January 17, 2013
Tax Court: Section 152(c)(2)(A) Does Not Violate Constitutional Rights of Navajo Tribal Elder
Begay v. Commissioner, T.C. Memo. 2013-17 (Jan. 16, 2013):
Petitioner is a tribal elder of the Navajo Indian Nation. ... Petitioner claimed a dependency exemption deduction for TD, head of household filing status, the earned income credit, and the child tax credit. Petitioner identified TD as her nephew on her 2009 Federal income tax return. ... .
TD is a member of the Navajo Indian Nation and is a clan relative of petitioner. In the Navajo Indian Nation, a clan relative is another member of the Navajo Indian Nation and certain clan obligations exist between clan relatives. Petitioner supports TD as a result of her clan obligation. TD is not a child of petitioner or a descendant of such child as described in § 152(c)(2)(A). TD is not a brother, sister, stepbrother, or stepsister of petitioner or a descendant of any such relative as described in § 152(c)(2)(B). With respect to TD, petitioner met the requirements set forth in § 152(c)(1)(B), (C), (D), and (E). In the notice of deficiency respondent disallowed petitioner’s dependency exemption deduction, head of household filing status, earned income credit, and child tax credit. ...
Although petitioner concedes that TD is not her qualifying child under § 152(c)(2), she argues that the exclusion from the § 152(c)(2) relationships of certain obligatory clan-based relationships in Navajo culture violates her constitutional rights under both the Free Exercise Clause of the First Amendment to the Constitution and the Fifth and Fourteenth Amendments to the Constitution. According to petitioner, in Navajo culture and tradition children are not only children of the parents; they are also children of the clan. Petitioner submits that a Navajo clan consists of the first clans of the child’s mother, father, maternal grandfather, and paternal grandfather and that the clan relationship may extend beyond the foregoing if, for example, the child is adopted. ...
Petitioner argues that the failure of the § 152(c)(2) relationship classification to recognize TD as her qualifying child unreasonably burdens her religious rights. Respondent does not challenge either the existence of petitioner’s clan relationships and obligations or that such obligations to clan relatives stem from the Navajo religion. ...
The § 152(c)(2) relationship classification does not condition petitioner’s receipt of tax benefits on her forgoing her clan obligations to TD or force her to choose between following her clan obligations to TD and receiving tax benefits. Furthermore, the § 152(c)(2) relationship classification does not deny petitioner tax benefits because she fulfills her obligations to TD or force her to abandon her clan obligations to TD by threat of civil or economic sanctions. Regardless of petitioner’s ineligibility for tax benefits such as the earned income credit, she is at liberty to fulfill her clan obligations to TD. Petitioner’s argument for the burden on her religious rights is, instead, financial hardship and continuing Navajo child poverty. However, the Supreme Court has rejected the notion that a taxpayer’s free exercise of her religious beliefs is somehow not fully realized unless it is subsidized by tax benefits such as the earned income credit.
(Hat tip; Bob Kamman.)
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