Qualifying Child for parents never married

[Bill Tubbs]

In the situation where 2 people, never married, not currently living together, have a child together...
(yes, I have a client coming in today that has a child and was never married, but I don't know if she lived with the child's father at all last year)

Sec 152(e) is "Special Rule for Divorced Parents"
According to Sec 152(e)(1)(A):
" (A) a child receives over one-half of the child's support during the calendar year from the child's parents--
(i) who are divorced or legally separated under a decree of divorce or separate maintenance,
(ii) who are separated under a written separation agreement, or
(iii) who live apart at all times during the last 6 months of the calendar year, and
"

Looks like if they lived together at all during the last 6 months of the year, that the non-custodial parent cannot claim the child as a QC (for example, they lived together April 2005 - Aug 2005). But, if they lived together Jan 2005 - Jun 2005, then split, the non-custodial parent could then claim the child as QC under 152(e)(1)(A)(iii).

At least that's what I see in the law. However, Pub 501, page 16-17 talks about "Support Test for Children of Divorced or Separated Parents". On page 17:
"Parents who never married. This special rule for divorced or separated parents also applies to parents who never married."

Pub 501 seems to be more generous than the law itself, at least in the case where father & mother lived together April-August 2005 (5 months).

Thoughts?

[jainen]

IRS isn't being generous

IRS isn't being generous. They lost in court.

[Bees Knees]

Actually, the code itself does not limit this rule to divorced parents. It is entitled “Special rule for divorced parents,” but code section titles do not carry any weight when the language in the code says otherwise. If parents have never been married, and are now living apart, they meet the terms under Section 152(e)(1)(A)(iii), “who live apart at all times during the last 6 months of the calendar year.” It doesn’t say they originally had to be married to each other.

[Bill Tubbs]

I got it now

OK, after re-reading Pub 501, I now think that the Pub does match the law...

On page 17:
"Parents who never married. This special rule for divorced or separated parents also applies to parents who never married."

But, part of the "rule" is 1.c. on page 16 "Lived apart at all times during the last 6 months of the year".

As Jainen (on another board) said: "If the parents lived together during the last half of the year, and the custodial parent wants to release the exemption to the other, they need an official document like a divorce decree or legal separation agreement."

So, let's say baby born Aug 1. If man and woman were living together and the father moved out Oct 1 -- the baby would be a QC of the mother, but not be a QC of the father. If the parents were married and got a separation agreement before Dec 31, then the father could claim the baby as QR according to the rules -- but, if the couple was never married, then the father would not have a QC nor QR.

Bill

[Unregistered]

IRS isn't being generous. They lost in court.

anyone have any clue what this means?

BTW since the parents you were discussing ARE NOT divorced it does not apply to them. Seems odd that some one so obsessed with the law, misinterprets it (being very kind here) at almost every occasion.

[jainen]

court's ruling

The issue was settled in tax court, whether the special rule applied to parents who had never been married. The case involved a single mother who signed an 8332 for all future years. Later she married someone else and tried to claim the children, who lived with her. The kids didn't like the new family arrangements so they boogied over to Dad's place, and the IRS issued a Notice of Deficiency to the mother and another one to the father. I'm not sure if this counts as the IRS losing, but anyway they had to re-write their instructions to comply with the court's ruling.