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individual’s gross income would have to be less than zero—a near impossibility. And because it would be highly unusual for an individual to have gross income less than zero,1 virtually no individuals would be eligible as qualifying relatives. A zero exemption amount would thus effectively render § 152(d)(1)(B) inoperable and eliminate an entire category of dependents. The Treasury Department and IRS do not believe Congress intended to make such a significant change in such an indirect manner. In addition, the new $500 credit that Congress enacted at the same time, and in the same Act, as it reduced the § 151(d) exemption amount likewise depends on a non- zero exemption amount in § 152(d)(1)(B). Section 24(h)(4)(A), as amended, creates a $500 credit available for each dependent of the taxpayer other than a qualifying child for whom the child tax credit is allowed. This provision references the definition of dependent in section 152, which includes both qualifying relatives and qualifying children, and it was understood at the time of enactment that this provision “generally retain[ed] the present-law definition of dependent.” H.R. Rep. No. 115-466 at 227. But if the exemption amount referenced in § 152(d)(1)(B) were zero, the entire category of qualifying relatives would be effectively excised from the definition of dependent. As a consequence, the $500 credit generally would not be available for qualifying relatives, and the availability of this credit would shrink to only a limited category of qualifying children for whom the child tax credit is not allowed. This does not appear to be what Congress intended when it enacted the new $500 credit. Further, head of household filing status also depends on a non-zero exemption amount in § 152(d)(1)(B). Under § 2(b)(1)(A), an individual is considered a head of

1 This could occur if an individual engaged in a business involving the sale of goods incurs inventory costs that exceed gross sales revenue. See § 1.61-3(a).