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My Qualifying Child Was Given To Non-Custodial Parent

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Latest post Fri, May 6 2016 3:41 PM by Drew. 13 replies.
  • Thu, May 5 2016 3:54 PM

    • LC78
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    My Qualifying Child Was Given To Non-Custodial Parent

    "H" is my step-daughter who lives SOLELY in my home with my husband (her father) and myself. "H" was 100% supported by me... not my husband... in 2014 because he was laid off for the entire year. "H" is the biological child of my husband and his exwife. "H" has zero contact with her bio-mom, zero visitation, and we do not receive any support from bio-mom for "H".

    "E" is my husband's youngest child with his exwife. "E" lives with his mom, and visits us on the weekends.

    In 2014, a family court judge ordered my husband to release his exemption claim to "H" if there was any child support debt for "E". No dollar amount was given. Even if DSER "batched" the weekly payment on Dec 30th, and it "appeared" to be an arrearage even for just one day, my husband was supposed to sign form 8332 and release "H's" exemption to his exwife. "Or else." This, by defintion, is a "conditional" and forced order.

    In 2014, that same year, my husband had been laid off, and did not work, and did not contribute to my support of "H" who lives with us solely. His exwife does not work, ever, and does not pay any support for "H". I supported "H" all on my own. I also paid, when I could, the child support for "E". Unfortunately a very small arrerage happened, which my husband paid down as quickly as he could once he found work. However, on Dec 31st, there was still a small amount of child support that showed as "unpaid."  When we did our 2014, I claimed Injured Spouse, as the IRS informed me was my federal right, and I claimed "H" as she passed all tests of my qualifying child. My husband did not claim "H", but he did not sign a form 8332 either because he felt since "H" was my qualifying child, he did not have the right to release her claim. When I did my taxes, it was rejected due to someone else claiming "H" social security number. I contacted the IRS who instructed me to file via paper, and confirmed "H" as my qualifying child. I even faxed the IRS the forced court order against my husband, and the IRS said it was not lawful to force the release of a custodial parent's exemption under the condition of unpaid child support - Publication 504. So I did as the IRS instructed and completed my taxes, claiming Injured Spouse, and "H" as my qualifying child. My husband's exwife just took my husband to court, lied under oath, stating that my husband claimed "H" when she was well aware he did not. And she asked the court to FORCE him to sign form 8332. The judge stated that despite "H" being my qualifying child, and not my husband's, he still must sign the 8332 form, "or else." So, under duress? my husband signed the form.  So what happens now? Will the IRS come after me and force me to amend my 2014 taxes even though "H" is clearly only my qualifying child, and not anyone else's? Will the IRS honor my husband's release of an exemption that he did not claim, that I did? Or will the IRS demand I sign the form 8332? Can the court do what they have done? Is that lawful? The IRS already stated once that "H" was my exemption and instructed the exwife to amend her taxes because "H" did not live with her and she did not provide any of "H's" support... 
  • Thu, May 5 2016 4:25 PM In reply to

    Re: My Qualifying Child Was Given To Non-Custodial Parent

    I can tell you this--if two taxpayers claim a qualifying child and one of the two is not a parent, the parent is the one that gets the deduction. I'd suggest you consult a tax attorney ASAP.

  • Thu, May 5 2016 4:38 PM In reply to

    • LC78
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    Re: My Qualifying Child Was Given To Non-Custodial Parent

    The IRS already said the qualifying child was mine though because I am a legal parent by federal law definition as stepparent, and because I was the only one who financially supported the child, and because she lives solely within my custody. Her bio-mom hasn't worked in over 9 years, doesn't pay taxes, and hasn't even seen my stepdaughter in over 3 years. The IRS isn't the problem here. They solved this when they instructed her to amend her taxes since the child does not qualify as her exemption. The family court is the problem... 

  • Fri, May 6 2016 8:38 AM In reply to

    Re: My Qualifying Child Was Given To Non-Custodial Parent

    LC78:

    "H" is my step-daughter. . . .

    "E" is my husband's youngest child with his exwife.

    I assume that H's mother and E's mother are not the same person.  Correct?

     

    LC78:
    In 2014, a family court judge ordered my husband to release his exemption claim to "H" if there was any child support debt for "E". No dollar amount was given.

    Not really sure why that would happen, but "any child support debt" means ANY amount greater than $0.

     

    LC78:
    When we did our 2014, I claimed Injured Spouse. . . .

    You apparently left out a word or two here.  Did you mean to write, "When we did our 2014 tax return" (singular) or "our 2014 tax returns" (plural).  Stated differently, did you file jointly or separately?

     

    LC78:
    My husband's exwife just took my husband to court, lied under oath, stating that my husband claimed "H" when she was well aware he did not.

    I highly doubt it was a lie.  Presumably, the IRS told her that YOU claimed H, and she assumed you filed a joint return such that there was no practical difference between your husband claiming H and you claiming her.  In any event, if you did file separate returns, I assume your husband had little difficulty proving that her claim was false by producing his own return that showed he did not claim H.  Right?

     

    LC78:
    So what happens now? Will the IRS come after me and force me to amend my 2014 taxes even though "H" is clearly only my qualifying child, and not anyone else's? Will the IRS honor my husband's release of an exemption that he did not claim, that I did? Or will the IRS demand I sign the form 8332? Can the court do what they have done? Is that lawful?

    It's not clear when the court made the order in question.  However, if the deadline to appeal the order has passed and your husband didn't appeal it, then it's a lawful order and whether or not it could have been reversed on appeal is no longer relevant.  If the deadline to appeal has not passed, then your husband should file an appeal if he thinks it would be appropriate to do so.  I don't know how long one has to appeal something like this in Maine, but appeal deadlines are typically very short (e.g., no more than a couple months after entry of the order).  As for what the IRS will do, based on what you wrote that people at the IRS told you, it seems like this should work out in your favor.

  • Fri, May 6 2016 11:21 AM In reply to

    Re: My Qualifying Child Was Given To Non-Custodial Parent

    Sounds like the Judge was not correct as under IRS guidelines the child lives full time with you, you should have been able to claim.

  • Fri, May 6 2016 11:43 AM In reply to

    • Drew
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    Re: My Qualifying Child Was Given To Non-Custodial Parent

    Does not add up to me as a mere layman

    But if court orders an 8332 , as hubby its smart to comply....

     

    Form 8332 is a release of claim not an assignment of claim 

    There are about 5 tests for dependency...mom still must pass the other 4. And It seems she flunks residency right out of the box? 

    OP...you are not a party to this...if you file separate and can lawfully claim child...so be it? 

    Just hubby cannot file joint ...



  • Fri, May 6 2016 1:22 PM In reply to

    • LC78
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    Re: My Qualifying Child Was Given To Non-Custodial Parent

    The difference is that although we file a joint return, my return, my income and exemptions, are filed under the Injured Spouse modification, which per the IRS, means that my exemptions and refunds are supposedly protected from any obligation or child support debt he might have. The IRS then looks into the calculations and releases to me whatever the IRS allocates is "mine" versus my husband's. The IRS allocated "H's" tax benefits to me.

     

    DSER routinely "batches" payments. Even in the electronic file it shows on what date the payment was made, and when it was "batched," and when it was "released." So because the court order did not stipulate a specific provision stating what constitutes a "debt" in this situation, when his payment is made on time, but batched and held by DSER for up to a week, it creates the appearance of a debt that truly is not a debt at all.

    The court made this order yesterday, on Thursday 5/5/16. And yes, my husband plans to appeal. And I have been making efforts to contact the IRS law agent I dealt with in 2015 to see what my options are at this time. 

  • Fri, May 6 2016 1:23 PM In reply to

    • LC78
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    Re: My Qualifying Child Was Given To Non-Custodial Parent

    She lives solely with me. No visitation to the bio-mom. I fully supported the child in 2014, by myself, and carried her medical and dental insurance on my own. I am also the highest AGI taxpayer since biomom is the classic welfare queen and does not work, and in 2014, my husband was laid off for 10 months of the year. On literally all tests that classify a qualifying child, she was mine to claim. 

  • Fri, May 6 2016 1:26 PM In reply to

    • LC78
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    Re: My Qualifying Child Was Given To Non-Custodial Parent

    Hubby did comply because the court threatened jailtime if he did not... despite him showing my tax filing which showed he did not claim the child, I did. Form 8332 was signed by hubby, and released the claim to his exwife. 

    Mom has had to amend her taxes 3 times before because she routinely lies in order to get tax exemptions she is not lawfully entitled to.... the child does not reside with her at all, not a single overnight in almost 3 years now... Mom does not work, collects welfare benefits, and does not pay child support for the child... Mom does not work and therefore has no AGI to compare to the highest... the only "test" mom passes is that she is a parent of the child. 

  • Fri, May 6 2016 1:28 PM In reply to

    • LC78
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    Re: My Qualifying Child Was Given To Non-Custodial Parent

    Per the IRS, I am a legal parent because I am her stepparent and "de facto" parent... and I am the only parent out of the 3 of us who worked in 2014 and paid taxes and supported the child, who also only lives with me and my husband. 

  • Fri, May 6 2016 1:36 PM In reply to

    Re: My Qualifying Child Was Given To Non-Custodial Parent

    LC78:
    The difference is that although we file a joint return, my return, my income and exemptions, are filed under the Injured Spouse modification, which per the IRS, means that my exemptions and refunds are supposedly protected from any obligation or child support debt he might have. The IRS then looks into the calculations and releases to me whatever the IRS allocates is "mine" versus my husband's. The IRS allocated "H's" tax benefits to me.

    That's all well and good, but there's still a joint return to which your husband is a party and which claims the child as a dependent. Therefore, his ex's allegation that "he" claimed her wasn't a lie, and he probably violated the court's order.  Under the circumstances, you might have been better off to file separate returns.

  • Fri, May 6 2016 1:54 PM In reply to

    • LC78
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    Re: My Qualifying Child Was Given To Non-Custodial Parent

    Except that because it was an "Injured Spouse" filing, the "joint" portion did not occur because the IRS determines who qualifies for the child's exemption.... so technically, neither he nor I "claimed her." The IRS apportioned her tax exemption to me, and me alone, secured by my injured spouse status, mailed the check in my name only, because my husband did not provide any of her support. 

    I really wish tax law was better explained because it seems lawyers and judges alike don't fully comprehend how the IRS works... and when a taxpayer is dealing with the IRS, the IRS informs the taxpayer of how things are going to do.... but then you get before a uninformed judge, who doesn't much understand federal tax law, or how things works with the IRS, and the taxpayer is the one screwed. Perhaps federal law and state law should come to a better understanding and compromise so everyone is on the same page. 

     

  • Fri, May 6 2016 3:31 PM In reply to

    Re: My Qualifying Child Was Given To Non-Custodial Parent

    The rules are complex, but it boils down to this: both you and your husband were eligible to claim the exemption for the child on the return as a qualifying child. Had you filed separate returns, your husband would have been the one to get the exemption because the tax law says that parents of the child get priority over anyone else in claiming the exemption if they are eligible to claim the child as a qualifying child. Internal Revenue Code (IRC) § 152(c)(4)(A)(i). Because you filed a joint return this didn't really matter as between you and your husband.

    Your husband may elect to give his exemption to his ex-spouse by giving her a proper waiver in which he agrees not to claim the exemption and instead allowing her to claim it. IRC § 152(e). By doing that, she becomes eligible to claim the child as her qualifying child rather than him. But while you also qualifed to claim the child as a qualifying child only one of you gets to claim the exemption. And under the parent first rule I mentioned in the paragraph above, the exemption would go to your husband’s ex once he signed the 8332.

    The state court has the power to order him to execute the Form 8332. Nothing in federal tax law prohibits the court from doing that. If your had husband failed to execute the Form 8332 after the court ordered it, he could have been held in contempt and penalized by the court.

    So the bottom line here is that your husband, as the parent of the child who lives with the child all year is the one who ultimately controls who gets the exemption. And once he signed the 8332, the exemption went to his ex and disqualified you and your husband from getting it on your joint tax return. I expect the IRS will end up adjusting your return to account for that once his ex provides the 8332 to the IRS.

    I can understand that you may not feel this is fair since you provided the earnings that actually supported the child. But the rules are set to favor the parents of the child.

  • Fri, May 6 2016 3:41 PM In reply to

    • Drew
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    Re: My Qualifying Child Was Given To Non-Custodial Parent

    All well and good, but hubby needs to take great care not to violate the precise language of order as it applies to him ....and the mere filing of a joint return might be seen as a violation of stuff we are not reading.....but as posted, if the final order say dad signs a 8332 then so be it...until and unless the order gets changed.,

    If under some other steps,you are entitled to,file,and claim child ..well so do so. 

     

    I dont  see what federal  tax benefit there is for Mom to,get dependents claimed ....but she is entitled to be tax dumb? 

    if mom is claiming things she is not properly entitled to claim ...you can report same to IRS ...doubt it will matter much ..but hey....



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