Divorce Decree Insufficient to Claim Dependent

Despite the terms of a divorce decree, a noncustodial parent was unable to claim a dependency exemption and child tax credit due to an uncooperative ex-spouse.  The taxpayer divorced in 1995 and his ex-wife was granted custody of their child.  The divorce decree provided that the taxpayer could claim the dependency exemption for his child in odd-numbered years if he was current on child support payments.  The decree also required his ex-wife to execute and deliver a Form 8332, Release of Claim to Exemption for Child of Divorced or Separated Parents by January 31 of each year after the year for which the taxpayer was entitled to claim the child as a dependent.

Following the divorce, the ex-wife never delivered a signed Form 8332 to the taxpayer.  Nonetheless, he claimed the dependency exemption for the child for 1995, 1997, and 1999.  On his 2005 income tax return, he claimed a dependency exemption and a child tax credit for the child.  Rather than attaching to the return a signed Form 8332, the taxpayer attached a copy of the divorce decree.  The IRS, however, disallowed the deduction and credit, and the Tax Court affirmed.

The Tax Court noted that under Section 152(e) of the Code that when the parents of a dependent child are divorced or legally separated, the parent with custody of the child for the greater portion of the calendar year (the custodial parent) generally gets to claim the child as a dependent.  A noncustodial parent is entitled to the dependency exemption if the custodial parent executes a written declaration releasing his or her claim to the deduction and the noncustodial parent attaches the declaration to his or her tax return.

The IRS has issued Form 8332 to standardize the written declaration required by Section 152(e). This form requires a taxpayer to provide the following information:

(1) The child's name. (2) The noncustodial parent's name and Social Security number. (3) The custodial parent's Social Security number. (4) The custodial parent's signature. (5) The date of the custodial parent's signature. (6) The years for which the claims were released.

The Tax Court in finding for the IRS held the divorce decree was not an adequate declaration or substitute for Form 8332.  The divorce decree was not signed by the parent relinquishing the dependency exemption.  Accordingly, the court reasoned that Congress intended the signature requirement to be strictly applied because it did not want federal courts involved in state court custody fights. Neither the signature of an attorney nor a judge was sufficient to satisfy the signature requirement for the taxpayer and his ex-wife. Because the ex-wife did not sign the divorce decree, that document did not meet the signature requirement of Section 152(e)(2)(A), so the taxpayer did not file with his 2005 return with a substantial equivalent to the Form 8332. Consequently, he was not entitled to claim the dependency exemption for his child for that year.

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