“What will happen if I claim my daughter as a dependent (which is my right according to our signed decree) for 2007? Will my tax return get rejected?”
You don’t say with whom the daughter lived with for the greater part of the year. If it was your ex-wife, then she is the custodial parent and the one eligible to claim the dependent exemption on the return unless she gives you a waiver saying she will not claim the exemption and thus allowing you to claim it. This waiver can be done on Form 8332. If this is your situation, then the divorce decree won’t matter to the IRS unless it was signed by your ex-wife and meets all the requirements of the waiver. The judge’s signature is irrelevant because federal tax law only looks at the waiver, not the decree. The bottom line is that in this situation, you’d likely have to go to court to get an order requiring her to give you the waiver.
If you are the custodial parent, though, then you can claim the exemption. If she filed electronically first, then your return will be rejected if you also file electronically. You can, however, file a paper return and get it accepted. Then when the IRS computers later match the returns, it will send out letters to both of you asking you each to justify your claim the exemption. The one that is not entitled to the exemption will have additional tax to pay, along with interest and perhaps a penalty.