In a recent court case between Mark Skitzki and the Internal Revenue Service, the United States Tax Court ruled that he was not entitled to claim the dependency exemption deduction, head of household filing status, or child tax credit. He was not allowed to claim these deductions because he did not have Form 8332, which is a Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent.
Details of Form 8332 Tax Case
Due to a change in custody agreement stemming from divorce, which gave Ex-Wife over one-half the nights with child, who was therefore, not considered a qualifying child, the U.S. Tax Court held in a memorandum opinion.
Taxpayer had one minor child, which he was allowed to claim as a dependent for even years, according to a shared parenting plan. However, the divorce decree stated Taxpayer would claim the child as a dependent in odd years.
The child spent six out of every 14 nights during the school year with Taxpayer, as well as every other week during the summer. Taxpayer claimed the child as a dependent in 2008, 2010, and 2012. On his 2014 return, he claimed a dependency exemption deduction, head of household filing status, a child tax credit, an additional child tax credit, and an earned income tax credit.
Taxpayer failed to include a Form 8332 with his return. The court first held that the child wasn’t a qualifying child or qualifying relative of Taxpayer for 2014 because he resided with his mother for more than one-half of 2014 and therefore did not share his principal place of abode with Taxpayer for that year.
The court stated that under the exception for noncustodial parents in divorce, the child could not be counted as a dependent because Taxpayer didn’t have a written declaration. Additionally, because Taxpayer did not have a qualifying child for 2014 and was not entitled to the dependency exemption deduction, he was also not entitled to claim head of household filing status or the child tax credit.
Taxpayer would have been eligible to claim the earned income tax credit, but his income was too high to qualify.
You click this link to see the full Form 8332 Tax Court Case