                           140 T.C. No. 10



                  UNITED STATES TAX COURT



          MICHAEL KEITH SHENK, Petitioner v.
    COMMISSIONER OF INTERNAL REVENUE, Respondent



Docket No. 5706-12.                        Filed May 6, 2013.



       P was divorced from his wife, and their 2003 “Judgment of
Absolute Divorce” provided that his ex-wife would have primary
residential custody of their three minor children. The judgment
provided that the dependency exemption deductions for the three
children would be divided between the two ex-spouses according to
various conditions but did not provide that the ex-wife must execute
in P’s favor a Form 8332, “Release of Claim to Exemption for Child
of Divorced or Separated Parents”. The children resided with P’s ex-
wife for more than half of 2009, and P’s ex-wife did not execute in
P’s favor any Form 8332 or equivalent document for any year.

       For 2009 P timely filed a Federal income tax return on which
he claimed dependency exemption deductions and the child tax credit
for two of the children, consistent with his understanding of the terms
of the judgment, but he did not attach any Form 8332 to his return.
He also claimed head-of-household filing status. His ex-wife, the
custodial parent, timely filed a Federal income tax return for 2009 on
                                        -2-

      which she also claimed two dependency exemption deductions, so
      that one child was claimed on both parents’ returns. R allowed to P
      the dependency exemption deduction for one of the children but
      disallowed his claim for the dependency exemption deduction for the
      child who had also been claimed by the custodial parent. At trial P
      contended he is entitled to a dependency exemption deduction for all
      three children.

             Held: Since the custodial parent did not execute, and P could
      not and did not attach to his return, any Form 8332 or equivalent
      release, P is not entitled under I.R.C. sec. 152(e)(2)(A) to claim the
      dependency exemption deduction or the child tax credit.

             Held, further: Where both the custodial parent and the noncustodial
      parent have claimed for the same year a dependency exemption deduction
      for the same child, a declaration signed by the custodial parent after the
      period of limitations for assessments has expired as to the custodial parent
      could not qualify under I.R.C. sec. 152(e)(2)(A), and therefore there is no
      reason to grant P’s request to leave the record open so that he may obtain
      and proffer such a declaration.

            Held, further: P is not entitled to head-of-household filing status
      under I.R.C. sec. 2(b)(1) nor to the child tax credit under I.R.C. sec. 24.



      Michael Keith Shenk, for himself.

      Shari Salu, for respondent.



      GUSTAFSON, Judge: The Internal Revenue Service (IRS) determined a

deficiency of $3,136 in the 2009 Federal income tax of petitioner Michael Keith
                                         -3-

Shenk. Mr. Shenk petitioned this Court, pursuant to section 6213(a),1 for

redetermination of the deficiency. After Mr. Shenk’s concession that he received

but did not report $254 in dividend income, the issue for decision is whether

Mr. Shenk is entitled to a dependency exemption deduction for one of his children

under section 151(c), a child tax credit for that child under section 24(a), and

head-of-household filing status under section 2(b)(1). On these issues, we hold for

the IRS.

                               FINDINGS OF FACT

The judgment of divorce

      Mr. Shenk was married to Julie Phillips, and they have three minor

children--M.S., W.S., and L.S. They divorced in 2003. The family court’s

“Judgment of Absolute Divorce” provided: that Ms. Phillips was “awarded

primary residential custody” of the parties’ three children; and that Mr. Shenk

would be liable for child support payments; but that, as to dependency

exemptions--

      [I]n 2003, and in odd numbered years thereafter, provided that she is
      employed and earning income, defendant [Ms. Phillips] shall be entitled to
      claim the parties’ two younger children, W[] and L[], as dependency

      1
       Unless otherwise indicated, all citations of sections refer to the Internal
Revenue Code (26 U.S.C.) in effect for the tax year at issue, and all citations of
Rules refer to the Tax Court Rules of Practice and Procedure.
                                       -4-

      exemptions on her income tax returns; and, assuming he is current with his
      child support payments as of the end of the year, plaintiff [Mr. Shenk] shall
      be entitled in 2003, and in odd numbered years thereafter, to claim the
      parties’ oldest son, M[], as a dependency exemption on his income tax
      returns. In even numbered years, the parties’ entitlement to the foregoing
      dependency exemptions shall be reversed, with plaintiff having two
      exemptions and defendant having one, again assuming that defendant is
      employed and earning income and plaintiff is current with his child support
      payments at the end of the year in question * * *. [Emphasis added.]

The IRS admits that this paragraph makes Ms. Phillips’s entitlement to the

dependency exemptions to be contingent on her being employed. Mr. Shenk

further contends, and we assume, that this paragraph is properly interpreted to

allow a parent who does meet his or her condition (i.e., employment in the case of

Ms. Phillips, and child support in the case of Mr. Shenk) to claim the dependency

exemptions that would otherwise be allowed to a parent who fails to meet his or

her condition.

      The judgment states no requirement that Ms. Phillips facilitate Mr. Shenk’s

claim of dependency exemptions by executing a release (such as on Form 8332,

“Release of Claim to Exemption for Child of Divorced or Separated Parents”).

The judgment was not formatted in such a way as to require or permit the parties

to sign it, and neither Ms. Phillips nor Mr. Shenk signed the judgment.
                                       -5-

2009 tax returns

      In 2009 all three children resided with Ms. Phillips more than 50% of the

time. As of the end of 2009 Mr. Shenk was up to date on his child support

payments. Mr. Shenk contends, and we assume, that Ms. Phillips was not

employed in 2009.

      Nonetheless, on a joint return filed with her then-current husband on

April 15, 2010, Ms. Phillips reported income. (The return is not in our record, but

we assume she reported non-employment income.) Because 2009 was an odd-

numbered year, she also claimed two dependency exemption deductions for W.S.

and L.S.

      However, consistent with his understanding of the meaning of the judgment

of divorce, Mr. Shenk did not limit himself to claiming a dependency exemption

deduction for M.S. Instead, on his return for 2009 Mr. Shenk claimed two such

deductions--for M.S. and L.S.--because he believed Ms. Phillips had not been

employed in 2009 and therefore did not meet the conditions for claiming

dependency exemptions. (He argued at trial that his claim of only two exemptions

was a mistake and that he should instead have claimed all three.) He also claimed

the corresponding child tax credit, and he claimed head-of-household filing status.
                                        -6-

Disallowance by the IRS

      Because L.S. was thus claimed as a dependent on two returns, the IRS

became aware of the dueling claims. The IRS allowed Ms. Phillips’s return to

stand, leaving her with two dependency exemption deductions; and it disallowed

one of the dependency exemption deductions claimed on Mr. Shenk’s return. On

January 18, 2012, the IRS issued to Mr. Shenk a notice of deficiency for 2009,

determining additional tax attributable to denying that second dependency

exemption deduction, the child tax credit, and head-of-household filing status.

Court proceedings

      On March 2, 2012, Mr. Shenk timely filed his petition in this Court. At the

time he filed his petition, Mr. Shenk resided in Maryland. A year later, when this

case was called from the calendar for trial on March 4, 2013, Mr. Shenk asked for

a continuance so that he could request the family court to revise its judgment of

divorce to require Ms. Phillips to execute Form 8332 in his favor, and so that he

could then perfect his claim for the dependency exemption deductions by

proffering that Form 8332. Respondent’s counsel stated that a Form 8332 may be

effectively submitted even after the return has been filed, but argued that it must

be submitted in time to allow the IRS to disallow a dependency exemption

deduction that was redundantly claimed by the custodial parent who executes
                                         -7-

Form 8332. Because the three-year period of limitations to assess any tax against

Ms. Phillips on her 2009 return, see sec. 6501(a), presumably would expire

April 15, 2013--i.e., six weeks after this case was called for trial--respondent’s

counsel contended that, even if Mr. Shenk were successful in his attempt at

obtaining a release, the IRS would be prejudiced by any delay and would be

unable to assess any tax against Ms. Phillips.

      Because Mr. Shenk made no accounting for his having waited a year to try

to obtain Form 8332, the Court denied Mr. Shenk’s motion for a continuance,

stating that the parties should “go ahead and have today the trial that you are ready

to have now, to put on the evidence you have to put on now,” and that the Court

would then “entertain at the end of it whatever motion you want to make about

keeping the record open.” Mr. Shenk put on his case and contended he is entitled

to a dependency exemption deduction for all three children. At the end of trial, he

again moved that the record be left open so that he could obtain and offer a

Form 8332 signed by his ex-wife for 2009. We denied the motion without

prejudice and stated that we would delay issuing any opinion in the case until after

April 15, 2013, in order to give Mr. Shenk the opportunity to obtain the

Form 8332, if he could, and to move to reopen the record of this case by that date.

He did not do so.
                                         -8-

                                      OPINION

I.    The dependency exemption deduction

      A.     The provisions of section 152

      An individual is allowed a deduction for an exemption for “each individual

who is a dependent (as defined in section 152) of the taxpayer for the taxable

year.” Sec. 151(c). Section 152(a) defines the term “dependent” to include “a

qualifying child”. Generally, a “qualifying child” must: (i) bear a specified

relationship to the taxpayer (e.g., be a child of the taxpayer), (ii) have the same

principal place of abode as the taxpayer for more than one-half of such taxable

year, (iii) meet certain age requirements, (iv) not have provided over one-half of

such individual’s support for the taxable year at issue; and (v) not have filed a

joint return for that year. Sec. 152(c)(1). Under those provisions, Mr. Shenk

could not claim his children as dependents for 2009 because, as he admits, they

did not share the same place of abode with him for more than one-half of the year.

      However, in the case of divorced parents, special rules determine which

parent may claim a dependency exemption deduction for a child. See sec. 152(e);

Espinoza v. Commissioner, T.C. Memo. 2011-108; cf. sec. 152(c)(4). Pursuant to

section 152(e), when certain criteria are met, a child may be treated as a qualifying

child of the noncustodial parent (here, Mr. Shenk) rather than of the custodial
                                         -9-

parent (Ms. Phillips).2 Sec. 152(e)(1); 26 C.F.R. sec. 1.152-4, Income Tax Regs.

The child could be the qualifying child of Mr. Shenk, under section 152(e)(1) and

(2), if--

       •     The “child receives over one-half of the child’s support during the
             calendar year from the child’s parents * * * who are divorced * * *
             under a decree of divorce”, sec. 152(e)(1)(A);

       •     such child was “in the custody of 1 or both of the child’s parents for
             more than one-half of the calendar year”, sec. 152(e)(1)(B);

       •     “the custodial parent signs a written declaration (in such manner and
             form as the Secretary may by regulations prescribe) that such
             custodial parent will not claim such child as a dependent for any
             taxable year beginning in such calendar year”, sec. 152(e)(2)(A); and

       •     “the noncustodial parent attaches such written declaration to the
             noncustodial parent’s return” for the appropriate taxable year, sec.
             152(e)(2)(B).

       B.    The lack of a declaration

       Mr. Shenk’s claim in this case fails because he is unable to show

compliance with the third and fourth of the statutory criteria stated above--i.e.,

Ms. Phillips did not ever sign a declaration that she “will not claim such child as a




       2
       For these purposes, Ms. Phillips was the child’s custodial parent and
Mr. Shenk was the child’s noncustodial parent, because the State court orders gave
Ms. Phillips “primary residential custody” of their children. See sec. 152(e)(4);
26 C.F.R. sec. 1.152-4(d), Income Tax Regs.
                                        - 10 -

dependent”, and Mr. Shenk did not “attach[] such written declaration to” his

return.

      The IRS’s prescribed means for the noncustodial parent to make this

declaration is Form 8332, on which the relevant statement is “I agree not to

claim”. But whether made on that form or by an equivalent document,3 a basic

element necessary for satisfying section 152(e)(2)(A) is a custodial parent’s

declaration that (in the words of the statute) she “will not claim” the child as a

dependent for a taxable year. Ms. Phillips never signed any declaration that she

would not claim a dependency exemption deduction.

      Mr. Shenk contends that under the conditions set out in the State court

judgment of divorce, Ms. Phillips was not entitled to the disputed dependency

exemption deduction, and he implicitly argues that she should have executed a

      3
        A noncustodial parent may rely on an alternative document, provided that it
“conform[s] to the substance” of Form 8332. 26 C.F.R. sec. 1.152-4(e)(1)(ii),
Income Tax Regs. Form 8332 requires a taxpayer to furnish: the name of the
child; the name and Social Security number of the noncustodial parent claiming
the dependency exemption deduction; the Social Security number of the custodial
parent; the signature of the custodial parent; the date of the custodial parent’s
signature; and the year(s) for which the claims were released. For the year at issue
here, a signed judgment copy of a court order cannot satisfy section 152(e)(2).
See 26 C.F.R. sec. 1.152-4(e)(1)(ii) (“A court order or decree or a separation
agreement may not serve as a written declaration”). Moreover, the fact that the
court order entitling Mr. Shenk to a dependency exemption deduction was
explicitly conditional also renders that document insufficient. See Armstrong v.
Commissioner, 139 T.C. ___ (Dec. 19, 2012); 26 C.F.R. sec. 1.152-4(e)(1)(i).
                                       - 11 -

declaration disclaiming and releasing the exemption. However, section 152(e)

requires that a declaration be “sign[ed]”. The IRS stipulates that Mr. Shenk met

the condition of the judgment (i.e., he was up-to-date with his child support

payments); and we assume, as Mr. Shenk contends, that Ms. Phillips did not meet

the condition imposed on her by the judgment, so that as far as the State court was

concerned, Mr. Shenk was entitled to the disputed deduction. But ultimately it is

the Internal Revenue Code and not State court orders that determine one’s

eligibility to claim a deduction for Federal income tax purposes, and Mr. Shenk

does not meet the criteria of the Code for claiming the disputed dependency

exemption deduction. He is the noncustodial parent, and the custodial parent did

not sign the required declaration.

      As we explained in Miller v. Commissioner, 114 T.C. 184, 195-196 (2000),

aff’d on other grounds sub nom. Lovejoy v. Commissioner, 293 F.3d 1208 (10th

Cir. 2002), Congress added the written declaration requirement to section 152(e)

in 1984 to provide more certainty to the “often subjective and * * * difficult

problems of proof and substantiation” that accompanied dependency exemption

deduction disputes under the prior statutory scheme. H.R. Rept. No. 98-432 (Part
                                       - 12 -

2), at 1498 (1984), 1984 U.S.C.C.A.N. 697, 1140.4 Any rule by which Mr. Shenk

could prevail here would require us to revert to resolving those “difficult problems

of proof and substantiation” that we were supposed to leave behind with the prior

scheme--in this case, not only questions about whether Mr. Shenk had fulfilled his

support obligations (a question apparently easy to answer in this instance, though

difficult and controversial in others), but also questions about whether Ms. Phillips

was “employed and earning income”, as the judgment required. If such questions

had to be answered before one could determine the proper claimant of the

dependency exemption deduction, then section 152(e) would fail of its purpose.

We therefore hold that under section 152, neither W.S. nor L.S. is a qualifying

child of Mr. Shenk for tax year 2009; and as a result, Mr. Shenk is not entitled to

the disputed dependency exemption deductions for 2009.


      4
          The House report stated:

             The present rules governing the allocations of the dependency
      exemption are often subjective and present difficult problems of proof
      and substantiation. * * * 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.

H.R. Rept. No. 98-432 (Part 2), at 1498-1499 (1984), 1984 U.S.C.C.A.N. 697,
1140.
                                        - 13 -

      C.     The possibility of a future declaration

      Mr. Shenk asked us to leave open the trial record in this case so that he

could move the State court to order Ms. Phillips to sign a Form 8332 that he could

then submit. But even if we assume (without deciding) that a custodial parent’s

declaration submitted after the custodial parent has filed his return could

sometimes qualify as being “attache[d] * * * to the noncustodial parent’s return”

for purposes of section 152(e)(2)(B),5 any declaration that Mr. Shenk could now

obtain and submit would fail to qualify under section 152(e)(2)(A).

      Ms. Phillips claimed L.S. as a dependent on her 2009 income tax return

filed April 15, 2010--i.e., more than three years ago. Under section 6501(a), the

general three-year period of limitations for assessing tax against her for 2009

expired on April 15, 2013.6 Thus, in this case the custodial parent did “claim such

child as a dependent”; the IRS did not disallow the claim; and the period of

limitations for assessing tax against the custodial parent has now run. A clear



      5
       For competing views on whether a late-submitted declaration can be
considered “attache[d] * * * to the noncustodial parent’s return”, see Armstrong v.
Commissioner, 139 T.C. at ___ (slip op. at 21-24) (Goeke, J., concurring), and
Armstrong v. Commissioner, 139 T.C. at ___ (slip op. at 25-70) (Holmes, J.,
dissenting). We do not resolve that issue in this Opinion.
      6
       Mr. Shenk did not make or attempt any showing that any exception to the
general rule, see sec. 6501(c), might apply.
                                        - 14 -

purpose of the statute is to prevent a dependency exemption deduction for one

child to be claimed by and allowed for two parents; but if Mr. Shenk could

succeed at what he now proposes, both parents would obtain the deductions for

W.S. and L.S. The statute does not permit this outcome, as we now show:

      If Ms. Phillips were now to sign a declaration that she “will not claim such

child as a dependent” (or, as Form 8332 would have her put it, “I agree not to

claim an exemption for” the child), that declaration would be both contrary to fact

and without legal effect. She did claim the deduction for L.S.; the IRS allowed it;

and it is now evidently too late for the IRS to take it back. In order for the

custodial parent to sign a meaningful declaration to the effect that she “will not

claim such child as a dependent”--i.e., that she agrees not do so in the future--she

ought to make that declaration before she has filed any return claiming the child as

a dependent. But if she has already filed a return claiming the child as a

dependent, perhaps she could nonetheless meaningfully so declare if she does so at

the time she files an amended return on which she disclaims the deduction; in that

case, she agrees not to claim the exemption again. Or, if she has already filed a

return claiming the child as a dependent and does not amend that return, perhaps

her declaration could have some minimal significance if the period of limitations

for assessment were still open and her statement therefore left her susceptible to
                                        - 15 -

having the IRS disallow her deduction and assess the corresponding tax against

her; in that case, she agrees not to claim the exemption if she is challenged.

      But once the period of limitations for assessment has expired and the

custodial parent’s claim of the child as a dependent is not susceptible to being

disturbed, any statement by her that she “will not claim such child as a dependent”

for that year would be absurd. The time for her to declare what she “will” do as to

that taxable year has necessarily come and gone. As a logical matter and by

definition, she is unable to declare what she “will” do about a past year now

closed, so she is no longer capable of signing a declaration that qualifies under

section 152(e)(2)(A). Consequently, even if the concept in section 152(e)(2)(B) of

being “attache[d] * * * to the return” has enough flexibility to allow a

noncustodial parent to submit a declaration at some point after the filing of his

return, that flexibility must have limits--and the outside limit would surely be the

custodial parent’s period of limitations. Beyond that point, any declaration that

the noncustodial parent “attaches” fails to qualify under section 152(e)(2)(A) as a

statement of what she “will” do.
                                         - 16 -

II.    Child tax credit

       A taxpayer is entitled to a child tax credit for “each qualifying child”, as

defined in section 152, who has not reached the age of 17 and for whom the

taxpayer is allowed a dependency exemption deduction under section 151.

Sec. 24(a), (c)(1). Given our determination that, under section 152, neither W.S.

nor L.S. is a “qualifying child” of Mr. Shenk for the year at issue and that

Mr. Shenk is not allowed the dependency exemption deduction for either of them,

it follows that Mr. Shenk is not entitled to a child tax credit for W.S. or L.S. for

that year.

III.   Head-of-household filing status

       Section 1 of the Code provides different tax rates for different taxpayers,

and section 1(b) provides relatively favorable rates for a “head of a household (as

defined in section 2(b))”. Section 2(b) in turn defines a “head of a household”,

and one of the criteria for that status is that the taxpayer “maintains as his home a

household which constitutes for more than one-half of such taxable year the

principal place of abode, as a member of such household, of * * * (i) a qualifying

child of the individual (as defined in section 152(c), determined without regard to

section 152(e))”. Sec. 2(b)(1)(A). Under section 152(c)(1)(B), a “qualifying

child” must have “the same principal place of abode as the taxpayer for more than
                                        - 17 -

one-half of such taxable year”; and by providing that the child’s status is

determined “without regard to section 152(e) [“Special Rule for Divorced Parents,

Etc.”]”, section 2(b) provides that a noncustodial parent cannot meet the “principal

abode” requirement by obtaining a declaration from the custodial parent. Rather,

head-of-household status depends on having a qualifying child actually sharing the

taxpayer’s place of abode for more than half of the year.

      Mr. Shenk admits, however, that all three of his children resided with their

mother for more than half of 2009 and with him for less than half of 2009.

Consequently, no qualifying child lived with Mr. Shenk in his place of abode for

more than half of that year, so he is not entitled to head-of-household filing status.

      In view of the foregoing,


                                                       Decision will be entered

                                                 for respondent.
