The very first article is the a non-custodial parent claiming a qualifying child as a dependent. To me, it reads just as I always understood the IRS' position to be, i.e., don't waste our time with Court Orders; attach an 8332 or forget about.
But now there is a revocation of an 8332. I am wondering if the custodial parent is required by Court Order to issue an 8332 covering a 12 year period, can the custodial parent simply issue a revocation at will? If so, what's the value of an 8332 in a property settlement?
I'm not sure what you mean by your question as I have never seen a dependency exemption treated as property in division of marital property incident to a divorce.
As to state court orders.... federal tax law has trumped them many times.
Lastly, let's not forget that US Treasury Regulations are the federal government's interpretation of the US Code. They don't always stand up to federal court scrutiny.
But I have seen divorcing parents negotiate over it separate and apart from the actual custody arrangement.
Yes, but not always. Basically it depends on whether federal law is creating rules based on definitions in state law (e.g. definition of community property), or it is creating the underlying rule itself (e.g. ERISA).
Right. The courts presume them to be correct unless it is shown that they either conflict with the statutes or cover things not authorized by the statute.
I noticed that Stuart and I didn't address the question about revocation.
The summary of the final regulation and the final regulation are quite clear that the custodial parent can revoke a release by signing a new 8332. The summary also has a reminder that state courts can't allocate an exemption because sections 151 and 152 of Title 26 determines who can claim an exemption. It is also clear that the writers of the final reg considered this issue before publication. Therefore, I must conclude that a custodial parent may revoke an 8332 release at any time. If there is a state court order, then I must presume (hey attorneys... step in here) that the noncustodial parent must seek relief in some other form from the courts.
If I were an attorney (I am not) representing the parent who was going to become the parent with the fewest number of nights of custody (noncustodial parent) and there was agreement that my client was to unconditionally claim the exemption for the child until the child reached the age of majority, I would have the signed 8332 for all years made part of the divorce. To address the issue of revocation, (hey attorneys... step in here) I suppose one could build into the divorce or separation agreement, some form of sanctions should the custodial parent revoke the
I'm not an attorney either but want to point out that some states, e.g., Alaska (AS 25.24.232 - Children as Dependents For Tax Purposes), forbid their courts to approve divorce decrees that unconditionally award dependency exemptions to the noncustodial parent.
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The Alaska statute generally conditions the noncustodial parent's entitlement to claim a dependency exemption on him or her being current on child support. I suppose the custodial parent still could waive the exemption on a multiple-year Form 8332, but it would not be possible under state law to incorporate an unconditional, multi-year exemption entitlement for the noncustodial parent into the divorce decree.
I don't know how many states have divorce statutes similar to Alaska's but there must be others.
One option, it seems to me, would be a court award, subject to revocation with court approval upon a showing that the non-custodial parent was behind in child support. That kind of thing is probably a good idea in the other states, too.
Another would be for an order of the Court stating that revocation without prior approval from the Court will result in specific sanctions including arrest for contempt of Court.
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