For over 50 years, Bloomberg Tax’s renowned flagship daily news service, Daily Tax Report® has helped leading practitioners and policymakers stay on the cutting edge of taxation and...
By Erin McManus
Aug. 10 — Despite a record of dutiful child support payments and a divorce court order allowing him tax benefits, a father couldn't claim deductions and credits for children who didn't live with him ( Cappel v. Commissioner , T.C., No. 4920-15, T.C. Memo. 2016-150, 8/10/16 ).
U.S. Tax Court Judge Albert G. Lauber ruled Aug. 10 that Paul Anthony Cappel couldn't claim dependency exemption deductions, head-of-household filing status and child tax credits, because two children from his first marriage and another child from his second marriage didn't live with him during the tax year at issue.
Although a state court order said Cappel could claim the dependency exemption for his first two children if he remained current with his child support obligations, he never obtained an executed Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent, from his first wife. He also failed to obtain a Form 8332 from his second wife.
Lauber said Cappel couldn't claim the deductions, filing status and credits without the executed form if the children didn't reside with him.
Cappel “has acted honorably in paying child support for many years, but his ex-wife has apparently claimed two of their children as dependents in violation of a Florida court order. But while the result may seem harsh in these circumstances, the law is unfortunately clear. On the record before us, we have no alternative but to sustain” the Internal Revenue Service's determinations, Lauber said.
To contact the reporter on this story: Erin McManus in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Cheryl Saenz at email@example.com
Text of the decision is in TaxCore.
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)