The Importance Of Form 8332

Divorced taxpayers with children that fail to include an executed Form 8332 with their tax return will lose the exemption for that particular tax year. Form 8332 (Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent) allows parents to do the following.

  • Release a claim to exemption for a child so that the noncustodial parent can claim an exemption for the child.
  • Revoke a previous release of claim to exemption for a child.

I.R.C. § 151(c) allows as a deduction an exemption for each dependent of a taxpayer. Under § 152, a dependent is defined as either a qualifying child or a qualifying relative. To be a qualifying child, among other requirements, the individual must have “the same principal place of abode as the taxpayer for more than one-half of such taxable year.” A “custodial parent” is “the parent having custody for the greater portion of the calendar year.”

Under I.R.C. § 152(e), a child who is in the custody of one or both of the child’s parents for more than one-half of the calendar year and who receives more than one-half of his or her support for the year from his or her parents may be considered the qualifying child of a noncustodial parent if (1) the custodial parent signs a written declaration that she will not claim the child as a dependent and (2) the noncustodial parent attaches the written declaration to his return. Form 8332 is used as a taxpayer’s written declaration in this situation.

According to a recent Tax Court decision in Eichinger v. Commissioner, T.C. Summary Opinion, 2016-18 (Apr. 21, 2016), “. . . the touchstone for decision is whether the custodial parent executed a Form 8332 (or a similar written statement) and whether the noncustodial parent then attached such form (or statement) to his return.” In this case, the taxpayer claimed all three of his children from a prior marriage on his joint tax return, but failed to attach a Form 8332 (or similar written statement executed by his ex-wife) to his return.

Failure to file a Form 8332 or similar statement may be costly. If you a parent and have questions about the § 151 exemption discussed herein or any other child-related deduction or credit, call THE TAX EXPERTS at the Thorgood Law Firm www.thorgoodlaw.com. For a FREE consultation, call 212-490-0704.The Importance Of Form 8332

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