Do Siblings Qualify As Qualifying Children for the

Earned Income Tax Credit

    Here's the case of Rafael Barajas, pro se

Taxpayer lived in an apartment with his mother and his three younger siblings. His father and his older siblings did not live with them. Taxpayer was employed as a machinist, and he was the financial provider for the family. He paid the apartment rent and the household bills. Taxpayer's mother suffered from cancer. She relied on crutches for walking and on Taxpayer for transportation outside of the apartment. Taxpayer frequently drove her to clinics for cancer treatment, to the grocery store, and to the homes of relatives. Taxpayer's younger siblings attended school full time. Because their mother does not speak English, they relied on Taxpayer for assistance with their homework when needed. Taxpayer and his mother shared responsibility in the discipline of his younger siblings. His mother established the rules in the household, such as setting curfews, and relied on Taxpayer to enforce the rules.

Taxpayer reported income of $14,101 on his 1999 Federal income tax return. His income consisted entirely of wages. Taxpayer claimed an earned income credit computed by treating two of his siblings as qualifying children. In the notice of deficiency, IRS disallowed the earned income credit. IRS contends that Taxpayer did not care for any of his siblings as if that sibling were his own child.

For a taxpayer to be entitled to an earned income credit for a qualifying child, the qualifying child must satisfy a residency test, an age test, and a relationship test. [Sec. 32(c)(3)(A)]. Taxpayer's siblings were minors and students living in the same residence with him and that the residency and age tests are satisfied. The relationship test can be satisfied if the individual is an "eligible foster child"  of the taxpayer. [Sec. 32(c)(3)(B)(i)(111)].  An eligible foster child is defined in part as an individual who "the taxpayer cares for as the taxpayer's own child". [Sec. 32(c)(3)(B)(iii)(Il)]. Neither the Code nor the regulations define how a taxpayer cares for an individual as his or her own child.

The record shows that Taxpayer cared for his younger siblings in a parental capacity. In addition to being the primary source of financial support for the household as well as for each of his younger siblings, Taxpayer assumed the role of a father figure with respect to his younger siblings. Taxpayer and his younger sister testified convincingly that Taxpayer and his mother jointly shared parental duties during the year in issue, and that Taxpayer conducted himself and cared for his siblings as though he were one of the parents in the household. He helped his siblings with homework at times, since his mother could not speak English and his father had left the household. He even had to explain personal hygiene to his younger sister because neither his mother nor an older sister could bring herself to do this task. His mother was unable to guide the younger children in the society in which they grew up, since she was disabled, spoke no English, and knew only traditional Mexican society. Although he was available only to a limited extent because of the demands of his work, Taxpayer filled the void for his siblings. We conclude that under difficult circumstances, Taxpayer satisfied the requirements of sec. 32(c)(3)(B)(iii). ‑ eligible foster child of taxpayer.