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Marital Dissolution Services Advisory - Revocation of Child Tax Exemption

Tuesday, July 07, 2009 - Tami Clemenza-Wilson, CPA/CFF, M.S.T.

Tami Clemenza-Wilson

In a Chief Counsel Advice (CCA) 200925041, the IRS has clarified that a divorce decree that allows a noncustodial parent to claim an exemption for a child only if a condition is met does not conform to the substance of IRS Form 8332 “Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent”, and cannot be used by a noncustodial parent to substantiate a dependency exemption for a child.

For tax years beginning after July 2, 2008, a custodial parent's release of a claim to exemption for a child must be separate from a court decree. The release must be on Form 8332 or must be a document that conforms to the substance of Form 8332 and that has as its only purpose the release of a claim to exemption.

For tax years before July 2, 2008, a noncustodial parent may attach pages of a divorce decree executed on or before July 2, 2008, that “unconditionally” allows the noncustodial parent to claim an exemption for a child, if the pages constitute a statement substantially similar to Form 8332 under the requirements in effect at the time the decree or agreement was executed.

The Advice will lead to a decrease in the number of tax filings in which divorce decrees are used as the only document in claiming a noncustodial exemption.

If you have additional questions about IRS requirements for noncustodial tax exemptions, do not hesitate to contact us at (954) 760-9000. Also, if there's a topic of interest you'd like covered in a future newsletter or advisory, please let us know.