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THE SUPREME COURT OF THE STATE OF ALASKA
KARLEE A. DODGE, f/k/a )
Karlee A. Sturdevant, ) Supreme Court No. S-15212
)
Appellant, ) Superior Court No. 4FA-11-02089 CI
)
v. ) OPINION
)
FRANK W. STURDEVANT III, ) No. 6958 – October 10, 2014
)
Appellee. )
)
Appeal from the Superior Court of the State of Alaska,
Fourth Judicial District, Fairbanks, Bethany Harbison, Judge.
Appearances: Craig B. Partyka, Cook Schuhmann &
Groseclose, Inc., Fairbanks, for Appellant. Margaret
O’Toole Rogers, Foster & Rogers, LLC, Fairbanks, for
Appellee.
Before: Fabe, Chief Justice, Winfree, Stowers, Maassen, and
Bolger, Justices.
WINFREE, Justice.
I. INTRODUCTION
The superior court ordered that divorced parents each claim one of their two
children for the federal income tax dependency exemption. Both children resided
primarily with the mother, and the court ordered her to sign and file a federal form
waiving her exemption for one child. The mother appeals, arguing the superior court
lacked authority to order her to sign the waiver form. We adopt the majority view that
a custodial parent may be ordered to sign the waiver form, and affirm the court’s order.
II. FACTS AND PROCEEDINGS
Karlee Dodge and Frank Sturdevant entered into a partial settlement
agreement as part of their divorce proceeding. The agreement provided that they would
share legal custody of their two children, but that Dodge would have primary physical
custody. The superior court then held a trial to determine several unresolved financial
issues, including who would claim the children as dependents for federal income tax
purposes.
The superior court issued an order for Dodge and Sturdevant each to claim
one child for the federal income tax dependency exemption. The court made clear that
“[t]he parties, specifically [Dodge], are required to comply with all IRS rules and
regulations necessary to implement this Order. Specifically, [Dodge] is required to
complete and sign IRS Form 8332 annually.” Dodge filed a motion to stay the superior
court’s order, arguing that the order “is contrary to, and inconsistent with, federal law”
because her signature on Form 8332 would not be voluntary. The court denied Dodge’s
motion.
Dodge appeals the order requiring her to sign Form 8332.
III. STANDARD OF REVIEW
Whether the superior court has authority to order a parent to sign Form
8332 is a question of law.1 We review questions of law de novo, applying our
1
See State, Dep’t of Revenue v. Deleon, 103 P.3d 897, 898 (Alaska 2004)
(reviewing de novo whether superior court had authority to order party to apply for
permanent fund dividend).
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independent judgment and adopting the rule of law most persuasive in light of precedent,
reason, and policy.2
IV. DISCUSSION
A. Brief Statutory And Regulatory Background.
The federal tax code creates a dependent exemption 3 and a special rule for
divorced parents concerning which parent may claim the exemption.4 The current code
provides that a parent who has custody of a child for more than half the year is entitled
to the dependent exemption.5 But the custodial parent may waive the exemption by
2
State v. Schmidt, 323 P.3d 647, 655 (Alaska 2014) (quoting State v.
Anthony, 810 P.2d 155, 156-57 (Alaska 1991)).
3
26 U.S.C. § 151(c) (2012).
4
26 U.S.C. § 152(e).
5
Id. The current version of § 152 was enacted in 1984 and amended in 2004
and 2005. Gulf Opportunity Zone Act of 2005, Pub. L. No. 109-135, § 404(a), 119 Stat.
2577, 2633-34 (codified as amended at 26 U.S.C. § 152(e)); Working Families Tax
Relief Act of 2004, Pub. L. No. 108-311, § 201, 118 Stat. 1166, 1172-73; Tax Reform
Act of 1984, Pub. L. No. 98-369, § 423, 98 Stat. 494, 799-800. Before the current
version took effect on January 1, 1985, the tax code allowed state courts to allocate a
dependent exemption through a divorce decree; the 1984 revision removed this
discretion and instead provided the exemption to the custodial parent unless the custodial
parent signed a waiver. See Monterey Cnty. v. Cornejo, 812 P.2d 586, 588-89 (Cal.
1991); Cross v. Cross, 363 S.E.2d 449, 458 (W. Va. 1987). The short-lived 2004
amendment again allowed state courts to effectuate a dependent exemption allocation in
a divorce decree. See Working Families Tax Relief Act of 2004 § 201. But the 2005
amendment again eliminated state courts’ authority to use divorce decrees to effectuate
the exemption allocation, requiring the use of a waiver form instead. See Gulf
Opportunity Zone Act of 2005 § 404(a).
Although both parties discuss Ginn-Williams v. Williams, that case involved
the 2004 version of § 152(e) and is inapplicable to the present legal question. See 143
P.3d 949, 955 n.11 (Alaska 2006).
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signing a written declaration, which then must be attached to the non-custodial parent’s
tax return for the non-custodial parent to receive the exemption.6 Federal regulations
require that the custodial parent waiving the exemption complete IRS Form 8332 (or a
similar declaration), declaring that the custodial parent will not claim the exemption and
naming the non-custodial parent to whom the exemption is released.7 The IRS will not
provide the exemption to a non-custodial parent unless Form 8332 is submitted or one
of the narrow exceptions, not relevant here, is met.8
B. Form 8332 And The Associated Code And Regulations Do Not
Explicitly Bar Court-Ordered Signatures On Form 8332.
Dodge argues that Form 8332’s language creates a requirement that the
custodial parent’s signature on that form be made voluntarily. Form 8332 requires the
custodial parent to “agree not to claim an exemption” and provides the option of
revoking the waiver. But nothing in the text of Form 8332, the tax code, or the federal
regulations explicitly requires that a signature be purely voluntary. The United States
Tax Court has held to the contrary. In George v. Commissioner, a Virginia trial court
had ordered a custodial parent to sign Form 8332.9 The parent signed the form and did
not receive the exemption, but then argued that the IRS should disregard the waiver
because “the threat of judicial contempt if she did not comply and sign” constituted
6
26 U.S.C. § 152(e)(2).
7
Treas. Reg. § 1.152-4(e) (2014).
8
See Treas. Reg. § 1.152-4(a), (b)(3)(ii).
9
139 T.C. 508, 511 (2012).
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“duress.”10 The tax court rejected that argument, concluding that a state court order to
sign Form 8332 did not constitute duress and therefore the parent’s form was valid.11
Although the IRS has not issued an opinion resolving this question, an
example in the IRS regulations directly supports the conclusion that federal law permits
court-ordered signatures on Form 8332. The example states:
W and X are the divorced parents of Child. In 2009, Child
resides solely with W. The divorce decree requires X to pay
child support to W and requires W to execute a Form 8332
releasing W’s right to claim Child as a dependent. W fails to
sign a Form 8332 for 2009, and X attaches an unsigned Form
8332 to X’s return for 2009.[12]
The example shows that the divorce decree, coupled with submission of an unsigned
Form 8332, is insufficient to allocate the right to claim the dependent exemption.13 But
the example clarifies that if W had signed Form 8332 pursuant to the divorce decree, the
waiver would be valid and X would be entitled to the exemption.14 The validity of a
court-ordered signature is further supported by Sanchez v. Commissioner, where the
United States Tax Court addressed the situation suggested in the regulation example and
stated: “If [a] former spouse refused to sign and provide the required Form 8332 in time
for [petitioner] to file his 2006 federal income tax return, petitioner’s recourse was to the
10
Id. at 515.
11
Id.
12
Treas. Reg. § 1.152-4(g) Example 18.
13
Id.
14
Id.
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state courts to have them enforce the Texas state court order.”15 The court’s express
contemplation of a court-ordered signature on Form 8332 indicates that nothing in the
associated code or regulations renders such a signature invalid.
C. The Majority Rule Allows Trial Courts To Order A Party To Sign
Form 8332.
Although Dodge is correct that some states hold otherwise,16 the majority
rule is to allow trial courts to order custodial parents to sign Form 8332.17 The California
Supreme Court case Monterey County v. Cornejo provides a straightforward and
compelling rationale for the majority rule.18
15
T.C. Summ. Op. 2009-167, at *2 n.2 (Nov. 12, 2009).
16
See Blanchard v. Blanchard, 401 S.E.2d 714, 715-17 (Ga. 1991); Brandriet
v. Larsen, 442 N.W.2d 455, 457-60 (S.D. 1989).
17
Monterey Cnty. v. Cornejo, 812 P.2d 586, 589 (Cal. 1991) (collecting cases
and stating, “Since the amendment to section 152(e), the vast majority of jurisdictions
considering the issue have concluded that state courts retain jurisdiction to allocate
dependency exemptions to noncustodial parents.”); Harris v. Harris, 760 So. 2d 152,
153 (Fla. Dist. App. 2000) (“The majority view nationwide now holds that the Tax
Reform Act does not prohibit state courts from ordering the custodial parent to execute
[Form 8332].”); see, e.g., Fleck v. Fleck, 427 N.W.2d 355, 359 (N.D. 1988) (“[W]e
believe the trial court has authority to order the custodial parent to execute consent forms
assigning the income tax dependency exemption to the non-custodial parent . . . .”);
Cross v. Cross, 363 S.E.2d 449, 458 (W. Va. 1987) (“Indeed, under the new IRC
§ 152(e) a state court does not have the power to allocate the exemption simply by court
order alone (as it could have done before the 1984 Amendment), but it does have the
equitable power to require the custodial parent to sign the waiver.”).
18
812 P.2d at 588-92. The version of § 152(e) applied in that case was
identical in all relevant aspects to the current version. Compare 26 U.S.C. § 152(e)
(1988), with 26 U.S.C. § 152(e) (2012).
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In that case a trial court allocated the dependent exemption to the non-
custodial parent and noted that the custodial parent would have to sign the waiver.19 The
county (on behalf of the custodial parent) appealed, arguing that the trial court had no
authority to allocate the federal tax exemption.20 But the California Supreme Court
concluded that the trial court had authority to allocate the exemption and to order the
custodial parent to sign the required waiver form.21
The court articulated three reasons for its decision. First, the court
determined that nothing in the plain language of the tax code or federal regulations
prohibited state courts from ordering a custodial parent to sign the waiver, so the
equitable power of state courts to order the waiver would not interfere with any
congressional purpose in providing the waiver.22 The court explained that the legislative
history of the 1984 amendments demonstrated that the new § 152(e) was enacted to
“ ‘enhance the administrative convenience of the IRS,’ ” and state courts therefore
retained their traditional power of allocating the exemption.23
19
Monterey Cnty., 812 P.2d at 588, 592 n.7.
20
Id. at 588.
21
Id. at 592; see also id. at 590 (“[S]tate trial courts retain the authority to
allocate the dependency exemption by ordering the custodial parent to execute the
necessary waiver.”). The court remanded for “the trial court to make clear that [the
custodial parent] is to execute the requisite declaration in consideration of the increased
child support she will be receiving.” Id. at 592.
22
Id. at 590 (“ ‘The new statute is entirely silent concerning whether a
domestic court can require a custodial parent to execute a waiver . . . .’ ” (emphasis in
original) (quoting Cross, 363 S.E.2d at 457)).
23
Id. at 589-90 (quoting Motes v. Motes, 786 P.2d 232, 237 (Utah App.
1989)); see also Fullmer v. Fullmer, 761 P.2d 942, 950 (Utah App. 1988) (“The purpose
(continued...)
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Second, the court observed that trial courts have the equitable power to
adjust awards of child support and alimony in the same amount as the non-custodial
parent would receive through the exemption.24 Thus, the practical effects of ordering the
custodial parent to sign the waiver or adjusting the non-custodial parent’s child support
are economically equivalent.25 The court concluded there is no real justification for
“ ‘forc[ing] state courts to achieve financial parity [in a divorce] indirectly, by
downwardly adjusting otherwise appropriate alimony and child support, rather than
achieving parity directly, by sensibly allocating the exemptions.’ ”26
Third, the court acknowledged the possible economic benefits to the family
as a whole if a trial court may award the exemption to the non-custodial parent: “[T]he
effect of awarding the exemption to the noncustodial parent [in a higher income tax
bracket than the custodial parent] is to increase the after-tax spendable income of the
23
(...continued)
of the 1984 amendments was both to remove the Internal Revenue Service from time
consuming factual disputes over which parent met the threshold support requirements,
and to add certainty to the process . . . .”); H.R. Rep. No. 98-432, at 1498-99 (1984),
reprinted in 1984 U.S.C.C.A.N. 697, 1140 (“The present rules governing the allocations
of the dependency exemption are often subjective and present difficult problems of proof
and substantiation. The Internal Revenue Service becomes involved in many disputes
between parents who both claim the dependency exemption based on providing support
over the applicable thresholds. The cost to the parties and the Government to resolve
these disputes is relatively high and the Government generally has little tax revenue at
stake in the outcome. The committee wishes to provide more certainty by allowing the
custodial spouse the exemption unless that spouse waives his or her right to claim the
exemption. Thus, dependency disputes between parents will be resolved without the
involvement of the Internal Revenue Service.”).
24
Monterey Cnty., 812 P.2d at 591.
25
Id.
26
Id. (quoting Motes, 786 P.2d at 239).
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family as a whole, which may then be channeled into child support or other payments.”27
Denying state courts the authority to allocate the exemption “ ‘would only maximize the
federal taxes to be paid to the detriment of the parents and the children.’ ”28
The court concluded that California trial courts retained “their traditional
equitable power to allocate the dependency exemption to the noncustodial parent by
ordering the custodial parent to execute a declaration waiving the exemption.”29
D. The Superior Court Can Order A Signature On Form 8332.
We conclude as a matter of law that a superior court has the authority to
order a custodial parent to sign Form 8332 and give the dependent exemption to the non-
custodial parent. Nothing in Form 8332 or the associated tax code and federal
regulations specifically prohibits state courts from ordering the custodial parent to sign
Form 8332, and the majority approach exemplified by Monterey County presents the
better legal analysis and policy rationale. We adopt the majority rule and hold that the
superior court acted within its authority when it ordered Dodge to sign Form 8332 and
allocated the dependent exemption to Sturdevant.
V. CONCLUSION
We AFFIRM the superior court’s order.
27
Id. at 592.
28
Id. (quoting Nichols v. Tedder, 547 So. 2d 766, 774 (Miss. 1989)).
29
Id.
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