IMPORTANT TAX INFO - PLEASE READ!

[Brent]

January, 2004
PLEASE NOTE:

The Internal Revenue Service has (once again) changed its interpretation of the law regarding the "special support test for divorced and separated parents."

The "Tax Tip for Never Married Dads"  (http://www.deltabravo.net/custody/irs.htm) that previously appeared at this website, explaining the circumstances in which a never-married non-custodial parent of a child born out-of-wedlock could claim the child dependency exemption, should be disregarded.

For the past several years, it was the official Internal Revenue Service (IRS) position that the entitlement to claim the tax exemption for a child of never-married parents was not controlled by the "special support test" (commonly known as the "custody rule") but rather by the "regular support test" (taxpayer must have provided more than 50% of the dependent's total support).

That has now (once again) changed. Effective with the 2003 tax year, IRS now says the "custody rule" DOES apply to never-married parents. The change of IRS position is apparently the result of the decision of the US Tax Court in the case of King and Lopez v. Commissioner, 121 TC #12 (9/26/2003) (http://www.ustaxcourt.gov/InOpHistoric/ki7ng2..TC.WPD.pdf), which gave a revised interpretation to Internal Revenue Code § 152(e)(http://www4.law.cornell.edu/uscode/26/152.html), the law creating the "special support test" for divorced and separated parents.

So, for tax years 2003 and thereafter ............

The "Tax Tip for Never Married Dads" (http://www.deltabravo.net/custody/irs.htm)that previously appeared at this website, explaining the circumstances in which a never-married non-custodial parent of a child born out-of-wedlock could claim the child dependency exemption, should be disregarded.

In view of the US Tax Court decision in the King/Lopez case and in view of the recent change of the IRS position, a non-custodial never-married parent should NOT claim the child as a dependent (regardless of how much support was paid) UNLESS the non-custodial parent's tax return is accompanied by a completed IRS Form 8332 signed by the custodial parent.

LAWRENCE D. GORIN
Law Offices of L.D. Gorin
521 S.W. Clay St., Suite 205
Portland, Oregon 97201
Phone: 503-224-8884 (afternoons, Pacific time)
Fax: 503-226-1321
E-mail: [email protected]

[patton]

The tax person I talked with at the IRS was VERY helpful on this situation.

He asked a lot of questions and if you can answer YES  basically to all of them you can count your child.

My concern was when custody changed from non-custodial to custodial during the year.

Case Scenario: Father was non-custodial and had child for summer visitation from June 15 thru July 31. Father was awarded sole or primary custody as of July 24, 2003.

Father NOW has signed paperwork by both parents, attorneys, Judges, and attorney general's office that can be used as proof of custody.

Father can count child on his taxes and EIC if afflicable.

If you are still unsure, call the IRS 1-800-829-1040 and tell them what you are wanting to do and they will help you out.  When the person answers they give you their name and their ID number.  I assume you are being recorded but they do not tell you that.


patton