The opinion
CRAWFORD H. ELLIS, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.
Ellis v. Commissioner
Docket No. 95133.
United States Board of Tax Appeals
40 B.T.A. 735 ; 1939 BTA LEXIS 811 ;
October 18, 1939 , Promulgated
*811 HEAD OF A FAMILY. - Petitioner agreed to support a minor grandchild on condition that the grandchild be named after him. He did not adopt the grandchild, who continued to live with his parents and a brother at the family residence maintained by the petitioner. The petitioner supported the grandchild. Held, that the grandchild and his parents and brother constituted a family and that the petitioner was not the head of that family.
Robert Ash, Esq., for the petitioner.
Joe D. Hughes, Esq., for the respondent.
ARUNDELL
*735 This proceeding is brought for the redetermination of deficiencies in income tax for the calendar years 1934 and 1935 in the respective amounts of $588 and $483.89. The one issue is whether the petitioner is entitled to a personal exemption as the head of a family.
FINDINGS OF FACT.
The petitioner in 1934 and 1935 was a widower, residing in New Orleans, Louisiana. He lived in a house that he rented from a corporation in which members of his family owned stock. With him lived Franz Hindermann and his wife, who were petitioner's son-in-law and daughter, and their two children, Crawford Ellis Hindermann and Richard *812 Lane Hindermann. Petitioner paid all the household bills, including rent and food.
Petitioner's grandson, Crawford Ellis Hindermann, was born October 14, 1917, and was then named Franz Hindermann, Jr., after his father. Prior to 1919 petitioner agreed with his daughter that if she would change the child's name to Crawford Ellis Hindermann he, the petitioner, would assume full control of the child and pay all of his expenses. The child's name was changed from Franz Hindermann, Jr., to Crawford Ellis Hindermann by court order entered on August 7, 1919.
Petitioner has, since the agreement with his daughter, provided Crawford Ellis Hindermann with food, lodging, schooling, clothing, *736 medical care, a weekly allowance, and an automobile. Crawford Ellis Hindermann has always called the petitioner "Daddy."
Petitioner paid for the food and lodging of the other son of the Hindermanns, but not for his clothing and schooling.
For the years 1934 and 1935 petitioner claimed a personal exemption of $2,500. For 1934 he claimed credit for two dependents, one a brother, and the other the grandson. For 1935 he claimed credit for one dependent, the brother.
The respondent *813 denied exemption as head of a family for both years. He allowed credit of $400 for a dependent, the grandson, for 1934, and $300 for 1935 in view of the fact that the grandson became 18 years of age in October of that year.
Franz Hindermann and his wife claimed credit in their returns for their two sons as dependents. The respondent disallowed the claim for dependency of the one son, Crawford Ellis Hindermann, on the ground that his chief support was supplied by the petitioner in this proceeding.
Franz Hindermann, the father of Crawford Ellis Hindermann, reported net income of $8,368.88 for 1934 and $21,118.64 for 1935. In each year the amount reported was one-half of the community net income, and an equal amount was reported by Mrs. Hindermann.
OPINION.
ARUNDELL: The petitioner insists that he is entitled to be classified as the head of a family within the meaning of section 25(b)(1) of the Revenue Act of 1934. His argument is that under the facts in his case he meets every element of article 25-4 of Regulations 86, which defines the statutory term of "head of a family" as follows:
A head of a family is an individual who actually supports and maintains in one household *814 one or more individuals who are closely connected with him by blood relationship, by marriage, or by adoption, and whose right to exercise family control and provide for these dependent individuals is based on some moral or legal obligation.
This definition given in the respondent's regulations has been approved as a fair interpretation of the statute. .
Granting, for the purpose of discussion, that the facts bring the petitioner within the words of the quoted definition, it does not follow that he is the head of a family. The definition is framed for the purpose of ascertaining which individual of a family group is to be considered the head of that group and shall receive the larger credit. The statutory phrase is "the head of a family." Obviously, this means but one person may be the head of a family and the definition must be read in the light of that premise. Otherwise, it might be that more *737 than one person would be entitled to the family head credit. For example, a father and mother might each contribute equal sums in payment of the food, lodging, etc., for themselves and their children, and each would *815 thus literally come within the definition. Under petitioner's view, carried to the extreme, a family could have as many "heads" as there are adults living in the household and contributing materially to the support of the minor children. It is too clear for argument that this is not the intent of either the statute or the regulations.
In this case the Hindermanns - husband and wife and two sons - constituted a family. Although one son was supported entirely by his grandfather, he was not thereby removed from the Hindermann family fold. He was not adopted by the grandfather and he at all times lived in the same household with his parents and his brother. Franz Hindermann was the head of his family under the generally recognized principle of law that the husband is the head of the family, and, in the absence of unusual circumstances, he should be so regarded here. In , the very unusual facts resulted in the allowance of the family head credit to a woman taxpayer who was obliged to support her mother in consequence of the willful omission of the mother's husband to support her. While the husband was gainfully employed, other dependents *816 apparently consumed his income. The mother had no income of her own, and upon her husband's failure to support her, she was dependent on the taxpayer, her only child, for support. We said in part:
It is true that under local law a husband is a head of a family and has a primary legal duty to support his wife; nevertheless, where he has neglected his legal duty and failed to exercise his legal rights as a head of a family, theh, in applying a provision of a revenue act, we believe that it is in accord with the intendment of Congress to hold that another person who acts as head of the family under exercise of a moral obligation was the head of the family for purposes of taxation.
In the present case we have none of the unusual facts that we had in the Loughran case. Here Franz Hindermann had substantial income and there is no evidence of any inability or unwillingness on his part to support his sons. There are no facts in this case that deprived Franz Hindermann of his status as the head of his family. This being so, the petitioner's support of one member of that family does not make him its head.
Reviewed by the Board.
Decision will be entered for the respondent. *817