Conference Report on UDC

[Koss]

The text of the conference report on the WFTRA legislation reads as follows:

The senate amendment generally permits taxpayers to continue to apply the present-law dependency exemption rules to claim a dependency exemption for a qualifying relative who does not satisfy the qualifying child definition.

At one point, this notion was actually referred to as a safe harbor in the new law. In other words, if you could claim a dependent under the old set of five tests, you could still do so under the new law.

One scenario similar to the "twin brothers" puzzle that Doug Lee came up with is this:

28 year old single mother has two kids in her home, and lives with her boyfriend. One child is hers; the other is not. Boyfriend is the father of both children; she is the mother of only one. Boyfriend goes away to prison or dies. Taxpayer continues to care for and support her boyfriend's child.

Qualifying relative, right?

Wrong.

The woman's son is the half-brother of her boyfriend's son.

Her boyfriend's son is her son's qualifying child. Therefore, her boyfriend's son cannot be her qualifying relative.

Unless you read the conference report, and the text of the law. This is clearly not what Congress intended.

Here's the link to the conference report, thanks to Bill Tubbs:

http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=108_cong_reports&docid=f:hr696.108.pdf

Burton M. Koss
koss@uskoss.net

https://www.usakoss.net

[Bees Knees]

I agree the conference report and the actual code say two different things. However, the conference report is only considered when the courts determine the code to be vague or in-conclusive. Until the law is challenged in court, or a specific aspect of the law is challenged, the IRS will use their own interpretation of the code to administer the law.

[jainen]

violates local law

Mr. Lee is a clever guy, but I don't accept his challenge.

A child can not be left without a parent or guardian. It is up to a court (using CPS or another agency) to decide where the child should live and who is responsible. If the girlfriend wants custody, she can apply, and when she becomes the foster parent or guardian she can claim the exemption as if it were her own child. Otherwise the relationship violates local law.