Tax Dependent

[nurs0684]

My question involves a child custody case from the State of: MN
My custody orders are outdated, early 2000's. that states we have 50/50 everything, no child support ordered for either party, and we get every other year tax exception. Since 2008, I have child 85% of the year, receive no support from other parent, I still have been doing the every other year tax deduction, and since 2008, every other year on my years to claim child I received an audit from IRS and just finished providing my paperwork from school, dr's, insurance, employers, that I am the custodial parent and have right to claim child. The IRS agents have told me under Federal law I have the sole right to claim the child every year if what I have said is true. So my question is can I do this even though our court order says otherwise. IRS says yes because circumstances of custody has changed and no support is given to me. Also, you should know the reason I got an audit for these years is because my ex who has child 15% of the time has claimed child every year and got the deduction first. So I am sure she will receive notification from IRS that she is in trouble of some sort, etc. Any advice for me? She could file for contempt of court, but she is also in contempt due the every year filing already?

[Bubba Jimmy]

As you have perceived, you have both a tax and a legal issue. Yes, you (or your lawyer) could ask the court to find her in contempt is she is in violation of the order that you take the dependent exemption in alternating years. When two people claim the same dependent and neither one amends their return to remove it, then the IRS sends both people the same audit request for documents so they can make a correct determination. This is likely getting expensive for her.

If the original order for alternating years is unchanged and it is unconditional (i.e. it is not dependent on being current with child support, etc.) then both parties have to abide by that order until it is amended regardless of circumstances.

You did not state what your income level is, but in years when you cannot claim the exemption (and therefore the Child Tax Credit) you would still be entitled to the Earned Income Credit, Child and Dependent Care credits, etc. because they are only available to the custodial parent and are independent of whether the exemption is being claimed or not.

[nurs0684]

Oh boy are we going to have problems. According to the IRS agent that I have spoke to, they do not care what the court ordered document states, they go by the tax rules that they have listed. It is up to the parties involved to go to court during a case where contempt is taking place. I do plan on doing the every other year until I bring her back to court for a modification, but the problem is she has been claiming her on the wrong years since 2001. She was suppose to do the even but got going on the odd, and stupid me allowed the switch with no court order modification. So in reality we have both filed on the wrong year, until she decided that in 2007 she would start claiming her every year. So now we are in a big mess because she wont' stop, and she continues to deny me when I ask her if she is doing it. "I didn't claim her, it's your year" But she will tell me that every year...and then the next time you talk to her she will say "I claim even you claim odd" So I asked her it's 2011 so you didn't claim her and she said..:"no, I did claim her it's my year" and I will say "well it's odd the last time you talked you said you claim her in even, so which one is it even or odd?" and she said "odd". So yeah, she isn't even paying attention anymore. So I will be asking for modification of our entire court order because I don't want to go through this anymore.

[Bubba Jimmy]

I have a hard time believing even the most incompetent IRS agent said such a thing, but let me give you one piece of information. The advice you receive from IRS customer service people (who are not agents) is worth about what you pay for it. The same is true of the advice I offered, so why not do yourself a favor and consult with a knowledgable tax person in your own town?

But just so you know, for a pre-2009 divorce agreement, the IRS will absolutely accept the unconditional order that gives a non-custodial parent the dependent exemption. If there are conditions, such as "so long as party A is current on child support payments" then all bets are off and you need the ex to sign form 8332 releasing their claim. For 2009 and after you need that form signed regardless, and if the other person won't sign then you ask a judge to find them in contempt.