 13.

Because Section 32(c)(1)(B) says so. IRC 152(c) is the definition of a qualifying child. Section 32(c)(3) defines a qualifying child as the same as Section 152(c) with a few extra people added.

To sum up, there are two groups of dependents under Section 152 that can't claim EIC.
1) Those who are claimed as a qualifying child [Section 32(c)(1)(B)].
2) Those who are trying to claim EIC without a qualifying child but are claimed by someone else as a dependent [Section 32(c)(1)(A)(ii)(III)]

Those are the only two groups of dependents the IRS mentions in both the 1040 instructions and IRS Pub 17. The IRS does not make the blanket statement that no dependent can claim EIC. It only makes that statement in the context of someone without a qualifying child. In other words, if you don't have a qualifying child, and you are claimed as a dependent by someone else, then you can't claim the EIC.

[dtlee]

Thank you for the clarification!

I believe that was the distinction I was missing.