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  1. #1
    Join Date
    Apr 2009
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    5

    Default New 2009 Tax Law for Dependent Exemption

    Hello,

    I have a situation where my ex is to get to claim our daughter as an exemption in "odd" years and I am to claim her in "even" years. My daughter is now 17 and pregnant and living with me full time. Her father has basically written her off and not providing ANY support. He is not paying 1/2 of out of pocket expenses for medical costs (non-materinity) or buying clothes. We have a 50/50 joint custody with me being the primary custodian. So, since the beginning of April she has lived with me full time and me paying all her expenses with no support. I have told her father I should get to claim the exemption this year, but he is so stingy and greedy he doesn't care. I would go to an attorney, but attorney's are SO expensive and I'd probably pay more than I'd benefit. I have read conflicting info. on what the IRS will do WHEN (not if) we both claim her (and I will be claiming her child also). Some info. I've read that they will ignore the divorce decree (MSA) and use the rules for which make her my qualifying child. I clearly meet ALL of the guidelines for claiming her with the exception of the divorce decree. All it states is that we are to alternate years with him having odd and me having even. I am just hosed here or do I have a leg to stand on? Thanks for your input!

  2. #2
    Join Date
    Jul 2007
    Location
    Florida
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    Default Re: New 2009 Tax Law for Dependent Exemption

    The matter was settled when you and your ex-husband signed off on the terms of your divorce settlement. If the divorce decree gives him unconditional right to claim the exemption then your husband is required to send a copy of the pages of the divorce decree to the IRS that allow him to claim the exemption. He does not need a signed form 8332 from you if the divorce occurred prior to 2009.

    If you both claim the child then the IRS will process your returns but will send a letter to each of you explaining the rules. They will include a form 1040X and instruct the party not entitled to the exemption to amend their return. If neither party responds then they start digging more vigorously. Eventually one or the other person has to give up the exemption, and if the divorce gives it to him then you would be the one to repay the excess refund.

  3. #3
    Join Date
    Oct 2006
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    16,474

    Default Re: New 2009 Tax Law for Dependent Exemption

    Quote Quoting newgrammy
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    Hello,

    I have a situation where my ex is to get to claim our daughter as an exemption in "odd" years and I am to claim her in "even" years. My daughter is now 17 and pregnant and living with me full time. Her father has basically written her off and not providing ANY support. He is not paying 1/2 of out of pocket expenses for medical costs (non-materinity) or buying clothes. We have a 50/50 joint custody with me being the primary custodian. So, since the beginning of April she has lived with me full time and me paying all her expenses with no support. I have told her father I should get to claim the exemption this year, but he is so stingy and greedy he doesn't care. I would go to an attorney, but attorney's are SO expensive and I'd probably pay more than I'd benefit. I have read conflicting info. on what the IRS will do WHEN (not if) we both claim her (and I will be claiming her child also). Some info. I've read that they will ignore the divorce decree (MSA) and use the rules for which make her my qualifying child. I clearly meet ALL of the guidelines for claiming her with the exception of the divorce decree. All it states is that we are to alternate years with him having odd and me having even. I am just hosed here or do I have a leg to stand on? Thanks for your input!
    I disagree with the other response that you received. If you can prove that the child resided exclusively with you for more than 6 months of the year, the IRS will side with you, despite what the divorce decree states.

    However, your real problem will be with the state court, because you would be violating the decree and would therefore be in contempt.

    I suggest that you file for contempt for your ex not contributing to the expenses he is required to contribute for, ask for sole physical custody and child support, and ask for the right to claim the tax exemption since he is not currently providing any support to the child.

    You do not have to hire an attorney to do this, you can do it on your own. Forms and instructions are often available at your local courthouse, or online on your state government website.

  4. #4
    Join Date
    Jul 2007
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    Florida
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    Default Re: New 2009 Tax Law for Dependent Exemption

    Please see IRS Pub. 17 - http://www.irs.gov/pub/irs-pdf/p17.pdf - page 27 under the heading "Children of Divorced or Separated Parents" at the bottom of column 3. That should clarify the matter for everyone. If all of the conditions specified are met then the child will be the qualifying child of the non-custodial parent regardless of how much or how little time the child spent with that parent. The IRS will absolutely honor the order of the divorce judge under state law and they say so in the most basic of their publications, Pub. 17.

    The OP mentions 50-50 custody. In such cases it would not be customary for child support to have been ordered since each parent would bear half the support cost based on custody. You would need to go to court if you would like to change that status of that. If support was ordered and is not being paid then that is another matter.

  5. #5
    Join Date
    Oct 2006
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    16,474

    Default Re: New 2009 Tax Law for Dependent Exemption

    Quote Quoting Bubba Jimmy
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    Please see IRS Pub. 17 - http://www.irs.gov/pub/irs-pdf/p17.pdf - page 27 under the heading "Children of Divorced or Separated Parents" at the bottom of column 3. That should clarify the matter for everyone. If all of the conditions specified are met then the child will be the qualifying child of the non-custodial parent regardless of how much or how little time the child spent with that parent. The IRS will absolutely honor the order of the divorce judge under state law and they say so in the most basic of their publications, Pub. 17.
    Only if the decree meets the qualifications to substitute for form 8332...and very few do. In a case like this one, where no child support is paid there is almost no chance that there isn't something in the decree that would disqualify it from being a substitute form 8332. The IRS is rejecting divorce decrees in large numbers....otherwise the large number of our clients who have to take their ex's back to court for contempt (to get the state court judge to remedy the matter) wouldn't need to do so.

    The OP mentions 50-50 custody. In such cases it would not be customary for child support to have been ordered since each parent would bear half the support cost based on custody. You would need to go to court if you would like to change that status of that. If support was ordered and is not being paid then that is another matter.[/QUOTE]

    The bolded truly is wrong. In a 50/50 situation some child support is still customarily paid. Generally by the parent with the higher income. However even if their incomes are identical child support is often paid, because one parent is paying the health insurance and/or daycare and those factor into child support calculations in most states. Its actually a bit rare for no child support to be paid unless the parents specifically agreed to that.

  6. #6
    Join Date
    Jul 2007
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    Florida
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    Default Re: New 2009 Tax Law for Dependent Exemption

    Only if the decree meets the qualifications to substitute for form 8332...and very few do.
    This is very basic information that is covered in a basic tax preparation class. I have taught these for more than 20 years. However, I do not tell people to believe me because there is no way for them to know anything about me. Therefore, I post a link to authoritative IRS publications that describe very specifically how this works. And when you follow their instructions and publications it works just the way they say it works.

    Now, would you kindly post some link to any supporting statment anywhere in the IRS' vast library of publications or instructions that supports what I've quoted above? A divorce decree does not substitute for form 8332. If it gives one spouse unconditional rights to the exemption, then they claim it. If there are conditions then 8332 is needed. I have seen and successfully filed with copies of the divorce decree submitted with form 8453 countless times. Rather than getting into one of these countless "I'm right because of the company I work for" arguments, please just support these things you claim I'm wrong about with something besides your say-so. Otherwise, it's just confusing to people as they consider your incorrect information.

  7. #7
    Join Date
    Oct 2006
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    16,474

    Default Re: New 2009 Tax Law for Dependent Exemption

    Quote Quoting Bubba Jimmy
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    This is very basic information that is covered in a basic tax preparation class. I have taught these for more than 20 years. However, I do not tell people to believe me because there is no way for them to know anything about me. Therefore, I post a link to authoritative IRS publications that describe very specifically how this works. And when you follow their instructions and publications it works just the way they say it works.

    Now, would you kindly post some link to any supporting statment anywhere in the IRS' vast library of publications or instructions that supports what I've quoted above? A divorce decree does not substitute for form 8332. If it gives one spouse unconditional rights to the exemption, then they claim it. If there are conditions then 8332 is needed. I have seen and successfully filed with copies of the divorce decree submitted with form 8453 countless times. Rather than getting into one of these countless "I'm right because of the company I work for" arguments, please just support these things you claim I'm wrong about with something besides your say-so. Otherwise, it's just confusing to people as they consider your incorrect information.
    For tax year 2005 (I believe, it may have been 2006) the IRS issued guidelines that a for 8332 or something that substituted as its equivalent was needed in order for a non-custodial parent, (by the IRS's definition of non-custodial parent, not a divorce decree's) needed to be signed in order for the non-custodial parent to claim the tax exemption. The IRS specifically stated that they would not accept divorce decrees unless they met the criteria to substitute for form 8332.

    The IRS's actions since that date have backed up that position.

    The instructions on form 8332 clearly state that a divorce decree may be used if it meets certain specific criteria, including being non-conditional. However, being non-conditional is not the only criteria. You are focusing on the non-conditional aspect as if that's the only criteria.

    For 2009, their position has again changed. They will now not accept a divorce decree at all (with some grandfathering). It must be a form 8332 or a separate declaration other than a divorce decree.

    I have been taught, in my masters classes, and in my continuing education, that a tax professional does not rely on IRS publications as they are not "authority". I have been taught that a tax professional relies on the code, the regs, and the ongoing guidence regularly issued by the IRS.

    The annual IRS continuing education seminars, as well as tax organization's (such as NATP) have been heavily addressing these issues since 2005.

    However, the biggest point I have to make here, is that the custodial parent is defined by the IRS rules, not what is stated on a divorce decree. A divorce decree may state (for example) that a father is the non-custodial parent, but since then the child is living primarily with the father making HIM the custodial parent under the IRS's rules. In that instance the divorce decree becomes irrelevant.

    In this thread, the divorce decree has become irrelevant as the living situation for the child has changed.

    It is sometimes frustrating to have a discussion with you because you rely so heavily on the pubs and completely discount the guidence that is being given in the field...and what actually results when the IRS challenges a return.

    Unless you can actually see someone's divorce decree, you cannot state that it qualifies to be used instead of a form 8332, simply because it has no conditions...and I am telling you right now, based on actual experience, that FEW qualify.

  8. #8
    Join Date
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    Florida
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    Default Re: New 2009 Tax Law for Dependent Exemption

    As I suspected, you cannot point to any external source for the information you say is true. That is how people get bad advice that costs them.

    Did you even bother to read page 27 and 28 of Pub. 17? You could not possibly have read it because it is black and white. If the IRS states what I say in their official publications then I'll stand behind that. I have no experience with the IRS instructing one thing, and then doing the opposite "in the field" as you put it. I'd spend all my time in tax court if that was how they did it.

    I don't mean to frustrated you, but when I give people advice that is straight from the IRS instructions it frustrates me when you find it necessary to repeately challenge and tell me I'm wrong with nothing you can point to that proves your point. I'm here to learn as much as anyone, but I can't accept what you say just because you say it and I don't ask my clients to accept the advice I give them just because I say it. I show them in the books, print it out, highlight it, and do what ever I need to so they know they're getting the best possible advice. And I warn them about tax professionals who pretend to know everything but can't show you any of it in writing.

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