Dependency Exemptions For Non-Custodial Parents - Irs Form 8332

Exemption - Dependency Exemptions For Non-Custodial Parents - Irs Form 8332

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The Internal wage aid released a memorandum on June 19, 2009, clarifying the rules governing non-custodial parent's potential to claim a dependency exemption for their child.

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Exemption

Previously, the aid allowed a non-custodial parent to claim an exemption for a child if the custodial parent signed a written declaration releasing claim to the exemption and the non-custodial parent attached that declaration to their return. Irs Form 8332 is ready to document this release. In Publication 501, Exemptions, suitable Deduction, and Filing Information, the aid has stated that a non-custodial parent may attach positive pages of a disjunction decide or disjunction agreement, instead of Form 8332, if the attached pages comprise the information required on the form.

A question arose in the ambiguous language of the actual code. It stated the issue of a claim must be on Form 8332 or, if not on such form, must "conform to the substance of such form." The ambiguity begat creativity and family law attorneys began drafting the declarations into hamlet agreements. Taxpayers would then naturally need to attach a copy of their disjunction decree. This eliminated the need for Form 8332 and therefore, the need to speak to your ex-spouse every year requesting a signature.

The recent memorandum was directed specifically at the interrogate either it was proper for a parent who does not have custody to prove their right to the exemption by submitting proof of pleasure of a condition in a disjunction decree. The condition was that the non-custodial parent may only claim the exemption if current in his or her keep obligation. This raises the question of substantiation.

In the June 19 memo, the aid closed the issue must be on Form 8332 or must be a document conforming to the substance of Form 8332 and has as its only purpose the issue of a claim to exemption. A disjunction decree, disjunction trade or parenting plan allowing a non-custodial parent to claim an exemption for a child, only if a condition is met, does not conform to the substance of Form 8332. For tax years beginning after July 2, 2008, a hamlet agreement, decide or judgment may not be used by a non-custodial parent to substantiate a dependency exemption for a child, even if accompanied by a statement intending to show the condition in the decide or trade was met.

These regulations reflect the Service's concern about substantiating a claim to a dependency exemption for a child and are intended to avoid problems of proof, minimize controversy, and minimize costs to parents. The change does not preclude a non-custodial parent from claiming the exemption; it naturally requires more care be made to make sure this is accomplished.

It may be helpful to comprise language stipulating the custodial parent will execute Form 8332 on a yearly basis. This corollary up challenge can be alleviated by insuring the newly single parents consult a financial advisor with exact taste in the field of disjunction financial planning. Two parents claiming an exemption for the same child will end in Irs audits for both and possibly bring a placed case back into the courtroom. The aid has clearly stated it is not proper to comprise any language that could want substantiation.

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