TaxProf Blog

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

Sunday, September 23, 2007

ABA Tax Section Submits Comments on § 152 Regulations

The ABA Tax Section has submitted comments to the Treasury Department and IRS on the proposed § 152 regulations.  Tax Prof Bryan T. Camp (Texas Tech), Chair of the Committee on Individual and Family Taxation, was primarily resposible for the preparation of the comments.  Here is the Executive Summary:

These Comments are submitted in response to the request for comments contained in the preamble to the Proposed Regulations under Regulation § 1.152-4 as published in the Federal Register on May 2, 2007. The Proposed Regulations reflect amendments made by the Working Families Tax Relief Act of 2004 and the Gulf Opportunity Zone Act of 2005, and provide guidance on issues that have arisen in the administration of § 152(e).

Section 152(e) provides a special rule for claiming a child as a dependent for Federal income tax purposes in the case of parents who are divorced, separated, or live apart at all times during the last six months of the calendar year. In such situations the Code provides that if (a) the child receives over one-half of the child’s support from the child’s parents, (b) the child is in the custody of one or both parents for more than one-half of the calendar year, and (c) the custodial parent signs a written release that the noncustodial parent attaches to his or her tax return, then the child is deemed to be the qualifying child or qualifying relative of the noncustodial parent for purposes of the dependent exemption under § 151(c) and the child tax credit under § 24. The Proposed Regulations chiefly interpret and clarify the third statutory requirement. We agree with many of the decisions made in the Proposed Regulations and, in addition, we recommend that the Regulations, when finalized:

  1. change the “nights” test from an irrebuttable presumption to a rebuttable presumption;
  2. make explicit that a custodial parent may claim a dependent deduction for a child as a “Qualifying Relative” notwithstanding that the custodial parent alone does not provide more than 50% of that child’s support;
  3. permit taxpayers to attach an accurate copy of the written declaration to their tax return and not require the original;
  4. address the issue of whether a separation agreement can serve as a written declaration;
  5. clarify Example 2;6;
  6. permit a revocation, when so designated, to be effective as early as the tax year in which it is properly mailed or delivered to the noncustodial parent; and
  7. allow a custodial parent the benefit of a “mailbox rule” to prove notification of a revocation.

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