Suppose a tiebreaker

[jainen]

Suppose a tiebreaker, say between a parent and a grandparent. No, let's make it unmarried parents who split up late in the year, we haven't looked at the situation yet. So the one who makes the most money agrees to not claim the child so the other parent can get the benefits. Two years later as the relationship deteriorates further, the first parent changes his/her mind, filing an amended return to claim the child under tiebreaker rules.

Do you think you'd at least have reasonable cause to avoid the penalties?

[John of PA]

Must be in writing

My understanding is that when the parent entitled to the deduction lets the other parent take the deduction, the parent taking the deduction must attach a signiture in writing to the tax return. (form # ??) So I would only claim reasonable cause if that signiture was obtained.

[jainen]

equal physical custody

Form 8332 gives the exemption to a non-custodial parent. I'm asking about parents with equal physical custody, both more than half the year so the tiebreaker will apply if they both claim the child.

[Bees Knees]

The tie breaker rule in the code says: "if...an individual may be and is claimed as a qualifying child by 2 or more taxpayers...."

In other words, for the tie breaker rule to apply, two or more taxpayers actually have to have claimed the same person. Then the code kicks in and gives it to the one more qualified. It says nothing about a person later changing his or her mind.

So I would say that as long as the statute of limitations is open, the one more qualified could always change their mind and make the one less qualified give it up by filing an amended return.

As far as avoiding penalties, I would say that would be reasonable cause if it was explained the original return was the original intent, until that no good jerk of an ex-husband decided to go back on his word.... or some kind of statement along those lines.

[Jesse]

Interesting

For this reason it probably wouldn't be a bad idea to get something in writing from the tiebreaking person to say they agree to let the "other" eligible person take the credit(s) juts to keep in your file.

[Bees Knees]

It is also a reason why you do not want to represent both spouses by doing both of their returns after they split.