People going through a divorce or child support modification in Maryland should be aware of the recent case of a divorced man who got an unpleasant surprise from the IRS, and an unfavorable ruling from the court on the issue. The man and his ex-wife had agreed that she would be the primary custodial parent and he would pay a determined amount of child support each month, but that he would be allowed to take the dependent child exemption on his taxes.
The problem came when the woman failed to sign a critical IRS document, form 8332, releasing her claim to take the child dependency exemption. When the man filed his taxes claiming the exemption as his own, he was dismayed to learn that his ex had not signed the correct form and as a result he was unable to take the exemption and had to pay up.
The tax court acknowledged the state court child support agreement, but still held that this did not suffice as evidence for the purpose of the man claiming the exemption. The court found that "the Internal Revenue Service cannot be expected to police divorce decrees and separation agreements or determine taxpayer compliance therewith."
There may be a solution to this, which would be to require, as part of a child support order, that the parent required to file the form should do so at their own peril. In other words, if the parent forgets, they should be on the hook for the damages they cause, not the innocent parent who was following the court order.
Child support enforcement is an ongoing aspect of post-divorce life for many couples, and requires the counsel of an experienced family law attorney who knows the ins and outs of state and federal child support laws.
Source: Bloomberg BNA "Divorce and the Child Dependency Exemption," Kathleen Ford Bay, March 1, 2013