Claiming child - 50/50 custody

[oceanlovin'ea]

Client has 2 children from first marriage. He went back to court to get right to claim both children because he has 50/50 custody of them. Ex-wife does not file a tax return. (Don't know why..maybe supported by livein boyfriend) So children are not claimed by someone else. He claims son every year. He wanted to claim daughter too. They are with him one week, ex-wife next week, back and forth.
She refuses to file out Form 8332. Her lawyer told her she didn't have to, that it wasn't a law.
The divorce was final in 2007 or 2008 but the custody agreement has been modified many times since then.

What do we do with people in this situation? He has the right through the courts to claim his daughter but she isn't going to give form 8332 that says she will. She isn't going to claim child. Do we refuse to do the return with the child on it? Do we put the child on the return and wait to see if IRS sends him a letter? He understands if I can't do it. It is just really a frustrating situation.

Linda, EA

[David1980]

50/50 custody rarely is

With which parent does the child spend more nights during the year?

[DixieEA]

I agree with David, if he has the most nights the exemption is his


DixieEA

[spanel]

I agree with David, if he has the most nights the exemption is his


DixieEA

Especially since 365 cannot be divided by 2, so it cannot be 50/50 in all reality.

Chris

[mastertaxguy]

Leap year

Especially since 365 cannot be divided by 2, so it cannot be 50/50 in all reality.

Chris

However, 2016 was a leap year: 366 days.

[spanel]

However, 2016 was a leap year: 366 days.

I digress

Chris

[Snaggletooth]

THEIR problem can't become YOUR problem

Clients have tried to push the problem onto me by alleging that everything is 50/50. They are lying. They are wishing to put their problem on me. Judges are getting smarter - more and more 50/50 custody rulings are happening. I've heard this thing about "one-week-on, one-week-off" in an effort to deny either of them have more than 50%.

I tell them if it is "truly" 50/50, then neither spouse has 51% and NEITHER of them gets to claim the child. That usually gets them to admit that one parent really does have more than 50%.

[BP.]

if it is "truly" 50/50, then neither spouse has 51% and NEITHER of them gets to claim the child.

TTB 3-13. Final bullet point bottom right. If 50/50 then parent with higher AGI can claim.

Ex-wife does not file a tax return.

TTB 3-13, QR #5. Since Mom doesn't file, then child is not her QC. Could child then possibly qualify as Dad's QR in your particular case?

[Kram BergGold]

A Suggested Approach

If the parents live in different towns then to me custody goes to the parent living in the town where the children go to school. If they live in the same town and the school one attends is determined by ones address then this can also be a determining factor.

[taxea]

His taking the child requires a 8332. IRS rule trumps the court order so he gains nothing by having the court order the child as his dependant. He would still need the 8332.

[mactoolsix]

His taking the child requires a 8332. IRS rule trumps the court order so he gains nothing by having the court order the child as his dependant. He would still need the 8332.

However, if he is the custodial parent (child stayed over 50% of the nights) then an 8332 would not be necessary.
In cases like this, you just can't beat a calendar log.

[Roland Slugg]

FWIW I will repeat what I consider the most important points made by others above, then offer one or two of my own.

It's not very likely that a child spends exactly equal time with each parent. In fact in non-Leap Years, it's theoretically impossible. But then there's the scenario where the child spends, say, 180 nights with each parent and 5 nights away at camp or something. The calendar idea is a good one.

If the father is SURE the mother isn't claiming the daughter, why not simply put her on his return? I don't think the issue would ever come to the IRS's attention unless both parents claim the daughter as a dependent. However, how can the father be sure the mother isn't claiming the child? I don't think there is any way to know for sure, and his speculation is worthless.

If the time spent with each parent is, in fact, equal, then the parent with the greater AGI gets the child's exemption. But again, how do you learn this? If the parents won't cooperate with each other, everyone can only guess.

There is little to be lost for the father to claim his daughter as a dependent on his return. If the IRS disallows, he's lost nothing as long as he can get everything backed out and corrected by the due date for filing his return.

[FEDUKE404]

Relevant observation

Of course, all of this could make life unbearable for the poor tax professional who has to fill out the Form 8867 for the child(ren) generating the dad's CTC(s).

FE

[oceanlovin'ea]

Ex-wife has never filed a tax return since their divorce. Don't know her circumstances but apparently she doesn't work. She has told him she doesn't file a tax return. That is why he has gone back to court several times to get agreements changed.
I am tempted to put child on the return and see what happens. If it is denied, then he will have to give money back. I will do return with her and without her and let him know that he might have to return that amount to them if it is denied.

The school has mother's address because they have to have one address. They live close enough that where they are at night doesn't effect getting to school. But she is not custodial parent because it has been changed to 50/50.

Someone needs to tell the judges that they need to put in their decrees that the custodial parent must supply non-custodial parent with form 8332 each year they are to claim the child. That would solve a lot of problems. Lawyers need to know also so that they can request this in the paperwork for the divorce. Some ex's are just not agreeable and no matter where they are in their lives they aren't going to be nice to their ex. He wanted her to call me and just let me send her the form but she won't do it.

[Lion]

But she is not custodial parent because it has been changed to 50/50.

Custodial parent for tax purposes is a different definition than you're using. The custodial parent has the child the most nights, is the short definition. You can get into child visiting grandparents or sleep-away camp or sleep-overs, but your client needs to mark his calendar. If your client had his child over half the nights in 2016, he is the custodial parent on the tax return. Tell him to check his calendar and retain it with his tax records.

If not, and he's really sure his ex does not file a tax return, you might want to consider him the custodial parent, if you think his records could show it or be close enough you don't get into willful negligence or other nasty penalties.

If not, and he's making all these trips back to court anyway, have him request the court ask for a signed 8332 covering specific years (alternating, all years to age of majority, whatever).