Filippoone v. Dept. of Rev.
This text of Filippoone v. Dept. of Rev. (Filippoone v. Dept. of Rev.) is published on Counsel Stack Legal Research, covering Oregon Tax Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Opinion
IN THE OREGON TAX COURT MAGISTRATE DIVISION Income Tax
MONICA N. FILIPPONE, ) ) Plaintiff, ) TC-MD 220461G ) v. ) ) DEPARTMENT OF REVENUE, ) State of Oregon, ) ) Defendant. ) DECISION
Plaintiff appealed Defendant’s disallowance of the working family household and
dependent care credit (WFHDC credit) she claimed for the 2021 tax year. A remote trial was
held, at which Plaintiff appeared pro se and testified. Peter Reynolds, auditor, represented
Defendant. Plaintiff’s Exhibits 1 to 6 and Defendant’s Exhibits A to E were admitted.
I. STATEMENT OF FACTS
Plaintiff claimed the WFHDC credit on her 2021 return, reporting $6,000 in payments to
child-care providers. (Ex A at 1–2.) She testified that she paid her friend, Solomon Jordan, to
care for her dependent granddaughter while she worked June through December 2021.
Plaintiff’s documentary evidence consists of a single child-care receipt for the six months
of care, excerpts from her bank statements, a declaration from Mr. Jordan with a Form OR-PS
signed by him, a copy of the release of claim exemption for taxpayer’s granddaughter for the
years 2021–2023, and documents entitled “Time Sheet,” purported to record the days and hours
Plaintiff worked from June through December 2021. (Exs 1–6.)
According to Mr. Jordan’s declaration, he agreed to watch Plaintiff’s granddaughter
while Plaintiff worked because he “was released from prison in March 2021 and needed some
///
DECISION TC-MD 220461G 1 income.” (Ex 3 at 1.) He provided “a signed receipt for the care provided and the amounts paid
on 12/6/2021 * * *.” (Id.)
Mr. Jordan’s “signed receipt” is a document entitled “Child Care Tracking Expenses
Paid,” which is signed at the bottom by Plaintiff and Mr. Jordan. (Ex 1.) It contains the
following table:
DATES OF CARE FOR [* * *] HOURS AMOUNT 6/1 – 6/11 = 9 days 88 528.00 6/14 – 6/30 = 12 days 97 582.00 7/2 – 7/30 = 23 days 161 966.00 8/1 – 8/31 = 21 days 168 1008.00 9/5 – 9/30 = 18 days 144 864.00 10/1 – 10/31 = 20 days 160 960.00 11/1 – 11/29 = 19 days 153 918.00 12/1 – 12/23 = 16 days 112 672.00 Payments: 9/9/21 electr transfer +3,000.00 12/6/21 electr transfer +3,500.00 TOTAL 6,498.00 -6,500.00 0.00 DUE
(Id.) The receipt itself is undated, but according to a statement signed by Mr. Jordan and
Plaintiff in January 2023, it was “provided and signed on 12/6/21 when the final payment was
made and zero balance.” (Ex 3 at 9.)
Plaintiff’s bank statement excerpts show Zelle transfers in the amounts of $3,000 on
September 9, 2021, and $3,500 on December 6, 2021. (Ex 2 at 2–3.) On the statements
provided to the court, the line items for those transfers were labeled “moni us bank ck acct.”
(Id.) In copies of the same bank statements previously provided by Plaintiff to Defendant, those
labels had been whited out. (Ex C at 1–2.)
Mr. Jordan describes the December payment as including an $84 balance forward from
what was owed after the September payment. (Ex 3 at 2.) His declaration states:
DECISION TC-MD 220461G 2 “I received both payments electronically from Monica Filippone into a US bank account that was not in my name however I have full access to this account and a debit card to use when needed. The reason for not having my own account was I was just released as indicated above and due to covid guidelines and DMV and other state building COVID closures it took me awhile to obtain the necessary documents and ID to open my own account * * *.”
(Id.) Mr. Jordan’s Oregon Driver License, a copy of which is attached to his declaration, bears
an issue date of April 14, 2021. (Id. at 12.)
Plaintiff testified that she erred in reporting $6,000 in child-care payments on her return
because she had actually paid $6,500. She explained that error as the result of having forgotten
about the $84 balance forward following the $3,000 payment to Mr. Jordan in September 2021.
She testified that she chose not to amend her return after calculating that the additional expense
would not materially change amount of credit she received.
II. ANALYSIS
The issue is whether Plaintiff has shown that she paid Mr. Jordan for child care in 2021
and thereby qualified for the WFHDC credit. Because Plaintiff asks the court to reverse
Defendant’s adjustment, she must bear the burden of proof. See ORS 305.427. 1 Taxpayers are
required to “maintain all records that are necessary to a determination of the correct tax liability.”
OAR 150-314-0265(2)(a). 2
The WFHDC credit is a refundable credit available to eligible taxpayers for a percentage
of their employment-related expenses, including their child care expenses. ORS 315.264(1)(a);
IRC § 21(b). 3 Child-care expenses must be “paid for” child care. See IRC § 21(b)(2)(A).
1 The court’s references to the Oregon Revised Statutes (ORS) are to 2019. 2 Oregon Administrative Rules (OAR) 3 Internal Revenue Code (IRC)
DECISION TC-MD 220461G 3 Taxpayers who pay for child care with cash face “significant challenges” in proving
payment because they lack the canceled checks that provide “evidence that an expense was paid
on a certain date to a specific individual or entity” by the taxpayer. Shirley v. Dept. of Rev., TC–
MD 130451D, 2014 WL 811543 at *3 (Or Tax M Div, Mar 3, 2014). Contemporaneous receipts
properly completed by the care provider are “essential evidence” for those who pay in cash. Id.
Documentary evidence and testimony are evaluated in light of one another: “Inadequately
explained discrepancies between testimony and the documented evidence diminish the probative
value of both.” Zerba v. Dept. of Rev., TC-MD 190373G, 2020 WL 7489029 at *2 (Or Tax
M Div, Dec 21, 2020).
In this case, the documentation provided by Plaintiff does not clearly show that payments
were made to Mr. Jordan for child care. The undated receipt is noncontemporaneous; it was not
prepared on the date of the first payment, and the evidence that it was prepared on the date of the
second payment is a statement made more than a year later. There are no canceled checks
because the payments were allegedly made by Zelle, but the bank statements showing the Zelle
transfers do not show payment to Mr. Jordan.
The lack of documentation is particularly damaging to Plaintiff’s case because of the
unusual nature of the alleged payment arrangement—only two payments for six months of child
care. Although Mr. Jordan “needed some income” when he began providing care in June,
Plaintiff did not make the first Zelle transfer until September, 4 and the second transfer allegedly
included payment for care that had not yet been provided at that time. No explanation was given
for why regular, timely payments for child care were not made.
4 The date of that transfer is given as September 6 on the receipt, but September 9 on the bank statement.
DECISION TC-MD 220461G 4 The evidence contains other inadequately explained discrepancies. It is unclear why a
forgotten $84 balance forward from the September Zelle transfer should lead Plaintiff to
understate her payments by $500 on her tax return. It is unclear why the second Zelle transfer
was for $2 more than the balance invoiced by Mr. Jordan. It is unclear why Mr. Jordan lacked
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