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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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

 

375 thoughts on “Court Ordered Exemptions and the IRS

  1. Hi Chanda,
    It sounds like you should be able to claim your child on your taxes, assuming that you meet all the other requirements of claiming a dependent.

  2. Hi Andrea,
    The agreement is 2009 so the custodial parent would need to sign an 8332 form to release the exemption. Your husband is the custodial parent so he (and you) get to claim the exemption for the son.

    Now, the ex might try to claim him, and she might try to use the agreement as her argument–but since you are the custodial parent, you win this with the IRS.

  3. I have a court order for child support (receiving parent) and in the Time Sharing order it states that we are to rotate the tax exemptions. However the Non custodial has not filed in 2 years, therefore having arrears of almost 4,000.00 , because its his turn to file the tax exemptions, can he “file” even though he hasn’t in 2 years to avoid interception of arrears.

  4. Hi Neka,
    First and foremost, you only lose the exemption, you do not lose your head of household filing status. If you qualify for EIC, you do not lose that either.

    You mention your exes arrears – you mean child support arrears? Or tax arrears? I got lost there.

    Are you saying he’s not filing his tax return so that his refund doesn’t get seized for his child support? That’s pretty dumb but it happens all the time.

    So—let’s say he still hasn’t claimed your child for his 2013 tax return, which would have been the last time he could have claimed him You could still get the refund by claiming the child on your return. He’s basically got three years to file those returns to still get a refund. If he’s not going to claim your child, you’ve got until April 15th 2017 to get that 2013 refund before it’s lost forever.

  5. Divorce decree states mother and father are to alternate claiming the child every other year. Nothing is stated about form 8332 in divorce decree. Father is considered by IRS the custodial parent. Mother has claimed minor on her taxes every other year persuent to the divorce decree, but never requested father to sign form 8332. Can father go back and amend the tax years that mother claimed minor illegally To have father claim minor for those years?

  6. Hi Ann,
    Let me see if I understand. Dad is the custodial parent, but mom gets to claim the kid every other year. And that’s what she’s done, right? Okay, so dad never signed the 8332. What illegal thing has the mother done? And why should the Dad go back and amend his returns? I’m missing something.
    So yes, she’s supposed to have the 8332, but she didn’t. But she was supposed to claim the kid anyway, which she did. Sounds like everything is good. So what’s the problem?

  7. I was legally separated since 2012, 12/2014 divorce went thru and settlement agreement that was signed stated on even tax years I file 2 children, and odd I file 1. Custody is shared (order is exactly 50%/50%) even though i have them more. Regardless, when filling out taxes, if i say the children lives with both of us, i pay for most expenses, and i make way more then ex, HR block and Turbo tax both consider them my dependents based on those few questions. Looking into this a bit, it appears that I could claim all 3, and IRS would do nothing in Ex’s defense unless there was 8332 filed. That said, what legal ramifications would i be looking at should Ex decide to take me to local court where decree was filed and say that i did not adhere to the 2014 divorce agreement since i filed tax exemptions according to IRS guidelines. The Ex up until this year made less than 30k per year, and i make close to 90k. due to this, my state does not care if we have 50/50 custody, i still owe 850 per month in child support. i do not bother going and trying to get primary custody again, becuase its a hassle and the kids pay when we fight. Even tho Ex mainly uses them for the income. i dont feel its right, but i do it as i can afford it. but taxes are getting expensive the more i seem to make, and to me there is not point in someone who makes so little to claim dependents when guidlines say i should…..

  8. So my son’s mother is the custodial parent of him and she had custody, she was incarcerated for ten months last year and he lives me (the father). I still pay child support and it is current, I have no means to take her back to court, otherwise I would. Now she says she is claiming him on her taxes when he only even seen her maybe 15 days last year. Is there anthing I can do about this? She has to sign the 8332 form in order for me to claim him and I know she is not going to do that. Can anybody help?

  9. I am the obligee and the dad is the obligor and he is wanting to claim the kids for income tax. He said if I fail to do so that he will take me to court and I will have to sign the 8832 form. If not I can go to jail. Is this true.?

  10. Dear Tired of Paying Out,
    The question you ask is about “what legal ramifications…” so I’m stopping there. I’m not an attorney. It’s against the law for me to give legal advice.

  11. Hi Brett K,
    In tax terms, “custodial” means that the child lives there. I know if divorce terms you can have 50/50 custody and the child may never even see the parent, but in tax terms, it means you really live there. If your ex was in prison for 10 months, your child could not have lived with her. (Unless it was a really special prison!)

    So, your child lived with you, you had custody. Your ex doesn’t need to sign the 8332 for you, and you don’t want her to! You are claiming the child for the exemption and the EIC and the head of household and the child tax credit.

    If it goes to audit, well – you can prove your child lived with you and ….ahem, she can’t now can she? You win.

  12. Hello!! I found this article very informative but still looking for clarification. I am the custodial parent of our 2 children. Our decree says that I get to claim our son and my ex-wife gets to claim our daughter. She (ex-wife) made less than $10,000 last year and wants to claim our daughter. So, if I understand this correctly she only gets the tax exemption and I still get HOH and EIC. Is that correct? If she files incorrectly and files for the EIC and I file for the EIC and she files first. What would be the correct way to handle that with the IRS?

  13. Hi,
    Can a custodial parent file the form 8332 directly through the irs and obtain a copy as proof of filing with my own SS# redacted? My ex has not attempted to claim our daughter on his tax years in nearly 8 years and suddenly wants the exemption. Per decree I cannot deny the exemption but because of his history of fraud with erroneous SS#s and obtaining credit I do not want him to have access to my SS# or our daughters.

  14. Ok well…wife and I seperated 3 years ago she left the state illegally while on probation and has recently had another child….well my ex and I had signed a local court temporary physical costody at the time for school purposes for my daughter to go to the school zoned where my mother lived…well last 2 years I’ve let my mother claim her…this year I have lived with my daughter every day of the year as has my mom…I feel as if I’ve put atleast 50 percent up this past year…she seems to think I have no parental rights but I have legal custody and am the father…who do you think would be more likely to have tax rights this year..and would head of the house apply even though I’m not main name on the lease…wife hasnt seen daughter in years my 8 year Olds grandmother believes a temporary physical costody trumps me being a father…seems as if I can’t win..

  15. Hi Angela,
    I’m sorry, I don’t know of any way to get around having your social security number on the 8332. You might want to speak with the IRS directly on that one and explain your situation. Maybe they have a solution that I don’t know about.

  16. Our decree states that me and my ex alternate years on claiming our daughter.on taxes and we had shared custody but since he got arrested last feb he has not seen his daughter since hes in prison serving 8 years but this year is his year to claim her . Will I get in trouble if I claim her if its his year but has not seen her ?

  17. Hi Casey,
    I’m sorry about your situation. Even though he’s an ex, it’s hard to have your child’s father in prison.

    So here’s where we’re going from here. First, will he even have any taxable income for this year? If he needs to file a return and he needs the exemption, well then you let him have it. (The exemption only!) If he’s been in prison for the full year, and there’s no tax return, well then thee’s no need for him to have the exemption and of course you just keep it. Since he got arrested in February, I’m thinking he won’t have enough income for the year to need the exemption. And, I’m thinking his income will be so low that he won’t qualify for the child tax credit either so I’m really thinking it won’t help him at all. But I don’t know the whole story. The decent thing to do is to ask him if he’s filing a tax return. (My guess is no, but if you ask, at least you’ll have done the right thing.)

    Now for the next 8 years, he won’t be needing an exemption at all – so the exemption is all yours. What’s he going to do, take you to court over it? Okay, here’s the part where I say that I am not an attorney so I am not allowed to give you legal advice. So there’s no legal basis to what I just said there. That was just a “for being practical” sake. The IRS is going to be fine with you claiming the exemption. If your ex wants to fight you for it, he’ll have to take you to court. That would cost him money. The exemption would get him no money so what would be the point?

    Remember, even if you do give him the exemption for this year, you are the custodial parent and you keep the head of household filing status, the Earned Income Tax Credit (if your qualify), and the child care credit (if your daughter is in daycare.)

  18. My son’s father was court ordered to allow me to claim our son even number of years. It says in the custody agreement that he has to provide an IRS form 8332 to me on my years. I have been without a job for 6-7 months because of pregnancy. My boyfriend has been supporting my son and I but I am not the custodial parent. I don’t have an attorney. If he fills out the form, can I let my boyfriend claim my son and I on his taxes? My son’s father is against this happening. I just feel he should be able to since he’s been supporting us.

  19. Hi Jaymi,
    Your boyfriend cannot claim your son on his tax return. It is illegal and he could get into trouble. If you were married to your boyfriend, that would be different. Even though you haven’t been working, you must still have some income and that should qualify you for the child tax credit at least.
    You are not the custodial parent so you may not claim EIC, only your ex may claim EIC for your son. Sorry but that’s the rules and you really don’t want to get your boyfriend into trouble over this.

  20. I have a question, my kids father was behind in paying his Child Support finally he started paying it through his job but is currently owing back Child Support. My question is how is he getting away with not filing his Income taxes now for 8 yrs. He got married last summer so how is he able not to file taxes now that he is married.

  21. Hi Carmen,
    I have no idea how he’s getting away with it. Most likely, he would have qualified for a tax refund. The IRS doesn’t go after you if you would be getting a refund anyway. They only go after you if they think you owe. So – he doesn’t file and you don’t get his refund – which is what you’d get because of the back child support. You could try reporting him to the IRS – but since he doesn’t owe-they don’t care! They’re winning because they’re keeping his money! (Sorry, I said I had no idea, but I guess I did have an idea. Sadly, I’m not helping you here am I?)
    It sounds to me like he’s just not filing his returns out of spite. But the thing is, at least if he filed, even though you’d get the money, it would reduce what he owes you and eventually his work would quit garnishing his wages. (Although if he’s just doing it for spite, you could tell him that until you’re blue in the face and it probably wouldn’t change anything.) Sorry.

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