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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
VICTORIA L. BERKOWITZ N/K/A : IN THE SUPERIOR COURT OF
VICTORIA S. HOLLISTER, : PENNSYLVANIA
:
Appellant :
v. :
:
JUDAH S. BERKOWITZ, :
: No. 2777 EDA 2015
Appeal from the Order Entered August 13, 2015
in the Court of Common Pleas of Chester County Domestic Relations
at No(s): 2005-06278
BEFORE: PANELLA, OTT, and FITZGERALD,* JJ.
MEMORANDUM BY FITZGERALD, J.: FILED MARCH 21, 2016.
Appellant, Victoria L. Berkowitz, n/k/a Victoria S. Hollister (“Wife”),
appeals from the order entered in the Chester County Court of Common
Pleas denying her Petition for Special Relief for Enforcement of Marriage
Settlement Agreement.1 Wife challenges the trial court’s determination that
the exemption for the parties’ child, Emily, became unavailable for use by
the parties when Emily claimed herself as a dependent in her 2014 tax
return. We reverse and remand.
We glean the undisputed facts from the record. Appellee, Judah S.
Berkowitz (“Husband”), and Wife were married on April 18, 1986. R.R. at
*
Former Justice specially assigned to the Superior Court.
1
The trial court, in the August 13th order, refers to the petition as a petition
for the enforcement of the property settlement agreement (“PSA”). For
consistency, we refer to it as the PSA.
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28a.2 Husband and Wife entered into a PSA on July 16, 2007. Id. at 29a-
37a. The PSA was set forth in the Report and Recommendation of the
Master. Id. at 27a-38a. The PSA provided, in pertinent part, as follows:
18. Starting in tax year 2007, Wife shall be entitled
to claim Emily[3] and Ann[4] as dependents for tax
purposes, and Husband shall be entitled to claim
Rebecca[5] as a dependent. When there is no longer
a dependency exemption available for Rebecca, then
Husband shall be entitled to claim Ann and Wife shall
be entitled to claim Emily. When Ann can no longer
be claimed as a dependent for tax purposes, then
each party shall be entitled to claim Emily in
alternating years.
Id. at 36a-37a. A divorce decree was entered on September 11, 2007. Id.
at 39a. The decree provided that “[t]he agreement reached by the parties,
the provisions which are set forth at length in the Master’s Report, is
incorporated herein.” Id.
Wife claimed Ann6 and Emily as dependents in her 2014 U.S.
Individual Income Tax Return. Id. at 49a. Wife’s return was rejected by the
IRS for the following reason:
2
For convenience, we refer to the reproduced record where applicable.
3
Emily was born on June 8, 1993. In 2014, she was a senior in college. Id.
at 48a.
4
Ann was born on April 21, 1992. Id.
5
Rebecca was born on May 16, 1991. Id.
6
We note that in her income tax return, Wife spells Ann with an “e” unlike
the spelling of the dependent’s name in the PSA.
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Your dependent’s social Security number (SSN) cannot be
used to claim an exemption on two separate tax returns.
You claimed a dependent as an exemption on your tax
return, but this dependent has also filed their own tax
return claiming a person exemption.
Id. at 51a. On April 6, 2015, Husband wrote to Wife stating: “When I
prepared Emily’s 2014 taxes for her this year I checked off the box that no
one was claiming her as a dependent.” Id. at 53a.
On June 15, 2015, Wife filed a petition to enforce the PSA. Id. at 1a-
3a. In the petition, Wife averred, in pertinent part, as follows:
[Wife] was entitled to a federal income tax refund of
$2,203.00 when Emily was claimed as a dependent
exemption. . . .
Due to [Husband’s] willful and deliberate refusal to
abide by the terms of the [PSA, Wife] was required to re-
file her federal and state income tax returns. As a result,
[Wife’s] federal income tax refund was reduced to
$1,273.00, a difference of $930.00. . . .
Id. at 3a. Wife requested the court to order Husband to pay her the sum of
$930.00. Id. On August 13, 2015, following a hearing, the trial court
denied Wife’s request for relief. Id. at 66a. Wife filed a motion for
reconsideration and notice of appeal on September 4, 2015. The trial court
denied the motion for reconsideration on September 8, 2015.
Appellant raises the following issues for our review:7
7
We note that the trial court found Appellant waived the issues raised on
appeal for failure to file a Pa.R.A.P. 1925(b) statement of errors complained
of on appeal. See R.R. at 77a-78a. This court has held:
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1. Did the trial court err as a matter of law or abuse its
discretion in failing to enforce the parties’ PSA with respect
to the income tax dependency exemption for the parties’
child to reflect the agreement of the parties as contained in
the PSA?
2. Did the trial court err or abuse its discretion by
concluding that [Husband] did not violate the terms of the
PSA with regard to the allocation of income tax
dependency exemptions when the evidence, including
Husband’s own admission, showed that Husband alone was
Before addressing the merits of [the a]ppellant’s claims,
we need to decide whether they are preserved for
appellate review as required by the Pennsylvania Supreme
Court in Commonwealth v. Lord, [ ] 719 A.2d 306 ([Pa.]
1998), which held an [a]ppellant must comply whenever
the trial court orders the filing of a statement of matters
complained of on appeal pursuant to Pa.R.A.P.1925: “Any
issues not raised in a 1925(b) statement will be deemed
waived.” Id. [ ] at 309.
However, there are caveats to a finding of waiver.
First, the trial court must issue a Rule 1925(b) order
directing an [a]ppellant to file a response within fourteen
days of the order. Second, the Rule 1925(b) order must
be filed with the prothonotary. Third, the prothonotary
must docket the Rule 1925(b) order and record in
the docket the date it was made. Fourth, the
prothonotary shall give written notice of the entry of the
order to each party’s attorney of record, and it shall be
recorded in the docket the giving of notice. See Pa.R.C.P.
236. If any of the procedural steps set forth above are
not complied with, [an a]ppellant’s failure to act in
accordance with Rule 1925(b) will not result in a waiver of
the issues sought to be reviewed on appeal. See
Commonwealth v. Hess, [ ] 810 A.2d 1249, 1252 ([Pa.]
2002).
Forest Highlands Cmty. Ass'n v. Hammer, 879 A.2d 223, 226-27 (Pa.
Super. 2005) (emphases added). In the case sub judice, there was no Rule
1925(b) order on the docket. Therefore, we decline to find waiver. See id.
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responsible for preparing and filing daughter Emily’s tax
return in direct violation of the express language of
paragraph 18 of the parties’ [PSA]?
3. Did the trial court err or abuse its discretion in ignoring
the IRS definition of dependent, the conclusion of the IRS
audit of [Wife’s] 2012 Federal income tax return
confirming Wife’s claim of dependency exemptions, and
the evidence that the children met the same definition of
dependent in 2014 as they did in 2012?
4. Did the trial court err or abuse its discretion in ignoring
the Internal Revenue Code section which requires an
individual who qualifies as a dependent of another person
to not claim him or herself as a personal exemption as the
exemption belongs to the person on whom the individual is
dependent? 26 U.S.C. § 151.
Wife’s Brief at 4-5. We address Wife’s issues together because they are
interrelated.8
8
In issue three, Wife refers to correspondence from the IRS which stated,
in pertinent part, as follows:
Thank you for your correspondence received dated March
20, 2014. We have evaluated all the submitted
information and have concluded that you and all three
dependents are related. According to the court decree,
starting in the tax year 2007, [Wife] is allowed to claim
both dependents namely Emily [ ] and Ann[ ] and
[Husband] is allowed to claim one dependent namely
Rebecca [ ]. When there is no longer a dependency
exemption available for Rebecca, then [H]usband shall be
entitled to claim Ann[ ] and [W]ife shall be entitled to
claim Emily. When Ann[ ] can no longer be claimed as
dependent for tax purposes, then each party shall be
entitled to claim Emily in alternating years.
Under these orders, [Wife] is allowed to claim both
dependents Emily and Ann[ ] in 2012. . . .
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Our review is governed by the following principles:
The law in Pennsylvania with regard to property settlement
agreements is well-settled. Generally, courts in this
Commonwealth possess the broad authority to enforce the
terms of a parties’ property settlement agreement. . . .
In Pennsylvania, we enforce property settlement
agreements between husband and wife in accordance with
the same rules applying to contract interpretation.
Cioffi v. Cioffi, 885 A.2d 45, 48 (Pa. Super. 2005) (citations and formatting
omitted). “Because contract interpretation is a question of law, this Court is
not bound by the trial court’s interpretation. Our standard of review over
questions of law is de novo and to the extent necessary, the scope of our
review is plenary . . . .”9 Stamerro v. Stamerro, 889 A.2d 1251, 1257 (Pa.
Super. 2005) (quotation marks and citations omitted).
The term dependent is statutorily defined as follows:
(a) In general.─ For purposes of this subtitle, the term
“dependent” means─
(1) a qualifying child . . .
* * *
(c) Qualifying child.─For purposes of this section─
(1) In general.─The term “qualifying child” means,
with respect to any taxpayer for any taxable year, an
individual—
R.R. at 65a.
9
Given our scope and standard of review, the absence of a Pa.R.A.P.
1925(a) opinion is not consequential. Furthermore, we have the trial court’s
rationale in the August 13th order and opinion. See R.R. at 66a-67a.
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(A) who bears a relationship to the taxpayer
described in paragraph (2) . . .
* * *
(2) Relationship.─For purposes of paragraph (1)(A),
an individual bears a relationship to the taxpayer
described in this paragraph if such individual is─
(A) a child of the taxpayer or a descendant of such a
child . . .
(3) Age requirements.─
(A) In general.─For purposes of paragraph (1)(C),
an individual meets the requirements of this
paragraph if such individual is younger than the
taxpayer claiming such individual as a qualifying child
and—
* * *
(ii) is a student who has not attained the age of
24 as of the close of such calendar year.
* * *
(f) Other definitions and rules.─For purposes of this
section—
* * *
(2) Student defined.─The term “student” means an
individual who during each of 5 calendar months during
the calendar year in which the taxable year of the
taxpayer begins─
(A) is a full-time student at an educational
organization . . . .
26 U.S.C. § 152(a), (c), (f).
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The Code provides that where a deduction is allowable to another
taxpayer, a personal exemption is disallowed.
(2) Exemption amount disallowed in case of certain
dependents.─ In the case of an individual with respect to
whom a deduction under this section is allowable to
another taxpayer for a taxable year beginning in the
calendar year in which the individual's taxable year begins,
the exemption amount applicable to such individual for
such individual’s taxable year shall be zero.
Id. § 151(d)(2) (emphasis added).
In Miller v. Miller, 744 A.2d 778 (Pa. Super. 1999), this Court
addressed the legislative history of Section 152.
In recommending the changes to § 152(e), the House
Ways and Means Committee stated:
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 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 parent 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.
H.R.Rep. No. 432, 98 th Cong., 2d Sess., pt. 3, at 1498-99
(reprinted in 1984 U.S.Code Cong. & Admin. News 697,
1140). It is clear from this legislative history that the
“purpose [of the amendments] was to alleviate the
administrative burden which had been placed on the
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Internal Revenue Service (I.R.S.) due to the necessity for
it to become involved in making determinations as to
which parent provided the larger portion of a child’s
support if the parties disagreed and both sought to claim
the exemption.” This legislative history does not suggest
that the changes were made to preclude state courts from
exercising their authority regarding the exemption.
Instead, “this silence demonstrates Congress’ surpassing
indifference to how the exemption is allocated so long as
the IRS doesn't have to do the allocating.”
Id. at 784-85 (citations omitted and emphasis added).
In the case sub judice, the trial court opined:
[Wife and Husband] entered into a PSA in September
2007. The PSA allows the parties to share the IRS
dependency exemption (“exemption”) for their three
daughters. . . .
* * *
[Wife] argues that she has the right to claim an
exemption for two daughters, Ann and Emily, on her 2014
Tax Return. [Husband] did not object to this claim to the
extent that the exemptions remain “available” in 2014.
The evidence presented to the [c]ourt shows that Emily,
a 21 year old in 2014, claimed herself as a dependent
in her 2014 Tax Return. As a result, her exemption
became unavailable for use by the parties.
* * *
. . . The simple fact is that Emily, acting upon her
own right to claim herself as a dependent on her tax
returns has made her exemption unavailable to her
parents . . . . Consequently, . . . Husband is not in
breach of the PSA and deny Wife’s request for relief.
R.R. at 66a-67a (citations omitted and some emphases added).
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We find that the trial court erred in finding that Emily claimed herself
as a dependent. See id. On the contrary, she claimed a personal
exemption. See id. at 51a. Emily qualified as a dependent child. See 26
U.S.C. § 152(a), (c), (f). As a dependent child, Emily was not permitted to
claim a personal exemption. See id. § 151(d)(2). It is undisputed that
Husband prepared Emily’s tax return and “checked off the box that no one
was claiming her as a dependent,” in derogation of the PSA. See R.R. at
53a.
Pursuant to the PSA, Wife was entitled to claim Emily as a dependent
for the income tax dependency exemption. See Cioffi, 885 A.2d at 48; R.R.
at 36a-37a. We find the trial court erred in finding that “Emily, acting upon
her own right to claim herself as a dependent on her tax returns has made
her exemption unavailable to her parents.” See R.R. at 67a; 26 U.S.C. §
151(d)(2); 26 U.S.C. § 152(a), (c), (f). It is beyond cavil that husband
prepared Emily’s tax return erroneously. See 26 U.S.C. § 151(d)(2).
Therefore, we reverse and remand to the trial court to enter an order
consistent with this memorandum. See Miller, 744 A.2d at 784-85.
Order reversed. Case remanded. Jurisdiction relinquished.
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Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 3/21/2016
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