T.C. Memo. 2003-134
UNITED STATES TAX COURT
MICHAEL KEVIN & VICKIE P. BOLTINGHOUSE, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 9063-01. Filed May 13, 2003.
Michael K. Boltinghouse and Vickie P. Boltinghouse, pro se.
James R. Rich, for respondent.
MEMORANDUM OPINION
DINAN, Special Trial Judge: Respondent determined a
deficiency in petitioners’ Federal income tax of $805 for the
taxable year 1998. Unless otherwise indicated, section
references are to the Internal Revenue Code in effect for the
year in issue.
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The sole issue for decision is whether petitioners are
entitled to a dependency exemption deduction for a daughter of
petitioner Michael Kevin Boltinghouse (petitioner). If
petitioners are so entitled, respondent concedes that petitioners
also are entitled to a child tax credit for her.1
Some of the facts have been stipulated and are so found.
The stipulations of fact and the attached exhibits are
incorporated herein by this reference. Petitioners resided in
Durham, North Carolina, on the date the petition was filed in
this case.
Petitioner and his former wife, Lisa Rogers, entered into a
separation agreement prior to the finalization of their divorce
in 1991. The agreement, a three page document, was signed by
both parties and was dated April 1, 1990. The agreement provided
that Ms. Rogers was to have custody of both of their children,
Brandi and Brittany. It further provided:
1
Petitioners submitted an amended return to the Internal
Revenue Service after the issuance of the statutory notice of
deficiency in this case. In the amended return, in various
papers filed with this Court, and at trial, petitioners argue
that they have zero Federal tax liability for the year in issue
(and that they made an overpayment for that year) based upon
frivolous arguments which do little more than recite law which is
irrelevant, taken completely out of context, or otherwise
misapplied. “We perceive no need to refute these arguments with
somber reasoning and copious citation of precedent; to do so
might suggest that these arguments have some colorable merit.”
Crain v. Commissioner, 737 F.2d 1417 (5th Cir. 1984), affg. an
Order of this Court.
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We agree that I [petitioner] will claim Brandi and Lisa
will claim Brittany as dependents on our separate [sic] tax
returns. I agree Lisa can claim all interest on the house
on her tax return. Pending when the divorce is final, we
agree to file a joint tax return for 1990 and possibly 1991.
If a refund is due, Lisa will reeive [sic] 70% and Iwill
[sic] receive 30%. If a payment is due we agree to split
the cost 50-50.
At the time that the agreement was signed, both petitioner and
Ms. Rogers intended that the provision regarding the dependency
exemption deductions would apply until the children were either
18 years old or, if the children were enrolled as full-time
students, 24 years old. The agreement also provided details
concerning such matters as the division of marital property and
the payment of child support.
Petitioner and Ms. Rogers were divorced pursuant to a final
decree executed by the Family Court of the State of Delaware,
Sussex County, on February 5, 1991. The decree did not
incorporate the separation agreement, nor did it provide any
details regarding such matters as property settlement, custody of
the children, payment of child support, or entitlement to the
dependency exemption deductions. The decree referenced only an
Order of the Master which had reflected the minimal findings
necessary for a divorce under Delaware law.
Petitioner and his current wife, petitioner Vickie P.
Boltinghouse, filed a joint Federal income tax return for taxable
year 1998. On their return, they claimed a single dependency
exemption deduction and child tax credit for Brandi. They
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attached to their return a copy of the signed separation
agreement between petitioner and Ms. Rogers. In the statutory
notice of deficiency, respondent disallowed the dependency
exemption deduction and child tax credit. The notice stated:
The 1/90 separation agreement did contain a provision
entitling you to claim Brandi as a dependent exemption on
your tax return with no conditions attached. However, we
are unable to determine from the one page divorce decree
that the agreement has been incorporated as part of the
final divorce agreement/settlement. We require verification
that the separation agreement has been filed with the
divorce court and entered as part of your final divorce
agreement.
Generally, a deduction is allowed for each dependent of a
taxpayer. Sec. 151(a), (c)(1). Subject to exceptions and
limitations not applicable here, a child of a taxpayer is a
dependent of the taxpayer only if the taxpayer provides over half
of the child’s support for the taxable year. Sec. 152(a). A
special rule applies to taxpayer-parents who are divorced, who
are separated, or who live apart from their spouses for at least
the last 6 months of the calendar year, but who have custody of
the child for more than half of the year. Sec. 152(e)(1). Under
this rule, the parent with custody of the child for the greater
portion of the year (the “custodial parent”) generally is treated
as having provided over half of the child’s support, regardless
of which parent actually provided the support. Id. One
exception to this special rule exists which entitles the
noncustodial parent to the dependency exemption deduction. Sec.
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152(e)(2). For the exception to apply, the custodial parent must
sign a written declaration releasing his or her claim to the
deduction, and the noncustodial parent must attach the
declaration to his or her tax return. Id. A written declaration
releasing a taxpayer’s claim to a dependency exemption deduction
may apply to one year, a set number of years, or all future
years. Sec. 1.152-4T(a) Q&A-4, Temporary Income Tax Regs., 49
Fed. Reg. 34459 (Aug. 31, 1984).
Language in a divorce decree purportedly giving a taxpayer
the right to an exemption deduction does not entitle the taxpayer
to the deduction in the absence of the signed written declaration
required by section 152(e)(2). Miller v. Commissioner, 114 T.C.
184 (2000), affd. on another ground sub nom. Lovejoy v.
Commissioner, 293 F.3d 1208 (10th Cir. 2002). To meet the
requirements of section 152(e)(2), the written declaration, if
not made on the official form provided by the Internal Revenue
Service, “shall conform to the substance of such form.” Sec.
1.152-4T(a) Q&A-3, Temporary Income Tax Regs., 49 Fed. Reg. 34459
(Aug. 31, 1984). The form provided by the Service, Form 8332,2
calls for the following information: The name of the child or
children; the applicable tax year or years; the custodial
parent’s signature and the date of signature; the custodial
2
The Court takes judicial notice of Form 8332, Release of
Claim to Exemption for Child of Divorced or Separated Parents,
available from the IRS.
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parent’s Social Security number; the noncustodial parent’s name;
and the noncustodial parent’s Social Security number.
Petitioners argue that attaching the copy of the signed
separation agreement to their return met the requirements of
section 152(e)(2). Respondent argues that the agreement does not
meet the requirements of that section because (1) as stated in
the notice of deficiency, the agreement was not incorporated into
the final divorce decree, and (2) the agreement does not conform
to the substance of Form 8332 because it does not reflect (a) the
years for which the dependency exemption deductions were to be
released and (b) the Social Security numbers of petitioner and
Ms. Rogers.
We agree with petitioners. First, there is no requirement
in section 152(e)(2) or the regulations thereunder that a
spouse’s waiver of her claim to a dependency exemption deduction
be incorporated into a divorce decree to be effective. Such a
requirement would make Form 8332 itself ineffective on its own.
Furthermore, a separation agreement creates binding contractual
obligations under the laws of the State of Delaware. Harry M.P.
v. Nina M.P., 437 A.2d 158 (Del. 1981). Such contractual
obligations do not cease upon the entry of a divorce decree,
Heinsohn v. Chandler, 2 A.2d 120 (Del. Ch. 1938), and whether or
not the agreement is merged or incorporated into the decree
generally does not affect the contractual obligations under the
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agreement, Rockwell v. Rockwell, 681 A.2d 1017 (Del. 1996); Solis
v. Tea, 468 A.2d 1276 (Del. 1983). Respondent has not argued,
and nothing in the record indicates, that the separation
agreement was invalid in any respect.
Second, we find that the separation agreement conforms to
the substance of Form 8332. The agreement provided that
petitioner was unconditionally entitled to the dependency
exemption for Brandi, and it was signed and dated by Ms. Rogers,
Brandi’s custodial parent. The language of the agreement, which
referred to the separate returns of petitioner and Ms. Rogers as
well as to joint returns to be filed no later than 1991,
indicates that the allocation of the dependency exemption
deductions was to apply to all returns filed after the divorce
had been finalized. Thus, although the agreement did not
explicitly state each and every taxable year to which it was to
apply, we find that it unambiguously stated that it was to apply
to all future years, which is permissible pursuant to section
1.152-4T(a) Q&A-4, Temporary Income Tax Regs., 49 Fed. Reg. 34459
(Aug. 31, 1984). We note that, in the notice of deficiency,
respondent did not challenge the language of the agreement but
questioned only whether the agreement had been incorporated into
a divorce decree: The notice stated that the “separation
agreement did contain a provision entitling you to claim Brandi
as a dependent exemption on your tax return with no conditions
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attached.” No issue concerning the applicable tax year was
raised in the notice.
The present case can be distinguished from our opinions in
Cafarelli v. Commissioner, T.C. Memo. 1994-265, and Loffer v.
Commissioner, T.C. Memo. 2002-298. In Cafarelli, the taxpayer, a
custodial parent, had completed a Form 8332 which was attached to
the noncustodial parent’s 1989 return. The form was completed in
such a way that it applied to “ALL FUTURE YEARS”. It was signed
and dated January 5, 1990, but it did not designate the first
year in which the release was to be applicable. This Court found
that the form was not a “written declaration” under section
152(e)(2) with respect to the year 1989. We based this finding
on the ambiguity created by the form’s failure to indicate that
it was to apply to the year 1989, and the fact that the portion
of the form designated to apply to the “Current Year” was not
completed by the taxpayer. Thus, to have applied the form to
1989 would have contradicted the terms appearing on the face of
the form: The form was signed in 1990 and indicated that it was
to apply to “ALL FUTURE YEARS”.
In Loffer, the alleged “written declaration”--a signed
divorce decree--created an ambiguity as to what taxable years
were applicable by limiting the entitlement to the deduction to
“so long as there are two children who can be claimed.”
Furthermore, the decree did not state the name of the dependent
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child, and it required the parties’ execution of the appropriate
Internal Revenue Service documentation in order to entitle the
taxpayer to the dependency exemption deduction. This
documentation was not executed pursuant to the decree.
No such ambiguity exists in the present case. The
separation agreement states that petitioner was entitled to the
dependency exemption deduction when petitioner and Ms. Rogers
started filing separate returns. This requirement does not cause
any ambiguity because it is clear from petitioner’s return that
he was filing separately from Ms. Rogers.
Finally, respondent’s assertion that the lack of Social
Security numbers causes the declaration to be ineffective is
without merit. The Social Security number of petitioner, the
noncustodial parent, appears elsewhere on the return; its
presence on the written release is superfluous. This Court has
held that the omission of the custodial parent’s Social Security
number from a completed Form 8332 does not invalidate the release
effected by that form. Bramante v. Commissioner, T.C. Memo.
2002-228. Accordingly, the presence of Ms. Rogers’ Social
Security number is not required for the separation agreement to
conform to the substance of Form 8332.
The requirements of section 152(e)(2) have been met, and
petitioners therefore are entitled to the dependency exemption
deduction claimed on their return for Brandi.
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To reflect the foregoing,
Decision will be entered
for petitioners.