I Hate Dependent Laws

[BOB W]

That makes total sense. Probably that is the only time...???

[Jesse]

If I am the custodial parent qualifying for HOH but I sign form 8332 to allow the noncustodial parent the exemption I would need to list the child on line 4.

[Gene V]

I use line 4, when the divorce mother has custody of the child, however, she signs an 8332 and release exemption to ex-spouse.
This way she claims HOH without a dependent exemption.

[BOB W]

Situation 3 says child can be claimed as an exemption, so 1040 line 4 is not needed???

Line 4 is for HOH without a child's or a person's exemption> just listing name and SS#.

[BP.]

Just to complicate this discusion> When would 1040 line 4 be used?

TTB 3-16, situation 3.

[BOB W]

Just to complicate this discusion> When would 1040 line 4 be used?

[Bees Knees]

Are you're telling me that the Internal Revenue Code in §2(b) says Bob's dad qualifies for HOH but the IRS does not want us to do that?????????????

If I'm misreading the IRC, please correct me. If I'm reading it correctly, then the clear language of the statute should govern. I still ask the question - where in the IRC does it prohibit Bob's client from HOH? The IRC is the ULTIMATE authority.

The IRC is the ultimate authority, and the IRC section you quoted does in fact prohibit Bob’s client from HOH, IF the tie breaker rule applies and Mom winds up claiming the dependency exemption.

IRC Section 2(b)(1)(A)(i) says you get HOH if the person living with you is a qualifying child as defined in Section 152(c).

Section 152(c)(4) says if 2 or more try to claim the same qualifying child, then the tie goes to….blah blah blah….(you know the rules)

In other words, only one taxpayer can ever claim any individual as a qualifying child. If the tie breaker rules give qualifying child status to mom, then that child is NOT a qualifying child of Dad, thus voiding any HOH under Section 2(b). If the tie breaker rules give qualifying child status to Dad, then that child IS a qualifying child of Dad, thus allowing HOH under Section 2(b).

The key here is even though Section 152(c) applies to the dependency exemption deduction, Section 2(b) uses Section 152(c) to define whether you get HOH.

You can’t ignore who actually claims the child as a dependent when considering the HOH rules.

[dtlee]

Are you're telling me that the Internal Revenue Code in §2(b) says Bob's dad qualifies for HOH but the IRS does not want us to do that?????????????

Yes.

I still believe putting the child's name on line 4 is not "claiming" the child as envisioned in IRS Notice 2006-86.

Here is where things are clear to both the normal human reader and also to the IRS, but their interpretation is different. You do not claim a child for Head of Household or for EIC purposes, but the IRS interprets any use of a Qualifying Child as "Claiming" the child. Hence, I do not believe the rules are "clear."

If you peruse the link I provided to the other thread, you can see that there are others who agree that the language in the code does not restrict multiple taxpayers from using a Qualifying Child for different purposes. However, there are also those who cite the committee reports of the intent of the law and I would also suggest that the original proposal by the IRS was that a Qualifying Child should only appear on an single tax return. Obviously, they lost on the divorced/separated parent rule, but they believe the law supports them for all other situations.

My point is that the IRS has repeatedly interpreted all of this as meaning the Qualifying Child can only be listed on a single return (for any and all purposes) and will use the tiebreaker rules if they find this child on more than one. If the taxpayer feels that they can win this in court and the preparer feels comfortable taking the position that Head of Household is available even when the other parent claims the dependent exemption, I would love to read the decision in that case.

If I'm misreading the IRC, please correct me.

Seriously, Frank if I thought you were misreading the code, I would tell you (after getting my head examined).

In case you have not yet noticed, when they added the Uninformed Definition of a Child, they did not do a very good job. There are complicated situations and unintended consequences all through the sections that are infected with that change. My example of parents who can't claim the child due to the rules for support being different for parents compared to other relatives living in the home is another problem where they did not make sure all areas of the code made sense together.

Recent discussions here and elsewhere about the QW or HOH status and why a Qualifying Child can't qualify you for QW or to be considered unmarried unless it is your child (i.e. not a grandchild) show how convoluted the rules have become. The contention by a majoyr tax firm that Qualifying Relatives are eligible for Child Care Credits is yet another case where someone found something that could make sense if interpreted in some way but no one else seems to have interpreted that same rule the same way.

[New York Enrolled Agent]

NYEA,

I have come to grips with the fact that the IRS does not want us to do that.

The comment that the QC does not have to be a dependent to qualify you for Head of Household is a holdover from happier times but REMAINS TRUE. There are times when you cannot claim a QC as a dependent but you can claim Head of Household with that QC.

Doug

Are you're telling me that the Internal Revenue Code in §2(b) says Bob's dad qualifies for HOH but the IRS does not want us to do that?????????????

If I'm misreading the IRC, please correct me. If I'm reading it correctly, then the clear language of the statute should govern. I still ask the question - where in the IRC does it prohibit Bob's client from HOH? The IRC is the ULTIMATE authority.

I still believe putting the child's name on line 4 is not "claiming" the child as envisioned in
IRS Notice 2006-86.

Dependent defined—rule for 2 or more CLAIMING qualifying child—interim guidance.
Headnote:
Until regs are issued, IRS provided interim guidance for situations where more than one taxpayer CLAIMS child as “qualifying child” within meaning of Code Sec. 152;

In any case, The Giants won so who cares about the IRS. In the interim you, I and BP will agree to disagree.

[dtlee]

BP
I thought we were going to agree to disagree.

Actually, let me nuance the words before I get ready to watch the Super Bowl and HOPEFULLY, see the New York Giants get a victory!!!!!!!!!!!

Seriously, I think our difference hinges on the word "claim". IRS Notice 2006-86 discusses this issue when one or more claim a q.c. as a DEPENDENT. I don't think using the child for purposes of §2(b) is "claiming" the child - that's why Bob is going to enter the child's name on the line by box 4. The headnote of this Notice says when a dependent is claimed by more than one taxpayer.

I'll post a snip of Notice 2006-86 (Caps added):

Except to the extent that § 152(e) applies, under §152(c)(4), when more than one taxpayer CLAIMS a child as a qualifying child {as a dependent - I'm adding this modifier}, the child is treated as the qualifying child of only one taxpayer for all the provisions that employ the uniform definition of a qualifying child (head of household filing status under § 2(b), the child and dependent care credit under § 21, the child tax credit under § 24, the earned income credit under § 32, the exclusion for dependent care assistance under § 129, and the dependency deduction under § 151). This rule is applied to these provisions as a group, rather on a section-by-section basis.

I'm posting a portion of the law (i.e. the IRC) - §2(b). I tried for simplicity sake to only paste the relevant portion (Caps added):

(b) Definition of head of household.

(1) In general.
For purposes of this subtitle, an individual shall be considered a head of a household if, and only if, such individual is not married at the close of his taxable year, is not a surviving spouse (as defined in subsection (a) ), and either—

(A) maintains as his home a household which constitutes for more than one-half of such taxable year the principal place of abode, as a member of such household, of—

(i) a QUALIFYING CHILD of the individual (as defined in section 152(c), determined without regard to section 152(e)), but not if such child—

(I) is married at the close of the taxpayer's taxable year, and

(II) is not a dependent of such individual by reason of section 152(b)(2) or 152(b)(3), or both, OR

(ii) any other person who is a dependent of the taxpayer, if the taxpayer is entitled to a deduction for the taxable year for such person under section 151 , OR

(B) maintains a household which constitutes for such taxable year the principal place of abode of the father or mother of the taxpayer, if the taxpayer is entitled to a deduction for the taxable year for such father or mother under section 151 .

I stand to be corrected but I fail to see any requirement that the q.c. be a dependent. If I'm missing something please let me know. I've looked at the rest of §2 and see no other references to §152(c) where the q.c. is defined. Look at the IRC and let us know your thoughts.

NYEA,

So much is being said in this thread that I am having trouble following it. If you are saying that the mother can claim the QC as a dependent and the father can claim the QC for Head of Household in the same year, this is not what the IRS wants us to do. While I believe that it would make sense that the benefits can be claimed by multiple taxpayers, I have come to grips with the fact that the IRS does not want us to do that. This was discussed at length here:

ttp://www.thetaxbook.com/forums/showthread.php?t=916

This is how the IRS documents this on page 28 of Publication 17:

Sometimes, a child meets the relationship, age, residency, and support tests to be a qualifying child of more than one person. Although the child is a qualifying child of each of these persons, only one person can actually treat the child as a qualifying child. To meet this special test, you must be the person who can treat the child as a qualifying child.

If you and another person have the same qualifying child, you and the other person(s) can decide which of you will treat the child as a qualifying child. That person can take all of the following tax benefits (provided the person is eligible for each benefit) based on the qualifying child.

* The exemption for the child.

* The child tax credit.

* Head of household filing status.

* The credit for child and dependent care expenses.

* The exclusion from income for dependent care benefits.

* The earned income credit.

The other person cannot take any of these benefits based on this qualifying child. In other words, you and the other person cannot agree to divide these tax benefits between you.

If you and the other person(s) cannot agree on who will claim the child and more than one person files a return claiming the same child, the IRS will disallow all but one of the claims using the tie-breaker rule in Table 3-2.

The snippet you quoted where you added "as a dependent" is not how the IRS interprets the rule. The comment that the QC does not have to be a dependent to qualify you for Head of Household is a holdover from happier times but remains true. There are times when you cannot claim a QC as a dependent but you can claim Head of Household with that QC. However, you cannot claim Head of Household with a QC that anyone else has used for anything else except in the case of Divorced or Separated Spouses.

Most of this confusion comes from the fact that the IRS wanted a single definition of a Qualifying Child which applied for all five benefits but got five differnt definitions. What they are saying is if a child is claimed for any of the five benefits for any of the five definitions, no one else can use any of the other definitions to claim the child.

[Brian EA]

Bob,
He is single if Mom takes child.

But if he wants to push the issue he can take child and HOH because he wins tiebreaker rules with highest AGI.

Income is tie breaker rule because both had child for over half the year.

Someone correct me if I'm wrong?

GIANTS ARE THE SUPER BOWL CHAMPIONS. CONGRATULATIONS BOB, MY FAVOURITE TEAM WON.

We have to take the tie breaker rules in a special order.
The time spent with each parent comes first, followed with the highest AGI.
The child spent most of the time with the mom.
Unless the mom decides to give the exemption and HOH to dad ,he has got to file single

brian

[BOB W]

It is all very clear once I mentally grew up and realized that I had to look at the TIE-BREAKER rules first to apply the Flow Chart to that winner only.

Thanks Bees, I can always count on you. The other guys were great also but only 1 0r 2 were on the mark from the get-go.

It is funny, until we have a situation this stuff really doesn't sink in like it should.

Thanks to EVERYONE for their help. GO GIANTS........................

[Bees Knees]

You guys know that I'm no good at reading between the lines. I need it spelled out exactly. So if you please, can the Father take HOH if Mother claims the child as an exemption? OK I REREAD YOUR POST AND HAVE SETTLED DOWN>>> No HOH for dad, Mother takes it all because she wins the tie breaker (had child the longest).

This business of a flow chart showing infomation that assumes that another fact must first exist but doesn't say what the other facts are, is poor IRS writing. What is a stupid guy like me to do ( retorical).

The flow chart on page 3-18 DOES take the tie breaker rules into consideration.

Lets look at the father:

Q1: Was taxpayer unmarried, legally separated, or considered unmarried at the end of the year?

A: yes

Q2: Did taxpayer pay over half the cost of keeping up his or her dependent1 parent’s main home2 for all of the year?

A: no

Q3: Did taxpayer pay over half the cost of keeping up his or her own home in which he or she lived?

A: yes

Q4: Did another person live with the taxpayer for more than half of the year?

A: yes

Q5: Was this other person claimed as a dependent by the taxpayer?

A: It depends. If tie breaker rules give it to mom, the answer is no. If tie breaker rules give it to dad, the answer is yes.

You then continue on with the flow chart depending upon whether dad or mom claimed the dependency exemption under the tie breaker rules. Also, keep in mind that Dad could claim the dependency exemption even though tie breaker rule gives it to Mom, IF mom does not in fact actually claim the dependency exemption. The question on the flow chart is clear, in that it depends on who actually claims the dependency exemption. Not who is entitled to the exemption.

Is that clear?

[Jesse]

If boyfriend is father, and girlfriend is mother, and baby is in same house as father and mother over half the year, the baby is a qualifying child of both and tie breaker rules apply (TTB page 3-17).

Bob,
He is single if Mom takes child.

But if he wants to push the issue he can take child and HOH because he wins tiebreaker rules with highest AGI.

Income is tie breaker rule because both had child for over half the year.

Someone correct me if I'm wrong?

[BOB W]

Sorry, I did not read the rest of this thread. Not enough time.

If boyfriend is father, and girlfriend is mother, and baby is in same house as father and mother over half the year, the baby is a qualifying child of both and tie breaker rules apply (TTB page 3-17).

The chart on page 3-18 assumes you won the tie breaker rule, if two people would otherwise qualify for HOH. That is why it asks if the person is claimed as a dependent on pages 3-14 and 3-18. The tie breaker rules do not allow you to give the exemption to one parent and HOH to the other parent, unless the rules for divorced parents apply.

That is also why the only time the 5 benefits are split between mom and dad in the chart on pages 3-16 and 3-17 is when the rules for divorced parents kick in. All of the other scenarios have the benefit consistently going to only one person.

I think that might be what is confusing you here.

You guys know that I'm no good at reading between the lines. I need it spelled out exactly. So if you please, can the Father take HOH if Mother claims the child as an exemption? OK I REREAD YOUR POST AND HAVE SETTLED DOWN>>> No HOH for dad, Mother takes it all because she wins the tie breaker (had child the longest).

This business of a flow chart showing infomation that assumes that another fact must first exist but doesn't say what the other facts are, is poor IRS writing. What is a stupid guy like me to do ( retorical).