Have a Tax Question? Ask a Tax Expert
In our divorce decree (which was based on our separation agreement), I agreed to sign a Form 8332 every other year so my ex could claim our child as a dependent on his tax return. I didn't know I had a choice (my lawyer took $2,500 from and now I am finding out he didn't help much at all! My fault, I know). However, my ex spends absolutely NO time with our child - he has totally cut himself off from her (it's his way of punishing her and trying to make her feel guilty) - and has refused setting up visitation right from the start! Can I have this part of our divorce decree modified and if so, how do I go about this without a lawyer? I also read that the mere fact that the NYS Supreme Court granted the right to claim the dependency exemption deduction is immaterial because a State court cannot determine issues of Federal Tax Law. Does that mean I don't have to sign the 8332? Please advise. Thank you!
You will have to follow the court order, or be liable to contempt of court. I do not know which NYS Supreme Court case you are talking about. If you let me know which one, I can read it and give you an opinion about it.
However, in general, the IRS position on this matter is, that the IRS acknowledges the courts right to determine how the children can be claimed on taxes, it has to be within the meaning of current tax law.
So , the IRS stated position on the divorce decree, is that a non-custodial parent may claim the children using the divorce decree as a basis, if that decree contains the content and language or words to the effect of the form 8332. In that case the IRS recognizes the right of a father to claim the children provided they are otherwise entitled.
Under special rules and separated parents, the IRS allows the non-custodial parent to file children as long as one of the following 3 things are in place:
1. A form 8332 is signed by the custodial parent.
2. A statement containing the language of form 8332 is signed by the custodial parent.
3. A divorce decree orders it and the divorce decree contains the language, and content of the form 8332.
Your divorce decree cuts to the chase, and says you need to use a form 8332, and allow your ex to claim the children . This is not determining a tax issue. It is not awarding an exemption where one does not already exist in tax law or the IRS instructions. The court is recognizing that tax benefits are a custodial issue courts to consider.
If he court had said this about someone not entitled to take the exemption, then the IRS could exclude itself from following the order. But in this instance, he is otherwise entitled, and so you have to follow the court order, unless you can get it modified.
I cannot tell you if you would be successful at modifying it. Your basis is that the court lacked jurisdiction. In my mind, if you are ready to pay the expense, of landmark court decisions, without a guarantee of winning, then you should go . This has the potential of getting big, because not only would you be challenging the court on jurisdiction, but also on the divisibility of tax benefits, that someone is otherwise entitled to already, by the court.
Think of the far reaching effects. Think of 10's of thousands of divorce proceedings every year, where divorce courts are deciding who pays the capital gains on property settlements during divorce, or how court orders are written so that one party or the other, or both, can avoid taxes or incur taxes on division of 401(k)'s, and so forth.
The issue of who gets the exemptions and divorced on the IRS side, is not dependent on whether or not the non-custodial parent fulfills his or her visitation option, or whether or not the non-custodial parent is current on child support. It is based on the fact that the non-custodial parent as sanguinity, and is allowed to if one of the three conditions previously stated are met.
The IRS is on record as having said if the divorce decree is within compliance with form 8332 and the tax law, the IRS will recognize it and enforce it. However the IRS also is on record as saying they will not resolve issues related to problems with the decree itself.
So if you want to modify the order, to take away his right to claim the children in alternate years, then that requires you to ask modification. I know I said earlier that your basis would be on lack of jurisdiction, but I said that with respect to your comment about the NYS Supreme Court. You can also ask , simply that he is not fulfilling his visitation and support requirements and you would like wider discretion in determining when he can claim the children in any give year.