Noncustodial Parents Beware | Tax Tip of the Week | No. 201

We Have Been Urging This Form for Years....

In a divorce situation when the couple has minor children, it is common to see the divorce decree will allow one spouse to claim the children as dependents in even years and the other spouse in odd years.Over time, unfortunately, the custodial spouse seems to “forget” this sometimes.  To protect the noncustodial spouse, the IRS requires a Form 8332 ( www.irs.gov/pub/irs-pdf/f8332.pdf) to be attached to the tax return.A recent court case (Shenk, 140 TC No. 10) underlines the importance of properly using the Form 8332.  In this court case Mr. Shenk argued he was entitled to claim exemptions taken by his ex-wife.  The failure to have her sign an 8332 to release her claim to the exemption also cost him head-0f-household filing status and the ability to claim the child tax credit for the kids.  Since Mr. and Mrs. Shenk divorced prior to 2009, more liberal rules could have been applied to substantiate his filing.  He could have attached a signed copy of the separation agreement or divorce decree in lieu of Form 8332.For divorces after 2008, the IRS will only accept a properly signed Form 8332 in cases where an ex-spouse improperly claims exemptions of minor children.  This case is one of several that the courts have maintained that this form is the only acceptable remedy.We have been urging attorneys, and separating parents, for years to get this form signed at the time of the divorce when all the other paperwork is being executed.

As always, give us a call with any questions or concerns you may have.You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.Rick Prewitt - the guy behind TTW...until next week.