Court Ordered Exemptions and the IRS

Gavel On Sounding Block

 

I have to start with the disclaimer first: I’m an enrolled agent, I’m licensed by the Department of Treasury to represent persons before the IRS. I am not an attorney. According to the rules of my license, I am not allowed to give legal advice. But I get to talk about taxes until I’m blue in the face!

Why the disclaimer? Because if you’re a divorced parent, you may have to deal with a court order that outlines who can claim your child’s tax exemption. But the IRS has its own rules about who may claim a child’s exemption, and sometimes the courts and the IRS don’t agree.

Here are the IRS rules:

  • If your divorce decree went into effect after 1984 and before 2009, the noncustodial parent may be able to attach certain pages from the decree to the tax return to claim the exemption as long as the decree has no conditions (like paying child support) instead of requiring the custodial parent to sign a form 8332 (release of exemption).
  • If the divorce decree or separation agreement is after 2008, then the custodial parent must sign a form 8332 for the noncustodial parent to claim an exemption.

Can see how this can be tricky? If you don’t sign the 8332 form , and your ex doesn’t have the proper divorce decree documents, then your ex doesn’t get the exemption as far as the IRS is concerned. You’re going to win this one on the IRS battlefield. You may have to take it to the battlefield, but if you do then you will win.

But what does a person do when there’s a court order for her spouse to claim the exemption on the children, but the husband has no right to claim the children as far as the IRS rules are concerned? What do you do if a local judge says, “You’ve got to let your ex husband claim your children for taxes? I order you to sign the 8332 form.”

I spoke with a local attorney about what could happen to a person who followed the strict IRS rules and claimed the children’s exemptions for herself when the divorce decree allowed the spouse to claim – the answer I got was to have the person call her attorney. You see, the IRS rules are all about how the IRS will settle the issue. I’m an expert at how the IRS will settle the issue. But if you’re dealing with a court order, and if your ex decides to take you back to court to enforce the exemption rule, and you defy a court order to allow him to claim the exemption, then it’s quite possible for you to see the inside of a jail cell. I don’t want anybody reading this blog to wind up in prison. So even though you should win a tax case, you should really talk to your attorney before you go against your divorce or custody decree. Make sure that you’re within your rights in your jurisdiction.

If you are the custodial parent and you are required to let your ex claim your children, remember that the exemption only includes the exemption and the child tax credit. As the custodial parent, you keep the Head of Household designation, the Earned Income Tax Credit (if you qualify), and the Child Care Credit (if that’s relevant.) See my post about splitting a child’s exemption: http://robergtaxsolutions.com/2011/11/split-exemption-claiming-one-child-on-two-tax-returns-%E2%80%94-the-legal-way/

If your ex claimed your child and shouldn’t have, read my post, “My Ex Claimed My Kid” for tips on how to fight back: http://robergtaxsolutions.com/2011/01/my-ex-claimed-my-kid-now-what-do-i-do/

Divorce is tough on everyone. It’s really tricky when you’ve got federal and state rules that don’t always mesh together either. The bottom line is that the IRS does not want to be involved in domestic disputes. If your divorce decree says that the Dad will pay child support and claim the exemption while Mom has the custody, then the IRS does not want to get involved in whether or not Dad paid that child support. That’s why the IRS rules are the way they are. Basically, they’re kicking that issue back to the local jurisdictions. If Dad wants Mom to sign the 8332, then his child support should be paid up to date. If Dad’s done everything right and Mom is still refusing to sign the 8332, then the IRS is saying it’s not their problem – Dad can go back to court and work it out from there-locally.

We used to have a saying when I was a kid: “Don’t make it a federal issue.” I don’t remember where we got it from, probably some TV show. I just remember we just always used to say it. But that’s kind of what the IRS is saying to divorced couples claiming their kids today, “Don’t make it a federal issue.”

If you’ve got a situation where the IRS rules and the court rules don’t line up, do consult your attorney about how your situation can, will, or should be handled.

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Note:  We try to answer all the questions that come to us but please be patient.  It’s our busy season right now.  We may not get to your post until the weekend.  When you make a post and use the capcha code, it won’t immediately show up.  You see, for every normal person like you that posts, there’s about three advertisements for things your mother wouldn’t approve of.  (We try to keep this a G rated website.)   We have to edit those out.  If you need an answer right away, here are some links that might help:

EIC questions of any kind:  http://www.irs.gov/Individuals/Earned-Income-Tax-Credit-(EITC)-%E2%80%93–Use-the-EITC-Assistant-to-Find-Out-if-You-Should-Claim-it.

How to find free tax preparers:  http://www.irs.gov/Individuals/Free-Tax-Return-Preparation-for-You-by-Volunteers

How to find your local IRS office:  http://www.irs.gov/uac/Contact-Your-Local-IRS-Office-1

If you want to hire us, please call (314) 275-9160 or email us.  We do prepare returns for people all over the country (and a few foreign countries as well.)  We are sorry but we cannot prepare an EIC return for someone outside of the St. Louis area because of the due diligence requirements.

329 thoughts on “Court Ordered Exemptions and the IRS

  1. Dear Divorced in 01–
    I’m going to be nit-picky here–because you need me to be. Does your divorce decree say anything like–you ex gets to claim the kids if he is current in his child support? Or anything, like if he pays the insurance.

    The important work here is “if”. That’s a condition. If (what a big little word that is), if there is anything in your document like that–meaning a condition–then you are going to win. It doesn’t matter if he’s one, two, ten or twenty months behind. The support document has a condition and your ex cannot claim your child without you signing an 8332 form.

    So, as long as the kids live with you and your divorce decree requires child support, you’re on the winning side. –Oh it’s going to be work, but you’re going to win.

    Now if the decree says that your ex gets to claim and he doesn’t have to do diddly squat to get the exemption–then you’ve got a problem.

  2. My ex was in child support arrears for 2014. He generally gets to claim one child on taxes if 95% of his child support is paid. Due to the arrears I informed him I would be claiming the child he gets to generally claims. In late January he caught up the arrears (which I am happy about), but this was after the 2014 year ended. Does he get to claim the child on taxes now even though he had been in arrears for the year we are filing on (2014)?

  3. my 2007 divorce decree states,” wife she’ll be entitled to claim the dependency exemption for the parties minor children.”for the 2013 tax return my ex husband claimed my two kids the IRS asked me to show proof so I sent in my divorce decree they stated that was not proof enough. How can this happen? What do I need to do?

  4. Hello i am very confused on what i should do. My ex and I divorced in 2011. When we went to court my ex and i came to a agreement that my ex would claim one child and i would claim the other child every year for taxes. So it was settled by the judge and has been like this for the following years. But last year in january my ex had a open child abuse case agaist our son (the one he claims each year). Since january i have had the children full time at my home and in september i got full custody. Well my ex claims that even thought he hasnt had to children all year because the judge set the taxes up that way it stays that way. Im confused even if he did not have them all year does he still get to claim one of the children because the judge set it up like that?

  5. I have been searching and searching and searching for answers for weeks now. I have gotten so many answers, my head is spinning. Maybe this might be the place to finally set me straight. Me and my ex divorced 8 years ago. In those 8 years he has never once asked to claim my daughter on his taxes even though yes our Divorce Decree does state we are to technically alternate years. He did happen to ask this December and I was taken back by it a little so I asked a few friends who were accountants and they both stated he could but I would still get the EIC so when I to go file my taxes I went to go take a picture so I could show him that I file with with her but only as a “EIC” dependent and he could still claim her as a dependent, however when I went to go submit my taxes it stated that, that “dependent” was already claimed. So I guess my question would be, (Yes it does state in our divorce decree that we are to alternate years but he sees her “every other” weekend unless she has a “school function” then he will forfeit his weekend.) is he entiled to claim her including for the EIC because of our divorce decree or no? I don’t want to look like an idiot because I have been told so many different things. Some say he is entitled to claim her because of the Divorce Decree. Some say he can’t. And some say he can but only as a Tax deduction but not file for the EIC. I really hope this makes sense. Sorry if it don’t. Thank You for any help.

  6. Hi Technical,
    The IRS doesn’t weigh in on issues of “spouse can only claim if child support is paid”. So, technically, you would have the right to claim no matter what. BUT–I suspect getting that child support is better than no so personally, I’d give him the exemption, he made good, right. (Granted slowly but getting paid late is better than never getting paid again.– At least in my opinion.)
    Now, there’s also the issue of what the court would say. I’m not a lawyer, but I imagine, the technical issue would be can he go back to court and force you to release the exemption? I don’t know. But why fight over that? The lawyer fees would be more than the exemption is worth.
    Also, remember, you only release the exemption, you keep head of household filing status (and EIC if you qualify.)
    My personal opinion, (which is not a legal opinion) is that you give him the exemption. With the IRS though–since the exemption has “conditions” you would not be required to let him claim the exemption.

  7. Hi Florida Mom,
    Some of the people you talk to are absolutely correct. You ex may claim the exemption, but you are entitled to EIC and the head of household filing status. Here’s the post you need: http://robergtaxsolutions.com/2011/11/split-exemption-claiming-one-child-on-two-tax-returns-%E2%80%94-the-legal-way/

    So the first thing is to make sure that your preparer tried to file correctly–with you not claiming the exemption, but still claiming EIC. If she did it right, then your ex will have to amend so that you can file. (This will require a paper filed 1040X and it will take some time to get the refund.)

    But first, make sure your preparer did the filing correctly.

  8. Hi Jama,
    your decree was in the right time frame so the thing that may be the problem is “conditions.” Do you have to DO anything to claim the exemption. Like pay child support or provide insurance. Those are considered to be conditions.

    Conditions in the divorce decree prevent you from using the decree as proof that you’re entitled to the claim. So–what do you do?

    1. Go over your decree with a fine tooth comb. If you see a condition–then you’ll have to go to court to enforce that your ex release the exemption by signing an 8332 form.

    2. If there are no conditions, you re-submit the decree to the IRS for a second look. Explain that there are no conditions etc. and fight back.

    One more thing before you fight–you are only entitled to the exemption–not EIC or head of household. Make sure that you are only asking for the exemption–you’re not entitled to anything else and that could be the reason your claim was rejected.

  9. Hi Kelly D,
    It’s a 2011 divorce decree so all bets are off. Under IRS rules, you get to claim both kids for everything. Now, he could take you to court for the exemption, but the EIC and head of household and all that are yours. And what’s he going to do? Take you to court to claim an exemption for a child that he abused? Good luck with that!

    But, I’m not a lawyer. There may be a bit of a claim on his side–in court. But with the IRS, you win hands down.

    If he takes it to court, then I’d petition to have his exemption removed completely and forever! (Once again, not a lawyer, but sounds like a good case right?)

  10. Hi Jan.
    I have a question for you. I have never been married to person in question here but have a dilemma. First, I have a 2003 court order we both initaled and signed that i pay child support as she gets primary custody and have shared legal custody. In this court order, as she is a stay home mom and has not worked since 2003 and before, butis collecting state insurance and health insurance for her and my son.. He stays with her most of the year and i get him every other weekend and most of the summer. This pertains to tax time, I have claimed him every year since 2003 due to the court order that i get to use him on my income tax to claim. I was told from my tax preparer that i need to get a document signed from her allowing me to claim him. Even with a court order that was a final court order, why do i need to get this signed? She does not work and i have this legal document. Any help will be greatly appreciated. I am not late on my child support if this is even an issue. I pay and love to pay this as i know its going for him. Thank you very much as you have helped many in previous comments i read.

  11. I filed for divorce in 2011, at the time, our agreement was that I live in the home with the kids (I pay mortgage, tax and insurance), but he can write the home off (since he made a lot more money) and we would split his tax return. Now he is claiming the max deductions on his W-2, so that he gets more back throughout the year and no tax return, but yet the benefits of writing off a mortgage that I pay for. Can I take the tax credit from the mortgage next year, eventhough the divorce paperwork says he gets the write off?

  12. I (father) was divorced in 2004, I have custody but my son lives with his grandfather, he has physical custody. (Long story)in my divorce decree it states each party claim one child (we had 2, one is too old to claim)for income tax purposes, no “ifs”, can i claim him as an exemption as stated in my divorce decree? I have always claimed him in the past. But now I was audited for 2012, not even a month ago. Saying someone else claimed him and I have to send proof of why me and my wife claimed him as an exemption. The reason is because of the decree. Also, is the statue of limitations almost up for the IRS to review and come to a final decision? If they haven’t by April 15, will I owe if they decide against me? My ex doesn’t work BTW so she doesn’t file a return. Let me also say I was sent a letter from IRS in 2011 for 2009 to send in documentation as of why I filed as I did and exemptions I claimed. I received a no change letter and circumstances have not changed. I sent in my divorce decree and marriage license and his birth certificate at that time. I have sent all this to IRS for this audit but haven’t heard back. My tax account has said since divorce decree states that Each Party claim one child for income tax purposes and it is from 2014 that we could claim him. I was wanting your opinion after finding this site. I would never go against the IRS intentionally. They scare me! LOL TY for your time.

  13. Jan,

    I’m looking for clarification on 8332 and the concept of their being no custodial parent after the child has reached the majority. Thus making the form invalid. I called the irs, and used the interactive tax guide and both say I can no longer “give away” the exemption because I am not in custody of the child. The ex would not qualify to take the exemption unless he lies about the residence of the child. So…. I refused to sign form 8332. My ex took me to court. I was fined $100, ordered to pay $2000 of his attorneys fees, and sign the form. A form that the irs says they will not accept.

    Why is there such a lack of understanding around the age limit of the form? Even the examples in the publication clearly state that the special rule for divorced parents does not apply once the age of majority in the state they reside.

    Now I am waiting for the irs to receive the signed 8332 for last years taxes. When I spoke to the irs, telling them my ex would be sending one in for last year, and we would both be claiming the same ssn, they said they will not accept it and I will not have to amend or owe back taxes. But, now what will the state court do?

    It just seems like there is a lot of mis information being repeated.

  14. Hello,

    Here is the situation- never married before parents, mother relocated, under court order, to Texas, original court order was July 2008- alternating years of child support assuming father is up to date on child support (conditions) and ordered mother to file form 8332. In 2011, child custody was changed to full custody to the father, mother ordered to have supervised visitation only- no other changes made to original court order- no order of child support to the father, no set visitation schedule. And this has not gone without effort to get a final petition for child support and time sharing but, after almost $20,000 in legal fees (because the mother keeps dropping lawyers and getting herself into trouble) and 4 years of fighting, the mother, who has paid a total of $600 in FOUR years toward raising her child, who has not seen her child for an unsupervised visit in FOUR years, claimed her for both the exemption and EIC this year. Now, I know the father can claim EIC because of the order modifying custody to him, but I am assuming he is screwed out of the exemption because he cannot get the court to move faster on their judgments, is this correct? (Mind you, he has raised the issue of her using the court system, being in contempt, etc. but the judges just keep giving her a chance). He has been to three mediations, two case conferences, two judges, three of her attorneys and now, his attorney will no longer do trial, so he has to find himself a new attorney. It has been FOUR long years, and the daughter is only 15. If the shoe were on the other foot, he would be in jail and labeled a dead beat dad, but the state of (where I live) is still very partial to the mother and changes for the fathers cannot come quick enough (and I am a female and recognize this!). The mother is not-locatable (and from my research, she is listed on the states wanted fugitive list, so how did she file a tax return this year?). Anyway, the ultimate answers I am seeking- he can claim EIC and Head of Household correct? and he cannot collect the exemption correct? (his preparer said that by doing this, his tax return goes from $6,000 to $2,700- lovely) There has got to be a better way of proving this stuff for situations like these.

  15. Hi and thank you so much for the article you wrote…So my question for you is that at one point I did receive Government Assistance and was single but working full-partime depending on the day and by commission only. During my child support case in 2014 I believe it was, the judge made the statement that father claim children on taxes, however, custody was 50/50 at that time. Shortly after my daughter was statuary raped in her fathers care by a stranger, I was then granted about 65% custody, him having 1 sleep over a week and most weekends. I then later was married at the end of 2014. My tax people told me that since he pays $23.07 a week for child support which is roughly about $98 and that the children are living with me pretty much all the time and my husband and I caring for their needs, literally we take care of about 97% of their needs that we had a right to claim the children. They’re on my husbands medical and we take them to school and they sleep here. So in 2013 I filed with ex, married and joint, 2014 with ex married filing separate which infuriated him because my income put me at owing $1,500 and his put him at $10,000 and that included him claiming the kids. Now in 2015 my now husband and I claimed 2 of my children and 5 of his. My ex is extremely angry saying that the monographer at the court house has record of the judge saying he I had to let him claim all the children because he pays child support and that I now will have to repay the IRS because of this. I never signed an 8332 form nor did I see the requirement in custody papers, only the statement made by the judge when custody was 50/50. Was I wrong for doing this? Is there a law that protects me since my income and my now husbands income literally cover everything and custody time has increased? Please help.Thank you!

  16. That is $23.07 a week and roughly $98 a month…and to add to my comment there was no court order that stated he continuously could claim the children, just the judge stated he could claim them and Im assuming that would be for that year and under the 50/50 custody which is no longer in effect.

  17. Got a divorce in 2010. 2008 and 2009 we, as a joint couple owed back taxes due to an audit. Court order was for each to pay 50%. My ex-spouse, filed for spousal relief. It was deducted and then I was told it was denied. However, my ex-spouse says her taxes are all paid off and yet I owe over $3000. The debt was only about $4000. This was so long ago, I don’t have clear records. I have been fighting with the IRS who was supposed to split the bills to each of us so we could each pay 50%. After hours of phone calls, the detailed reports of what was owed and paid are either A, completely unclear or incomplete, or they order the transcript and I get a blank page. It is completely frustrating because they cannot show me what each of us have paid in relation to what is owed. Now they just intercepted my state refund for $2300 when I had a payment arrangement (this is federal they claim I owe) and they have not been able to prove the balance belongs to me. The agents don’t have any information and when I call it takes hours of wait time only to be disconnected.

    My question is, how can I get the information and how can they collect from me if they cannot even prove the balance is due from me at my request? Any advice would be great!

    Feels like they can take what they want, regardless just because they are the IRS.

  18. Dear Financial Dilemna,
    Welcome to my world. A couple of thoughts for you.

    1. The IRS doesn’t care who owes the money in your divorce decree–they just see it as a debt and take what they are owed. For example: I worked on a case where my client owed the back taxes. We wrote a letter to the IRS stately that yes, he owed the taxes, it was his responsibility and he would arrange to pay the bill. His ex wife filed her return and they took her refund, even though we clearly stated my client owed the money and agreed to pay.

    2. Now, your divorce decree states that you and your wife each owed 50% of the tax debt, but it sounds to me like she filed an “innocent spouse” claim–which sounds to me like you just got stuck with the entire balance due.

    3. You can’t get the IRS to prove what debt is yours versus hers–they won’t go there. But, since you had that information when you filed your divorce papers, you should have all that.

    4. If you don’t, you will need wage and income transcripts for the tax years in question. Here’s a problem I see–you don’t have power of attorney to get your ex-wife’s tax information. Although you can probably back into hers by getting your wage and income transcripts and your tax return transcript. Although, you are looking at back years that they might not be able to provide you with.

    So here’s what I would do: I would pull out that divorce decree showing how the tax debt was supposed to be divided. I would file an “innocent spouse” claim for yourself, as you are not to be held responsible for those back taxes that should be attributable to her.

    Document, document, document. Show the divorce decree, show what you’ve already paid, show everything. Good luck.

  19. Hi Kiana,
    I’m not an attorney so I can’t tell you what the court will do. The IRS only goes by where the children live. But the court could force you to sign the 8332. So it really all depends upon your courts.

    But you’ve got other tax issues that I don’t understand. If you and your ex split, why file married filing separately? Why not head of household? Were you still living together?

    Why do you allow this man to have the children at all if your daughter got raped at his house? Seriously, taxes are not the main problem here.

  20. Hi Louis,
    since your decree when into effect before 2009, you should be able to just attach the copies of the decree to your tax return to be able to claim your child.

    Now the problem could be if your decree requires that you be up to date with your child support–then you’d need your ex to file the 8332 form. But if there’s no “conditions” in your decree, you’re fine.

  21. Hi Lyn,
    It sounds to me like you should of had a tax person on your divorce team. I think you might need to talk to your lawyer about this. The IRS would rule that the person whose name is on the mortgage interest statement should be the one to claim the deduction. But that’s an IRS thing. I’m not an attorney, I’d hate to get you hauled into court for violating your divorce agreement.

  22. Dear Need Advice,
    I’m thinking that maybe your father claimed your child. He’s the one with custody. Here’s the thing. In your divorce, you were awarded the exemption. The assumption is that the child lives with the mother and the father pays child support. (Not always the case, but that’s the general rule.)
    And in a case like that, it’s perfectly normal for the non-custodial parent to claim a child. That’s why you’ve always passed your IRS audits.
    But now, it’s not a parent who has the child, it’s the grandparent. Now you’ve got a different set of rules.
    So–your first thing is to find out who really claimed your child. If your ex doesn’t work and has no income–it doesn’t make any sense for her to claim him. That’s why I’m betting on Grampa. And you and your dad will need to work this out. Or battle it out through the IRS. I’m thinking you’re better working it out amongst yourselves first.

  23. Hi Turtle,
    I understand your frustration. I’m always shocked an surprised at what goes on in the local courts. And it’s very confusing about the age of majority, especially when college (and the college tax credits) as so contentious.
    I’m not an attorney so I can’t help you with state laws. Technically, federal law trumps state law–but a lot of IRS rules are not necessarily “law” they are interpretations of federal law.
    The IRS may be on your side, and you may win in tax court, but at what cost? I’m sorry about your situation. It seems to me you’re being punished for doing the right thing.

  24. Hi Kelly,
    My interpretation–and mind you it’s my interpretation, is that the 2011 court order granting full custody trumps the old order. I’d file claiming head of household, EIC, and the exemption. Force the issue. I think you’d win.

  25. Hello, I am divorced and legally separated since May, 2010. My ex-husband continued to file joint with me since 2010 thru 2013 and now in the last month the IRS has held my monies twice already in checking account due to filings he made claiming me after he left our home. I was a housewife for 24 years, never worked and he illegally used my soc security # after he left to make these claims. What can I do? can you please help me

  26. Hi Lulu,
    I would file my own tax return showing zero income and using the married filing separate filing status. It’s your way of letting the IRS know that he’s not supposed to be using you on his return.
    I think this is important for you since it sounds to me like he owes the IRS money and they’re taking his debt from you.
    You can go back and file like that for three years. I suggest you do that to protect yourself.

  27. Hello
    My husband has been going to court with his ex whom he never married but they have 2 minor children together he doesn’t see them or have visitation rights but pays current child support and back child support well this last year they had went to court and it was decided by order that if he were to get health insurance for the children he can claim both children all years and the mothers attorney had questioned the judge and saying that he wouldn’t be allowed to since he won’t be up to date on back child support and the judge had said that he can because if he is providing health coverage and the mother doesn’t have a job and doesn’t plan to work by federal law he is allowed to claim them even though by state he wouldn’t be since he is not up to date but that it would be settled when the time comes so basically my question is: is he eligible to claim the children or not? He wants to claim to the children so that the back child support can be paid faster since the irs will take it anyways and the mother will get 25% of it it shouldn’t be a problem anyhow since the mother claims she never filed but she made a big deal in court about it cause I don’t know for sure but I’m pretty sure her father who she lives with claims the children on his taxes but she would be lying to the court and to welfare because she is claiming no one files for them can her father get in trouble for claiming the children since 2012,2013,2014 I was told I can claim my oldest son and now since 2015 I was told I can claim both children as longest I provide health insurance
    So would I be able to claim them?

  28. Hi Juanita,
    If your husband is allowed to claim the children on his tax return, it is for the exemption only, and not for EIC.

    Now, the problem that I see with his claim is that there appears to be “conditions’ to him claiming the children. Any time there are “conditions” like paying back child support or providing health insurance, it messes up his ability to claim the exemptions.

    The IRS will disallow the claim–although the court may force his ex to sign the 8332 which would allow your husband to claim the exemption on his kids.

    So–it looks like you could have a mess on your hands if his ex decides to fight. I would file and claim the children as outlined in the divorce decree–but don’t be surprised if it comes back at you.

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