DIVORCE DECREE IGNORED
Tax Court Agrees with IRS –
Internal Revenue Code Overrides Divorce Decree
Divorcees Need Both Legal AND Tax Advice
The divorce decree stipulates which of the divorced parents can claim the child. Some divorce settlements, with the objective of being fair, stipulate that the parents will alternate between tax years who can claim the child as a dependent.
In the case of Devin G. Seeliger, TC Memo 2017-175, the taxpayer (father) received an IRS notice of deficiency because the IRS found that he could not claim his daughter as his dependent. He was therefore not eligible to claim the child tax credit and could not file using the Head of Household status. The taxpayer disagreed with the IRS’s findings because his divorce decree clearly stipulated that he could claim his daughter in the odd years. The Tax Court found in favor of the IRS.
The facts of this case were that the minor child lived the majority of days with her mother. In accordance with the Internal Revenue Code (IRC), the minor child is a qualifying child of the mother only, regardless of what the divorce decree states. Accordingly, only the mother is the custodial parent and the only parent eligible to claim all child-related tax benefits. However, custodial parents can release their right to claim any qualifying child. The court found that the stipulation from the divorce decree [Read more…] about Internal Revenue Code Overrides Divorce Decree