In Uncategorized on 06/30/2020 at 16:25

Rebecca L. Bethune, 2020 T. C. Memo. 96, filed 6/30/20, loses her HOH, dependency and child tax credits, because Kirby, her loved-once, played the above-captioned on her.

Rebecca and Kirby were splitsville, but amended their divorce decree, which originally said nothing about who got the tax breaks for their four (count ’em, four) offspring, two adults and two minors. They amended in the year after the year at issue.

Rebecca took both minors for year at issue, even though they lived with Kirby for the whole year.  And the acknowledged divorce decree amendment said that she could.

What it didn’t say was that Kirby wouldn’t. So when IRS hit Rebecca with a SNOD two years later and she proffered the amended divorce decree, a helpful IRS employee told her to get a Form 8332 from Kirby. Rebecca never heard of a Form 8332; I wonder if she had an attorney, and, if she did, whether that attorney ever had.

So Rebecca went off, got hold of Kirby, and had him sign the Form 8332.

But the helpful IRS employee didn’t tell Rebecca that if Kirby had taken the minors on his return for year at issue, any Form 8332 he signed was worthless unless accompanied by an amended return handing back whatever benefits he took.

See my blogpost “‘I’m From The Government And I’m Here To Help’ – Part Deux,” 3/19/15.

Kirby claims he never signed nuthin’, but Rebecca’s circumstantial testimony convinces Judge David Gustafson that ol’ Kirby’s fibbing. Unhappily, Kirby had taken the minors and never amended.

Sorry, Rebecca.

IRS claims that, even if Kirby signed the Form 8332, it wasn’t attached to Rebecca’s return for year at issue. Now my ultra-sophisticated readers are doubtless exclaiming “But Sec. 1.152-5(e)(2)(i), Proposed Income Tax Regs., 82 Fed. Reg. 6387 (Jan. 19, 2017) says you can hand in a Form 8332 at exam.” Of course proposed regs don’t bind the Court, and are just guidance.

And the “attached” question really applies only in the electronic filing context.

” However, the provisions for electronic filing are not applicable here, where Ms. Bethune filed a paper return, and the provisions for submission during examination are not applicable here, where the custodial parent never relinquished the dependency exemption deduction. The applicable, operative rule is that Ms. Bethune had to ‘attach’ the Form 8332 to her return, but she did not do so. Consequently, she is not entitled to the dependency exemption deductions….” 2020 T. C. Memo. 96, at p. 16.

Of course we remember Judge Holmes’ syntactical macarena in my blogpost “Swift, Light and Unattached,” 12/19/12.

But I go back to an old story. Child care tax breaks are complicated. Quick-and-dirty split-the-years solutions don’t stand up. Family lawyers, read and heed.




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