TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Thursday, December 23, 2004

Tax Court Upholds Constitutionality of § 152(e)

Tax_courtIn Caputi v. Commissioner, T.C. Memo. 2004-283 (12/22/04), the Tax Court yesterday upheld the constitutionality of §152(e) in a challenge brought by a non-custodial parent.

Under § 152(e), the dependency exemption is given to the custodial parent unless waived by that parent.  Absent such a waiver, in the case of a minor dependent child whose parents are divorced or separated and together provide over half of the child's support, the parent having custody for a greater portion of the calendar year (custodial parent) will generally be treated as providing over half of the support for the minor dependent, and that parent will be entitled to the deduction.

Following his divorce, James Caputi claimed a dependency exemption for his minor son even though his ex-wife was the custodial parent.  He argued that by granting the custodial parent the dependency exemption deduction, § 152(e) creates an unconstitutional irrebuttable presumption that the custodial parent provides more than half of the dependent’s support.

The Tax Court applied the rational basis test and found that §152(e) passed constitutional muster:

By enacting the current version of § 152(e), Congress sought to avoid the very type of factual debates that petitioner advances regarding the expenses of supporting and raising children, and to ease the administrative burden that was placed on the IRS when it became involved in these types of disputes. Section 152(e) gives the custodial parent the deduction and the ability to waive it for the benefit of the noncustodial parent. Id. This eases the administrative burden on the IRS and advances enforcement of the statute in a rational way; therefore, § 152(e) does not violate the Due Process Clause of the Fifth Amendment of the Constitution of the United States.  To be sure, there are other ways that Congress could have resolved the problem, and each way would have strengths and weaknesses.  But the fact that another way may seem preferable to petitioner does not mean that the manner chosen is without a rational basis.

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