I Hate Dependent Laws

[BOB W]

How can laws be written to cause two sections to have two separate answers. I respect BP and NYEA. Both have "in your face" reading material and each have different answers. The Flow Chart is from the IRS and reading the left column's YES/NO it says I can take the HOH status for my client. What a mess...................

[BP.]

Look at the 2007 1040 booklet instructions on page 13 - Test 2. Item #2 says your unmarried qualifying child who is NOT your dependent. (caps added).

OK, 1040 inst, p. 13, going through the tests you mention. Going in numerical order under test 2, let's back up from item 2 to item 1(a), which parenthetically has us reference p. 15 to define a QC. OK, flip to p. 15, we get to the bottom of our chart to see we need to go to p. 17 if we have a child who is the QC of more than one person. And there we are brought to our rule. Spelled out for us. How do you reconcile this rule and still give dad HOH?

[New York Enrolled Agent]

No, dad can't be HOH. No, you aren't reading the chart correctly. New York Enrolled Agent correctly analyzed your case and demonstrated that the rules for divorced and separated parents do not apply here. (Ref pub 17 p. 34, #1, c- Lived apart last 6 mos of the year test is failed.) Look at the chart you have referenced on TTB 3-18, right hand column of boxes, second box from bottom. The answer there in your case is no, so the next box provides your answer: no HOH. Refer instead to TTB 3-17 for the rules that do apply in your case- the rules for a qualifying child of more than one person. That should give you the answer you need.

I'm going to disagree with BP on the HOH issue. I only addressed the exemption issue in my post and not the filing status.

IMO - Dad is entitled to file HOH as per §2(b). Dad maintained a home for more than ½ the year which was the principal abode for a qualifying child. The qualifying child is not required to be a dependent. There is nothing in §2(b) requiring this.

Look at the 2007 1040 booklet instructions on page 13 - Test 2. Item #2 says your unmarried qualifying child who is NOT your dependent. (caps added).

Dad can file HOH - no exemption for child.
Mom files single - takes the exemption and all the other goodies that follow.

[BP.]

I never have to get to that box because I can answer YES at the right hand column 4th box (from bottom)

The child is QC to both parents, but only one can treat the child as QC. (Sorry, broken record time: TTB 3-17: If QC of more than one person, only one can claim child as QC for all tax benefits . . . ) So if Mom claims child, you must answer no to your question.

[BOB W]

No, dad can't be HOH. No, you aren't reading the chart correctly. New York Enrolled Agent correctly analyzed your case and demonstrated that the rules for divorced and separated parents do not apply here. (Ref pub 17 p. 34, #1, c- Lived apart last 6 mos of the year test is failed.) Look at the chart you have referenced on TTB 3-18, right hand column of boxes, second box from bottom. The answer there in your case is no, so the next box provides your answer: no HOH. Refer instead to TTB 3-17 for the rules that do apply in your case- the rules for a qualifying child of more than one person. That should give you the answer you need.

His post is only talking about giving up the dependent to another person...???

I never have to get to that box because I can answer YES at the right hand column 4th box (from bottom)

[BP.]

Can Dad be HOH?

Upon reviewing TTB 3-18 chart, "more that half the year" seems to qualify my Dad client for HOH along with having a qualified child and child NOT being claimed as a dependent...Am I reading this correct???

No, dad can't be HOH. No, you aren't reading the chart correctly. New York Enrolled Agent correctly analyzed your case and demonstrated that the rules for divorced and separated parents do not apply here. (Ref pub 17 p. 34, #1, c- Lived apart last 6 mos of the year test is failed.) Look at the chart you have referenced on TTB 3-18, right hand column of boxes, second box from bottom. The answer there in your case is no, so the next box provides your answer: no HOH. Refer instead to TTB 3-17 for the rules that do apply in your case- the rules for a qualifying child of more than one person. That should give you the answer you need.

[BOB W]

I do NOT believe what you are saying is true. A custodial parent can release a child's exemption to a non-custodial parent under the special provisions of §152(e). The Tax Court has ruled that the parents are not required to have ever been married (King 121 TC No. 12). HOWEVER, the only provision in §152(e) that provides this for never-married biological parents, requires that the parents have lived apart at ALL TIMES during the last six months of the calendar year. The original post stating they lived together for 8 months CLEARLY prohibits using §152(e). Thus mom cannot release the child's exemption to dad or anyone else. The rule simply does not apply.

Since the child satisfies all 4 of the requirements with respect to both mom & dad, the child is a qualifying child of both parents. Thus IMO, if the parents are in agreement, the child can be claimed by either parent. If they don't agree and both tried to claim the child, then §152(c)(4)(B) would give the exemption to the mom as the parent with whom the child resided for the longest period of time during the calendar year. That is the first tie-breaker rule for parents and would apply.

The child dependency can go to MOM, that is OK. What I'm now looking for is HOH for unmarried DAD. Can Dad be HOH?

As I mentioned in one of my posts, even after Mom moved out there was still many days per week where Mom and Child stayed at Dad's house. It is a fact that Mom did not provide support for child nor maintain a home for child, Dad did. Dad continued to pay $200 a week while Mom and child were at Grandma's house. That is all real facts.

Dad is selling house in 2008, short sale, and Mom, Dad and child are getting back together (unmarried) in rental apartment.

This is enough to get me out of this tax business. I don't like my tax work to come back reversed by IRS because of unclear laws, at least unclear because of my failure to understand HOH and dependency as written.

Upon reviewing TTB 3-18 flow chart, "more that half the year" seems to qualify my Dad client for HOH along with having a qualified child and child NOT being claimed as a dependent...Am I reading this correct???

[BP.]

So, this is what I plan on doing.. Mom (child's mother) says she is taking the child as dependent. I do not do Mom's (child's mother's) tax return. Father will claim HOH with no dependency and list childs name and SS on line 4. And that is that.

Dad can't be HOH w/o claiming child. Child is QC of more than one person. See TTB 3-17 bottom left.

[New York Enrolled Agent]

It was stated in the original post that the child was always living with Mom, who lived eight months with Dad and four months with Gramma. However the law allows mother to give the dependency exemption to the Father at her discretion. I think she could even give the exemption to you or me if so inclined.

I do NOT believe what you are saying is true. A custodial parent can release a child's exemption to a non-custodial parent under the special provisions of §152(e). The Tax Court has ruled that the parents are not required to have ever been married (King 121 TC No. 12). HOWEVER, the only provision in §152(e) that provides this for never-married biological parents, requires that the parents have lived apart at ALL TIMES during the last six months of the calendar year. The original post stating they lived together for 8 months CLEARLY prohibits using §152(e). Thus mom cannot release the child's exemption to dad or anyone else. The rule simply does not apply.

Since the child satisfies all 4 of the requirements with respect to both mom & dad, the child is a qualifying child of both parents. Thus IMO, if the parents are in agreement, the child can be claimed by either parent. If they don't agree and both tried to claim the child, then §152(c)(4)(B) would give the exemption to the mom as the parent with whom the child resided for the longest period of time during the calendar year. That is the first tie-breaker rule for parents and would apply.

[BOB W]

So, this is what I plan on doing.. Mom (child's mother) says she is taking the child as dependent. I do not do Mom's (child's mother's) tax return. Father will claim HOH with no dependency and list childs name and SS on line 4. And that is that. Child's mother can do what she want> not my client.


Thank you all for guiding me through this maze of Congressional overgrown fodder.

[BP.]

And by no means can someone just give to you or me any exemption just because they are so inclined.

Absolutely agree with that.

And what about TTB p. 3-17- QC of More Than One Person. The child only has to be member of household for more than half the year to be a taxpayer's QC. This child meets the test for both parents. Also see Pub 17, p. 28.

[Jesse]

It was stated in the original post that the child was always living with Mom, who lived eight months with Dad and four months with Gramma. However the law allows mother to give the dependency exemption to the Father at her discretion. I think she could even give the exemption to you or me if so inclined. You are also incorrect in thinking that they can't split EIC and CTC/Dependency. Nowhere in the EIC rules is it written that you have to be able to claim the child's exemption. It is also btw possible for Dad to get HOH out of the child whether or not he gets her dependency exemption.

You are correct that mother is Single.

In reference to what Lion said, my approach as TP would depend on whether I was working for Mom, Dad, or both. If I were working for both I would have to explain that they have a conflict of interest because they can't both get the maximum benefit.

The custodial parent can let the noncustodial parent take the dependency and child tax credit but if both qualify to take the child you cannot split the credits. And by no means can someone just give to you or me any exemption just because they are so inclined.

[Jesse]

I too get the rules mixed up - I was not taking into account the support issue. W/ divorced couples the child support is considered as provided by both parents.

In your case has Dad provided more than 1/2 the support for the year? Child lived w/ Dad for more than 1/2 the year so this then would be Dad's qualifying child.

[erchess]

The reason he can't claim the child without Mom's

permission is that there was no time when child lived with him and not mother and child was with mother the whole year. It's therefore clear that she has physical custody of the child for the whole year. That means the dependency exemption goes where she says it does and any money Dad brings to the situation affects dependency only to the extent Mom says it does.

[Gretel]

I think dad has same right to claim child as mom has. Both are the parents but since they were never married mom doesn't need to give permission. Tie braker rules will apply though, which would give child to mom. Let's hope they can agree.

Bob, I, too hate the dependency rules. Since they changed them I keep getting confused all over again in certain situations.