Should I ask court for help now?

What is the name of your state? FL

I have had my son since June 15th, but court orders only date back to July 5th (less than 6 months for 2007 taxes). My Ex's parents have said they are going to claim my son on their Tax Return, but My Ex and I have a court ordered settlement agreement for custody which says that "the Father is entitled to claim the child as a dependent..."
I guess what I need to do is go to court to ask the judge to order her to sign the IRS Form which clears me to include my son as a dependent. The problem is the timing. I want to go to court now to start the process because it will take some time for it to go through. Do you think I can petition now, or must I wait until 2007 is over. If I wait, then they will go ahead and file, and I'm afraid I may end up in court for years on this issue. Also, I need the return money. I am paying for 100% of Daycare, had to cut back at work to take care of the child (20 months old), and still have to pay her $250/ month just so she can have some money for when she has visitation.
I already heard from the IRS that my settlement is no good with them without the special release form signed by her, because it does not say "unconditionally."

Go into court now. Better to have the 8332 in hand, than to fight for the refund money later.

and why are the grandparents claiming the child anyway???

CourtClerk said:

Go into court now. Better to have the 8332 in hand, than to fight for the refund money later.

and why are the grandparents claiming the child anyway???

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Most likely because mom and the child were living with the grandparents and being supported by the grandparents. If they provided more than 50% of the child's support, it would be totally legitimate for them to take the exemption under federal tax law.

Remember, mom and dad only get to divy up the exemption between themselves, if they, combined, provided more than 50% of the child's support.

LdiJ said:

Most likely because mom and the child were living with the grandparents and being supported by the grandparents. If they provided more than 50% of the child's support, it would be totally legitimate for them to take the exemption under federal tax law.

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My mind doesn't always grasp being able to have a child, but needing a third party to help pay for it... thanks for the reality check.

Actually, what the IRS should have said is that the court custody decreee is no good with them. The IRS defines custodial parent as the parent in whose house the child slept more. This is important because the law states that the custodial parent gets to claim the kid & (maybe) file as head of household. The law also states that the noncistodial parent can only claim the kid if the CP releases the exemption by signing Form 8332 or equivalent & the parents between them provided over half the kid's support.

So, the first question is, who was the custodial parent? If your son spend over half the year with you, you get to claim him, period. You need to add up all the overnight visitation from Jan-June and all the nights you had him after June 15. If it's more than 183, you win. You'd file your return as custodial parent & indicate that your son lived with you 7 months during 2007. You should also start assembling your proof now -- day care records indicating the address change in June would be ideal. If you can't get that, then try to at least get the court to put something into the court orders indicating that you took your son on June 15 even though the court order officially changing custody is dated July 5. If that won't happen, you could see if you made any notes throughout the year on your calendar or day planner about picking up & dropping off the kid.

As a practical matter, you might want to file ASAP as the custodial parent without itemizing, then amend your return when you get your other deduction information.

As for the grandparents claiming the boy, they could only legally do that if he lived in their house over half the year, not including nights he was visiting you. You didn't specify whether the mother is living with her parents or not, so I can't say if this is an issue. At any rate, if the court decree is unconditional, & she signed it (not her attorney), the decree can substitute for the 8332 & you get to claim the kid whether he lived with you over half the year or not. The decree is unconditional if it does not include language like "provided the father is current in his child support as of 12/31."

Good luck.

abezon said:

As for the grandparents claiming the boy, they could only legally do that if he lived in their house over half the year, not including nights he was visiting you. You didn't specify whether the mother is living with her parents or not, so I can't say if this is an issue. At any rate, if the court decree is unconditional, & she signed it (not her attorney), the decree can substitute for the 8332 & you get to claim the kid whether he lived with you over half the year or not. The decree is unconditional if it does not include language like "provided the father is current in his child support as of 12/31."

Good luck.

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Good point Abezon, the decree does not have to state specifically that it is unconditional, it simply has to not have any language that makes it conditional....and must have the signature of both parents.

OP, you should go to irs.gov and look at the instructions for form 8332. That outlines the exact requirements for a court order to substitute for a form 8332.

THank-you for all of the help

During the 5.5 months my son was with the Granparents and his mother (they did live together) I paid child support. None of them work, so they had the child put on state assistance for food stamps and medical before our court settlement, and the judge allowed that to remain. The only substantial "support" they could claim is the Fair market rental + utilities and misc. expenses for that time. The rental would have to be $5000/month divided by 5 people to equal my support + rent, etc.. So I don't think they could claim that they paid over half his support.

The settlement says that "The Father is entitled to claim the child as a dependent each year until such time as the Mother becomes employed Full time. At that time the Mother will be entitled to claim the child as a dependent the first year, and the Father and Mother will alternate each subsequent year the Mother remains Full time employed." Would it be OK to use the settlement instead of having her file the Form? Or, is this too conditional for me to use?

I am still worried about whether or not I am custodial. I spoke on the phone with an IRS help agent who told me that because we have a Court Instrument (the settlement) which states that my ex is the Primary Residential Parent, and My first Court Order is not until July 5th, that this makes her Custodial more than half of the year- regardless of whether or not the child was with me longer. He said that Court instruments superceed IRS rules. I have read the IRS rules which state that the Custodial parent is the parent with which the child lived with more than half of the year. So, this seems wrong to me. But I worry about this because I don't think I can claim the Daycare credit if I am not found to be custodial.

Did you say I can go ahead and file a 2007 return now? Or were you saying I could file January 2nd, and then amend the details later. This would be good becasue then I guess I could serve a copy on them with a notice that they should be aware that they are not entitiled to claim the child.

All For Him said:

THank-you for all of the help

During the 5.5 months my son was with the Granparents and his mother (they did live together) I paid child support. None of them work, so they had the child put on state assistance for food stamps and medical before our court settlement, and the judge allowed that to remain. The only substantial "support" they could claim is the Fair market rental + utilities and misc. expenses for that time. The rental would have to be $5000/month divided by 5 people to equal my support + rent, etc.. So I don't think they could claim that they paid over half his support.

The settlement says that "The Father is entitled to claim the child as a dependent each year until such time as the Mother becomes employed Full time. At that time the Mother will be entitled to claim the child as a dependent the first year, and the Father and Mother will alternate each subsequent year the Mother remains Full time employed." Would it be OK to use the settlement instead of having her file the Form? Or, is this too conditional for me to use?

I am still worried about whether or not I am custodial. I spoke on the phone with an IRS help agent who told me that because we have a Court Instrument (the settlement) which states that my ex is the Primary Residential Parent, and My first Court Order is not until July 5th, that this makes her Custodial more than half of the year- regardless of whether or not the child was with me longer. He said that Court instruments superceed IRS rules. I have read the IRS rules which state that the Custodial parent is the parent with which the child lived with more than half of the year. So, this seems wrong to me. But I worry about this because I don't think I can claim the Daycare credit if I am not found to be custodial.

Did you say I can go ahead and file a 2007 return now? Or were you saying I could file January 2nd, and then amend the details later. This would be good becasue then I guess I could serve a copy on them with a notice that they should be aware that they are not entitiled to claim the child.

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Your settlement is definitely "conditional" therefore it does NOT substitute for a form 8332.

However, it also appears that you could legitimately claim that the child lived with you for more than 50% of the year, particularly if you had regular overnight visitation with the child prior to assuming custody. If that is the case, you don't need a form 8332.

However, I will point out that the grandparents must have taxable income, or they wouldn't be trying to claim the exemption for the child. If they have income, then the may have provided for the child monetarily as well as providing a home for the child.

Odds are however, that you provided more than 50% yourself.

OP - you cannot file your taxes until January 2008 for the year 2007. I might suggest that you file your taxes as soon as you get your W-2s. Now, the grandparents may not 'work', but chances are that they may have taxable income.

Since mom agreed that you should have the dependency for taxes, then chances are that she will agree to give you an 8332 for the tax year 2007. The problem with that is that an NCP is NOT allowed to take dependent care credit from their taxes. This is why it becomes really important to show that you've had more overnights (183+) for tax year 2007.

Instructions for who qualifies for Form 2441:
http://www.irs.gov/publications/p503/ar02.html#d0e226

Directly from Publication 501:
http://www.irs.gov/publications/p501/ar02.html#d0e3591

Custodial parent and noncustodial parent. The custodial parent is the parent with whom the child lived for the greater part of the year. The other parent is the noncustodial parent.

If the parents divorced or separated during the year and the child lived with both parents before the separation, the custodial parent is the one with whom the child lived for the greater part of the rest of the year

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This is all from publication 501 from the IRS:

Support provided by the state (welfare, food stamps, housing, etc.). Benefits provided by the state to a needy person generally are considered support provided by the state. However, payments based on the needs of the recipient will not be considered as used entirely for that person's support if it is shown that part of the payments were not used for that purpose.

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Parents who never married. This special rule for divorced or separated parents also applies to parents who never married.

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IF more than one person files a return claiming the same qualifying child and . . .only one of the persons is the child's parent, THEN the child will be treated as the qualifying child of the. . .parent

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VERY important to have the 183+ days. This does include your days from January 1 thru June 15.

Thank-you. I hope the IRS help agent was wrong about the custody issue, and that the IRS rules stating - many times over - that the parent with whom the child lived with more is the custodial parent, are correct. I would definately be that person. I had 20 overnights before June 15th. I also have as evidence text message conversations regarding daycare arrangements between her and I from June.

Now I guess the question is should I pursue the form 8332 anyway, just in case? I understand it is not needed if I am the custodial parent, but I'm still not 100% - just because of what that one agent told me. Would I file as custodial, and include form 8332 with a letter explaining that it was included just for "good measure?"

All For Him said:

Thank-you. I hope the IRS help agent was wrong about the custody issue, and that the IRS rules stating - many times over - that the parent with whom the child lived with more is the custodial parent, are correct. I would definately be that person. I had 20 overnights before June 15th. I also have as evidence text message conversations regarding daycare arrangements between her and I from June.

Now I guess the question is should I pursue the form 8332 anyway, just in case? I understand it is not needed if I am the custodial parent, but I'm still not 100% - just because of what that one agent told me. Would I file as custodial, and include form 8332 with a letter explaining that it was included just for "good measure?"

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Does mom have visitation? Remember, any overnight visits that she has also have to be taken into consideration in calculating how many days you have. If you can come up with any kind of proof at all that you have had the child since mid June, plus the visitation you had prior to mid June, that would really help you.

I would not advise you to file a Form 8332 if you are taking the position that your son lived with you over half the year. Instead, you'll file as head of household (probably) & put in your paperwork that he lived with you 7 months in 2007. As LdiJ alluded, start gathering your evidence of custody right now. A statement from the boy's mother would be very helpful.

I have a DCF Report from when her parents called for help with the whole situation. The investigator notes that the child is safe since he is residing with the Father, and it is dated June 24th. This should give me enough evidence. I guess everything will be OK. Thanks for the help. I'm still pressing her for the form 8332 though, just to make sure her Parents don't try to claim him. If she releases this right to me, she shouldn't also be releasing the right to her Parents, right? If they still try to claim that they had him, and file with him as a dependant, they would have to have this form from her to do so. Correct?

I'm still dubious about the IRS help agent. However, I think I have a way to overcome his argument that Court Instruments ( our settlement, and the July 5th Order changing custody ) superceed IRS rules. He was arguing that our settlement gave her custodial status through the next court order of July 5th, which gave her more than half of the year. But that same settlement also gave me 2 overnights every other weekend during the first half of the year. Do you think this would satisfy his argument?

Geez. The amount of time I spend worrying about all of these issues, making phone calls, looking up forms, going to court... It's like a second job. And this is going to go on for 16 more years. I guess I should ask the Family court judge to address and clarify the tax issues for future years so that we don't have to go through this every year.

The IRS agent you spoke to was just plain wrong. S/he either hadn't completed training or works in some other division usually & was stuck answering phones that day.

An 8332 would not let the grandparents claim your son. They can only claim him if he resided with them over half the year. Support is irrelevant for them.