Divorce Decree or Form 8332 - Who's right?

[keithk]

My wife's 20-yr old daughter lives with us full time while attending college. Her father quit paying child support in August of '06 when she turned 18. Apparently we both claimed her for 2007. He produced a signed copy of an 8332 showing the years 2001, 03, 05, 07, 09 & 2011. The divorce decree gives the father the right to "claim the minor child for the years 2001 and in all odd years thereafter, conditioned upon husband being current on his child support obligation, otherwise he forfeits this right to the wife for that year." It sounds like I am out of luck.
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[TinkerBelleLuvr]

From the 8332:

Noncustodial parent. Attach this form or
similar statement to your tax return for
each year you claim the exemption for
the child. You can claim the exemption
only if the other dependency tests in your
tax return instruction booklet are met.

http://www.irs.gov/publications/p501/ar02.html#d0e3180

Qualifying Child
There are five tests that must be met for a child to be your qualifying child. The five tests are:

Relationship,
Age,
Residency,
Support, and
Special test for qualifying child of more than one person.
These tests are explained next.


the daughter will qualify because she was a full-time student between the ages of 19 and 24.

Children of divorced or separated parents. In most cases, because of the residency test, a child of divorced or separated parents is the qualifying child of the custodial parent. However, the child will be treated as the qualifying child of the noncustodial parent if all four of the following statements are true.
The parents:

Are divorced or legally separated under a decree of divorce or separate maintenance,

Are separated under a written separation agreement, or

Lived apart at all times during the last 6 months of the year.

The child received over half of his or her support for the year from the parents.

The child is in the custody of one or both parents for more than half of the year.
Either of the following statements is true.

The custodial parent signs a written declaration, discussed later, that he or she will not claim the child as a dependent for the year, and the noncustodial parent attaches this written declaration to his or her return. (If the decree or agreement went into effect after 1984, see Divorce decree or separation agreement made after 1984, later.)

A pre-1985 decree of divorce or separate maintenance or written separation agreement that applies to 2007 states that the noncustodial parent can claim the child as a dependent, the decree or agreement was not changed after 1984 to say the noncustodial parent cannot claim the child as a dependent, and the noncustodial parent provides at least $600 for the child's support during the year.

From the way it is worded, the "custody" agreement that came with the divorce no longer applies because the child aged out of it. If that is the case, the 8332 would no longer apply.

If it were me in this situation, I would probably take it to the attorney and see if there is the case that "dad" no longer qualifies.

[nextwife]

Is dad paying her tuition, books, school fees, etc? Who is paying those?

[Bali Hai]

Originally Posted by keithk

My wife's 20-yr old daughter lives with us full time while attending college. Her father quit paying child support in August of '06 when she turned 18. Apparently we both claimed her for 2007. He produced a signed copy of an 8332 showing the years 2001, 03, 05, 07, 09 & 2011. The divorce decree gives the father the right to "claim the minor child for the years 2001 and in all odd years thereafter, conditioned upon husband being current on his child support obligation, otherwise he forfeits this right to the wife for that year." It sounds like I am out of luck.
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And just how does it sound to you that YOU are out of luck hind tit sucker???

[LdiJ]

Your wife needs to rescind the form 8332 since her ex no longer pays child support. In the past it was not possible to rescind for 8332. However, new regulations allow that to be done now.

I don't have the details of how to do that at home...its something new. However it now can be done. She will need to rescind it for 2009 and 2011. You and she are probably stuck for 2007, because the ability to rescind a form 8332 was not available for tax year 2007. See a local tax professional.

No matter who would qualify to claim the child under the tax code, if a form 8332 was in effect, that ruled.

[TinkerBelleLuvr]

Question ldij,

If the child aged out of the custody order in 2006, how would dad qualify to USE the 8332 for 2007? The child is no longer a minor - therefore, not in the "custody" of either parent.

[LdiJ]

Originally Posted by Ginny J

Question ldij,

If the child aged out of the custody order in 2006, how would dad qualify to USE the 8332 for 2007? The child is no longer a minor - therefore, not in the "custody" of either parent.

I understand what you are saying, however, prior to the IRS saying that a form 8332 could be rescinded, the form 8332 stood, no matter the circumstances.

Form 8332 is a voluntary form...a voluntary waiver. If the form 8332 stated the specific years that were being waived, then they were waived no matter what the circumstances were. The only exception would be if the two parents combined no longer provided more than 50% of the child's support, therefore either the child, or some other party who was not a party to the form 8332, was the person eligible to claim the child under the tax code.

There is tons of case law on this one...there is even a really famous case that most case law refers to....

Mom and dad divorced. Mom got custody. Mom signed form 8332 for all present and future years. (dad was ordered to pay a very high amount of support) Dad disappeared from the face of the earth for child support purposes and visitation purposes for the remainder of the children's youth. However dad continued to claim the children. It got all the way to tax court, and appealed. The judges acknowledged that it was grossly unfair, but that form 8332 was a waiver and that it stood. So...the IRS gave the exemptions to dad, for all of the years, despite the fact that he provided absolutely no support to the children and in fact was on the run from the CSE.

That is why, in the past, no one should have ever signed form 8332 for more than one year at a time.

However, now, form 8332 can be rescinded so that kind of gross unfairness is no longer possible, and is no longer possible in OP's case.

[TinkerBelleLuvr]

Understand. Stinks, but I'm glad they finally made that change.

[mistoffolees]

Originally Posted by keithk

My wife's 20-yr old daughter lives with us full time while attending college. Her father quit paying child support in August of '06 when she turned 18. Apparently we both claimed her for 2007. He produced a signed copy of an 8332 showing the years 2001, 03, 05, 07, 09 & 2011. The divorce decree gives the father the right to "claim the minor child for the years 2001 and in all odd years thereafter, conditioned upon husband being current on his child support obligation, otherwise he forfeits this right to the wife for that year." It sounds like I am out of luck.
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Aside from Ldij's comment that it may be possible to rescind the 8332, there's a problem with that court order, anyway. The IRS does not recognize contingencies in the dependency. As long as she has signed an 8332, he's going to get the deduction anyway, but without the 8332, it is questionable whether he would get away with claiming the deduction because of the child support clause.

But if she can rescind the 8332, then it shouldn't be an issue.

[LdiJ]

Originally Posted by mistoffolees

Aside from Ldij's comment that it may be possible to rescind the 8332, there's a problem with that court order, anyway. The IRS does not recognize contingencies in the dependency. As long as she has signed an 8332, he's going to get the deduction anyway, but without the 8332, it is questionable whether he would get away with claiming the deduction because of the child support clause.

But if she can rescind the 8332, then it shouldn't be an issue.

Its not a question of "may" be able to rescind the form 8332. Its that now a form 8332 absolutely is allowed to be rescinded.

I apologize for not having the info readily available as to the proceedure to do so.