Judge Disagrees WIth Outcome Of Case Based On Statute

In a recent Tax Court case, even presiding Judge Vasquez thought the result was unfair.

Richard Nixon (not that one!) was a divorced parent who paid child support for two children who were in the custody of his ex-wife. Neither child qualified as Nixon's dependent under the normal dependency tests, principally because the children did not reside with him for more than one-half of the year.

However, a special rule allows a noncustodial parent to claim the dependency exemption when the custodial parent signs a written declaration that the custodial parent will not claim the child as a dependent and the noncustodial parent attaches that declaration to their tax return. The IRS provides Form 8332, Release of Claim to Exemption for Child of Divorced or Separated Parents, for this purpose.

The support order entered into by Nixon and his ex-wife provided that he was entitled to the dependency exemption for both children in the year at issue in the case. The support order further provided that, as long as Nixon was current on his support payments (which he was), both parents were required to sign the federal income tax dependency exemption waiver. However, Nixon's ex-wife refused to sign the form.

Nixon completed and signed the Form 8332, attached it to his return, claimed dependency exemptions and child credits for both children and notified the IRS in writing that his ex-wife was inappropriately claiming the children as her dependents.

The court concluded that, for a noncustodial parent to claim a dependency exemption, it is a statutory requirement that a Form 8332 or similar statement signed by both parents be attached to the noncustodial parent's return. Since the form attached to Nixon's return was not signed by his ex-wife, he was not entitled to the dependency exemptions or the child tax credits.

Judge Vasquez concluded his opinion with the following commentary: "We are not unsympathetic to [Nixon's] position. We also realize that the statutory requirements may seem to work harsh results on taxpayers, such as [Nixon], who are current in their child support obligations and who are entitled to claim the dependency exemption deductions or child tax credits under the terms of a child support order. However, we are bound by the statute as written. . . ." (Richard A. Nixon v. Commissioner, TC Memo 2011-249, October 25, 2011)

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