Hi Snipes,
my questions are tax related. Please see IRS tax code below, and my comments...this is from Publication 504. We have both claimed the same dependant in the last 2 tax years, so far the IRS has audited him, and only sent me a notification letter. The have taken the exemption away from him, only based (I think) on the fact that I didn't fill out the 8332 (Release of Claim to Exemption for Child of Divorced or Separated Parents).
http://www.irs.gov/publications/p504/ar02.html#d0e1130
Support test for child of divorced or separated parents:
Noncustodial parent. Under the special rule, the parent who did not have custody, or who had it for the shorter time, is the noncustodial parent. The noncustodial parent is treated as the parent who provided more than half of the child's support if any one of the following three conditions is met.
1) The custodial parent signs a written declaration that he or she will not claim the exemption for the child, and the noncustodial parent attaches this written declaration to his or her return.
Although it states in our support order that NCP is entitled to claim 1 child, I never signed a declaration, only the judge signed our support order & divorce decrees.
2) The custodial parent signed a decree or agreement executed after 1984 that states that the custodial parent will not claim the exemption for the tax year, and the noncustodial parent attaches the appropriate documentation to his or her return.
I've never signed anything like this.
3) A decree or agreement executed before 1985 provides that the noncustodial parent is entitled to the exemption, and he or she gave at least $600 for the child's support during the year. This is true unless the pre-1985 decree or agreement was modified after 1984 to specify that this provision will not apply.
This was executed after 1985.
I think the NCP is not entitled to make the claim based on any of the above clauses, as they seem to not apply in our situation.
Then this is the other code I found on the topic:
Divorce decree or separation agreement made after 1984:
If your divorce decree or separation agreement was executed after 1984, you do not have to attach Form 8332 or a similar statement if both of the following requirements are met.
1) The decree or agreement states
all of the following.
a) The custodial parent will not claim the child as a dependent.
b) The noncustodial parent can claim the child as a dependent without regard to any condition, such as payment of support.
c) The years for which the noncustodial parent can claim the child as a dependent.
2) The noncustodial parent attaches a copy of the following pages of the decree or agreement to his or her tax return for the tax year.
a) The cover page (write the other parent's social security number on this page).
b) The pages that contain the information shown in item (1).
c) The signature page with the other parent's signature and the date of the agreement.
Now, under this code, our support order is vague in regard to items 1a & 1b, the order just states he can claim our younger son, it doesn't say that I can't, and doesn't specify that "NCP can claim without regard to any condition." However, no conditions are listed in our order.
Item 1c is missing altogether in our support order.
Item 2c does not exist, because only the judge signed our support & divorce orders, neither of us were asked to sign anything.
The money I just received was sent by NCP (under duress by judge in a contempt hearing) to NYS CSE, and they cut a check to me...if I understand your post correctly, you think I need to take it up with CSE, on whether the $2000 I received is considered support for tax year 2005, or whether it is back support for 2003, the first year NCP accrued arrearages, and we are still at $0 support for tax year 2003. Well, my experience with CSE is that everyone is clueless about everything, and on their payments website, they just keep a running total of what is owed, and what has been paid, they don't "apply" it to a specific timeframe...so I am not sure they would consider first funds in to be applied to first arrears accrued, or if the first funds received would be applied to the most recent payments owed, and then go backward for previous payments.
As far as IRS tax law/code is concerned, and the appropriateness of CP in claiming or not claiming a dependant exemption in a non-support paying NCP situation, shouldn't there be a consistent approach on the IRS's part when the divorced parents court orders don't specifically spell out the items required by the codes above?
I have no problem with NCP taking an exemption for one child, if he pays the support as ordered...but its been almost 3 years, and this is the first payment I've received. NCP will never make another payment unless he is dragged into court and feels the judge might actually take action if he doesn't dish out some money. Since the 4 prevous hearings, and the $2000 was paid, we are now awaiting a follow-up payment report hearing to ensure he keeps paying...I know at some point the judge will close out the contempt action, if NCP "promises" to continue paying, at which point I am confident he will stop until we go back to court again.
I feel if this is the cycle we must continue to go through, NCP shouldn't be entitled to claim an exemption unless he is caught up for the year on support. However, I know there is likely a difference between what I feel is fair, and how the IRS will interpret it. The IRS code seems incomplete in this area (or I don't know where to look?), and this must happen all the time, with divorced parents both making a claim for the same dependant. If I can take the exemption for 2005, based on NCP's large outstanding arrears, I want to, if it is illegal because NCP did make a payment, I obviously don't want to.
Thank you for anymore information you or others can provide, or places for me to look to see how the IRS handles these situations.
