Tax Court Case: Noncustodial Parent Loses Dependency Exemption

Note: this post is from 2011. However, the information contained in it is important and has not changed. It is vital for a noncustodial parent to attach Form 8332 to their tax return. The IRS doesn’t care about your divorce decree, they care about the form. (10/15/21)

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A recent Tax Court case serves as a good reminder for noncustodial parents to make sure proper IRS procedures are followed when filing tax returns, or else the noncustodial parent could lose the right to claim the kids as dependents.

The case involved a Mr. Briscoe, who was involved in a divorce in 2002 in which his wife got sole custody of their one child.  In 2006, a court increased Mr. Briscoe’s child support obligation but also granted him the right to claim the dependency exemption for the child on his tax return.  Unfortunately for Mr. Briscoe, he did not completely follow IRS procedures when filing his 2007 tax return, and the IRS denied the dependency exemption and the child tax credit.

In cases where a noncustodial parent is claiming a dependency exemption, the noncustodial parent must file Form 8332 or its equivalent.  From the Court ruling:

Form 8332 requires a taxpayer to furnish: (1) The name of the child; (2) the name and Social Security number of the noncustodial parent claiming the dependency exemption deduction; (3) the Social Security number of the custodial parent; (4) the signature of the custodial parent; (5) the date of the custodial parent’s signature; and (6) the year(s) for which the claims were released.

It is okay to file other documents instead of Form 8332, but the documents must provide the same information as Form 8332 provides.  In Mr. Briscoe’s case, he attached the support order to his tax return, but that order did not include the years the order applies, or provide the ex-wife’s Social Security Number.  Because of that, the Tax Court sided with the IRS.

In its ruling, the Court said it felt for Mr. Briscoe, because he has dutifly made child-support payments and has a right under the support document to claim the child as a dependent.  But the Court says it has to follow the Internal Revenue Code and Treasury Regulations as written:

We are not unsympathetic to (Briscoe’s) position.  We also realize that the statutory requirements may seem to work harsh results to taxpayers, such as Mr. Briscoe, 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 and the accompanying regulations when consistent therewith.