                                               LISA BEAMON SWINT, PETITIONER v. COMMISSIONER
                                                     OF INTERNAL REVENUE, RESPONDENT

                                                    Docket No. 11770–12.                    Filed February 24, 2014.

                                                  Prior to marrying P, P’s husband had a child with TDW. An
                                               agreed entry filed by a State court in February 1998 provided
                                               that P’s husband would be entitled to a dependency exemption
                                               deduction and a child tax credit for the child if he was current
                                               in his child support obligations. The agreed entry was not
                                               signed by P’s husband or TDW. P and her husband filed a
                                               joint Federal income tax return for the taxable year 2009
                                               claiming a dependency exemption deduction and a child tax
                                               credit. R disallowed P’s claim for a dependency exemption
                                               deduction and a child tax credit. Held: Sec. 1.152–4(e)(1)(ii),
                                               Income Tax Regs., provides that for taxable years starting
                                               after July 2, 2008, a ‘‘court order or decree or a separation
                                               agreement may not serve as a written declaration.’’ However,
                                               sec. 1.152–4(e)(5), Income Tax Regs., provides a carveout to
                                               this rule: If a written declaration was executed in a taxable
                                               year beginning on or before July 2, 2008, we look to the
                                               requirements for the form of a written declaration that were
                                               in effect at the time the written declaration was executed. At
                                               the time the agreed entry was filed in 1998 there was no
                                               prohibition on using a court order or decree or a separation
                                               agreement as a written declaration if the other requirements
                                               for a written declaration were met. Held, further, the agreed
                                               entry did not satisfy the requirements for the form of a writ-
                                               ten declaration in effect at the time the agreed entry was
                                               executed because it was not signed by the custodial parent
                                               and was not unconditional. Therefore, P is not entitled to a
                                               dependency exemption deduction or a child tax credit for the
                                               child.

                                           Ljubomir Nacev, for petitioner. 1
                                           Robert D. Kaiser and Edward Lee Walter, for respondent.
                                        RUWE, Judge: Respondent determined a deficiency in peti-
                                     tioner’s Federal income tax of $1,547 for the taxable year
                                     2009 (year at issue). The issues for decision are: (1) whether
                                     petitioner is entitled to a dependency exemption deduction
                                     under section 151(a) 2 and (c); and (2) whether petitioner is
                                     entitled to a child tax credit under section 24(a).
                                       1 Mr. Nacev entered his appearance after the trial and filed a posttrial

                                     memorandum brief on petitioner’s behalf.
                                       2 Unless otherwise indicated, all section references are to the Internal

                                     Revenue Code in effect for the year at issue, and all Rule references are
                                                                                                      Continued


                                                                                                                                   131




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                                     132                  142 UNITED STATES TAX COURT REPORTS                                     (131)

                                                                           FINDINGS OF FACT

                                       Some of the facts have been stipulated and are so found.
                                     The stipulation of facts and the attached exhibits are incor-
                                     porated herein by this reference.
                                       At the time the petition was filed, petitioner resided in
                                     Ohio.
                                       Petitioner married Tommy L. Swint in 2000. Mr. Swint
                                     passed away in 2010. From 2000 through 2010 petitioner and
                                     Mr. Swint filed joint Federal income tax returns.
                                       Before marrying petitioner, Mr. Swint had a child (minor
                                     child) 3 that was born in 1997 with Tonia Dawn Wilson. An
                                     agreed entry between Mr. Swint and Ms. Wilson was filed on
                                     February 13, 1998, by the Common Pleas Court of Mont-
                                     gomery County, Ohio, Juvenile Division. The parties sub-
                                     mitted into evidence two pages of the agreed entry. In regard
                                     to the dependency exemption deduction the agreed entry
                                     stated:
                                              [Mr. Swint] shall be entitled to claim the minor child as a dependency
                                           exemption as long as he is current in his child support obligations for
                                           all applicable federal, state and local tax purposes. Failure to keep cur-
                                           rent with his support obligations will result in a forfeiture of any rights
                                           under this paragraph until such time as * * * [Mr. Swint] has elimi-
                                           nated all arrearages and is again fully current in his child support
                                           obligations. Delinquency in child support will cause the income tax
                                           deduction to be transferred to * * * [Ms. Wilson] until the arrearage is
                                           paid and all payments are current. The parties agree to cooperate with
                                           the execution of any and all documents necessary to allow the claiming
                                           of these exemptions.

                                     The pages of the agreed entry submitted into evidence were
                                     not signed by either Mr. Swint or Ms. Wilson.
                                       Petitioner and Mr. Swint timely filed a joint Federal
                                     income tax return for the year at issue claiming a depend-
                                     ency exemption deduction and a child tax credit for the
                                     minor child. The minor child did not live with petitioner and
                                     Mr. Swint during the year at issue.
                                       On February 6, 2012, respondent issued to petitioner a
                                     notice of deficiency for 2009. The notice of deficiency dis-
                                     allowed the dependency exemption deduction and the child

                                     to the Tax Court Rules of Practice and Procedure.
                                       3 The names of minor children are redacted. See Rule 27(a)(3).




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                                     (131)                           SWINT v. COMMISSIONER                                         133


                                     tax credit for the minor child. Petitioner timely filed a peti-
                                     tion disputing the determinations in the notice of deficiency.

                                                                                  OPINION

                                       The Commissioner’s determinations in a notice of defi-
                                     ciency are generally presumed correct, and the taxpayer
                                     bears the burden of proving that the determinations are in
                                     error. Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115
                                     (1933).
                                     Dependency Exemption Deduction

                                        Generally, a taxpayer may claim dependency exemption
                                     deductions for all individuals who are dependents of the tax-
                                     payer for the taxable year. Sec. 151(a), (c). ‘‘Dependent’’ is
                                     defined by section 152(a) as including ‘‘a qualifying child’’.
                                     Sec. 152(a)(1).
                                        In the case of divorced or separated parents, section 152(e)
                                     provides a special rule to determine which parent is entitled
                                     to a dependency exemption deduction for a child. Generally,
                                     a child who is in the custody of one or both of the child’s par-
                                     ents for more than one-half of the calendar year and receives
                                     more than one-half of his or her support from parents who
                                     are divorced or separated or who live apart at all times
                                     during the last six months of the calendar year will be
                                     considered the qualifying child of the custodial parent. Sec.
                                     152(e)(1). Section 152(e)(4)(A) defines the custodial parent as
                                     ‘‘the parent having custody for the greater portion of the cal-
                                     endar year.’’ Section 152(e)(4)(B) defines the noncustodial
                                     parent as ‘‘the parent who is not the custodial parent.’’ The
                                     minor child did not live with Mr. Swint during the year at
                                     issue. As a result, Mr. Swint was the noncustodial parent of
                                     the minor child. See sec. 152(e)(4)(B).
                                        Pursuant to section 152(e), a child will be treated as a
                                     qualifying child of the noncustodial parent rather than of the
                                     custodial parent when certain criteria are met. One of the
                                     requirements for the child to be the qualifying child of the
                                     noncustodial parent is that ‘‘the custodial parent signs a
                                     written declaration (in such manner and form as the Sec-
                                     retary may by regulations prescribe) that such custodial
                                     parent will not claim such child as a dependent for any tax-
                                     able year beginning in such calendar year’’. Sec. 152(e)(2)(A).




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                                     134                  142 UNITED STATES TAX COURT REPORTS                                     (131)


                                        ‘‘The declaration required under section 152(e)(2) must be
                                     made either on a completed Form 8332 or on a statement
                                     conforming to the substance of Form 8332.’’ Miller v.
                                     Commissioner, 114 T.C. 184, 189 (2000). Form 8332, Release/
                                     Revocation of Release of Claim to Exemption for Child by
                                     Custodial Parent, provides an effective and uniform way for
                                     a custodial parent to make the declaration required in sec-
                                     tion 152(e)(2)(A) for the benefit of the noncustodial parent.
                                     Armstrong v. Commissioner, 139 T.C. 468, 472 (2012). 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 sig-
                                     nature; and the year(s) for which the claims were released.
                                        Petitioner argues that the agreed entry filed February 13,
                                     1998, suffices as a written declaration conforming to the sub-
                                     stance of Form 8332. In respondent’s posttrial supplement to
                                     his pretrial memorandum, respondent argues that ‘‘[d]ivorce
                                     decrees, or comparable documents, do not suffice for the pur-
                                     poses of a written waiver by Form 8332 or a substantially
                                     conforming document under section 152(e).’’ Respondent
                                     relies on footnote 6 in Armstrong v. Commissioner, 139 T.C.
                                     at 472 n.6:
                                           For taxable years starting after July 2, 2008, a court order signed by the
                                           custodial parent will not satisfy 26 C.F.R. section 1.152–4(e)(1)(ii),
                                           Income Tax Regs. * * * (‘‘A written declaration not on the form des-
                                           ignated by the IRS must conform to the substance of that form and must
                                           be a document executed for the sole purpose of serving as a written dec-
                                           laration under this section. A court order or decree or a separation
                                           agreement may not serve as a written declaration’’).

                                     This footnote in Armstrong was dictum and did not have any
                                     effect on the holding of that case. Armstrong involved a 2007
                                     tax year.
                                        Section 1.152–4(e)(1)(ii), Income Tax Regs., does provide
                                     that for taxable years starting after July 2, 2008, a ‘‘court
                                     order or decree or a separation agreement may not serve as
                                     a written declaration’’, and the taxable year in issue here is
                                     2009. However, section 1.152–4(e)(5), Income Tax Regs., also
                                     provides a transition rule that creates a carveout to section
                                     1.152–4(e)(1)(ii), Income Tax Regs.




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                                     (131)                            SWINT v. COMMISSIONER                                         135


                                             § 1.152–4(e). Written declaration.—

                                                                   *   *    *   *   *   *    *
                                             (5) Written declaration executed in a taxable year beginning on or
                                           before July 2, 2008.—A written declaration executed in a taxable year
                                           beginning on or before July 2, 2008, that satisfies the requirements for
                                           the form of a written declaration in effect at the time the written dec-
                                           laration is executed, will be treated as meeting the requirements of para-
                                           graph (e)(1) of this section. * * *

                                     Under section 1.152–4(e)(5), Income Tax Regs., if a written
                                     declaration was executed in a taxable year beginning on or
                                     before July 2, 2008, we look to the requirements for the form
                                     of a written declaration that were in effect at the time the
                                     written declaration was executed. 4
                                        The agreed entry was filed on February 13, 1998. There-
                                     fore, under section 1.152–4(e)(5), Income Tax Regs., we must
                                     determine whether the agreed entry satisfies the require-
                                     ments of a written declaration that were in effect as of Feb-
                                     ruary 13, 1998. At that time there was no prohibition on
                                     using a court order, decree, or separation agreement as a
                                     written declaration for purposes of section 152(e). As a result,
                                     petitioner’s reliance on a court order as the written declara-
                                     tion does not, by itself, preclude its potential qualification as
                                     a ‘‘written declaration’’ for purposes of section 152. See Chief
                                     Counsel Advice 200925041 (May 11, 2009) (‘‘However, a non-
                                     custodial parent may continue to attach pages of a divorce
                                       4 Sec. 1.152–4(g), Example (19), Income Tax Regs., explains this as fol-

                                     lows:
                                              Example 19. (i) Y and Z are the divorced parents of Child. In 2003,
                                           Y and Z enter into a separation agreement, which is incorporated into
                                           a divorce decree, under which Y, the custodial parent, releases Y’s right
                                           to claim Child as a dependent for all future years. The separation agree-
                                           ment satisfies the requirements for the form of a written declaration in
                                           effect at the time it is executed. Z attaches a copy of the separation
                                           agreement to Z’s returns for 2003 through 2009.
                                              (ii) Under paragraph (e)(1)(ii) of this section, a separation agreement
                                           may not serve as a written declaration. However, under paragraph (e)(5)
                                           of this section, a written declaration executed in a taxable year begin-
                                           ning on or before July 2, 2008, that satisfies the requirements for the
                                           form of a written declaration in effect at the time the written declaration
                                           is executed, will be treated as meeting the requirements of paragraph
                                           (e)(1) of this section. Therefore, the separation agreement may serve as
                                           the written declaration required by paragraph (b)(3)(i) of this section for
                                           2009, and Z may claim Child as a dependent in 2009 and later years.




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                                     136                  142 UNITED STATES TAX COURT REPORTS                                     (131)


                                     decree or separation instrument executed on or before July
                                     2, 2008, that unconditionally allows the noncustodial parent
                                     to claim an exemption for a child, if the pages constitute a
                                     statement substantially similar to Form 8332 under the
                                     requirements in effect at the time the decree or agreement
                                     was executed.’’).
                                       Our recent Opinion in Shenk v. Commissioner, 140 T.C.
                                     200 (2013), involved the taxable year 2009, to which section
                                     1.152–4(e)(1)(ii), Income Tax Regs., applied. However, the
                                     divorce decree in Shenk was entered in 2003. Id. at 201–202.
                                     Nevertheless, in dictum (the Opinion was decided on other
                                     grounds) in footnote 3 we stated:
                                           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 writ-
                                           ten declaration’’). * * * See Armstrong v. Commissioner, 139 T.C. 468
                                           (2012); 26 C.F.R. sec. 1.152–4(e)(1)(i). [Id. at 206 n.3.]

                                     For reasons previously stated we believe that the above
                                     dictum in Shenk was incomplete and that a court order or
                                     decree or a separation agreement entered prior to July 2,
                                     2008, can be a written declaration if it satisfies the other
                                     requirements in effect at the time of the entry. See sec.
                                     1.152–4(e)(5), Income Tax Regs.
                                       We must now determine whether the other requirements
                                     for a written declaration, that were in existence when the
                                     agreed entry was filed, have been met in order for the agreed
                                     entry to qualify as a written declaration under section 152(e).
                                           Signature Requirement
                                        As of February 13, 1998, section 152(e)(2)(A) provided that
                                     the noncustodial parent could claim the dependency exemp-
                                     tion deduction if ‘‘the custodial parent signs a written dec-
                                     laration (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 begin-
                                     ning in such calendar year’’. (Emphasis added.) The signa-
                                     ture requirement is derived from the plain language of sec-
                                     tion 152(e)(2)(A) that was in effect at the time the agreed
                                     entry was filed.
                                        ‘‘This Court consistently has held that section 152(e)(2)
                                     clearly and unambiguously requires the custodial parent to




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                                     (131)                           SWINT v. COMMISSIONER                                         137


                                     sign a written declaration releasing the dependency exemp-
                                     tion for his or her child to the noncustodial parent.’’ Miller
                                     v. Commissioner, 114 T.C. at 193. ‘‘Satisfying the signature
                                     requirement is critical to the successful release of the
                                     dependency exemption within the meaning of section
                                     152(e)(2).’’ Id. at 190. ‘‘Section 152(e)(2) and the cor-
                                     responding regulations require, unequivocally, that the sig-
                                     nature of the custodial parent be attached to the return of
                                     a noncustodial parent claiming a dependency exemption,
                                     regardless of the form or nature of the documentation
                                     attached to the return.’’ Neal v. Commissioner, T.C. Memo.
                                     1999–97, 1999 Tax Ct. Memo LEXIS 113, at *14; see also
                                     Shenk v. Commissioner, 140 T.C. at 206; Paulson v. Commis-
                                     sioner, T.C. Memo. 1996–560, 1996 Tax Ct. Memo LEXIS
                                     579, at *10 (‘‘Petitioner did not attach IRS Form 8332 to his
                                     returns for any of the years in question, nor did he attach
                                     any other written statement, signed by his former spouse,
                                     which would, in substance, comply with the requirements of
                                     section 152(e)(2)(A)’’. (Emphasis added.)). A State court order
                                     that is not signed by the custodial parent does not satisfy the
                                     express statutory requirements of section 152(e)(2)(A). See
                                     Miller v. Commissioner, 114 T.C. at 196.
                                        The agreed entry was not signed by the custodial parent.
                                     Accordingly, we hold that the agreed entry did not satisfy the
                                     signature requirement of section 152(e)(2)(A).
                                           Unconditional Declaration Requirement
                                        As of February 13, 1998, section 152(e)(2)(A) provided that
                                     the noncustodial parent could claim the dependency exemp-
                                     tion deduction if ‘‘the custodial parent signs a written dec-
                                     laration (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 begin-
                                     ning in such calendar year’’. (Emphasis added.) The language
                                     ‘‘will not claim’’ in section 152(e)(2)(A) is unconditional. As a
                                     result, in order for a written declaration to comply with sec-
                                     tion 152(e)(2)(A) the declaration by the custodial parent that
                                     he or she ‘‘will not claim such child as a dependent’’ must
                                     also be unconditional. This Court has previously held that a
                                     conditional declaration does not comply with section
                                     152(e)(2)(A). See Armstrong v. Commissioner, 139 T.C. at 474
                                     (‘‘her conditional declaration is at odds with the statute’’); see




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                                     138                 142 UNITED STATES TAX COURT REPORTS                                     (131)


                                     also Gessic v. Commissioner, T.C. Memo. 2010–88, 2010 Tax
                                     Ct. Memo LEXIS 93, at *7–*8; White v. Commissioner, T.C.
                                     Memo. 1996–438, 1996 Tax Ct. Memo LEXIS 455, at *8.
                                        Prior to 1985, the definition of ‘‘dependent’’ led to substan-
                                     tial controversy in cases involving divorced or separated tax-
                                     payers because determining which parent provided over one-
                                     half of a child’s support presented ‘‘difficult problems of proof
                                     and substantiation.’’ H.R. Rept. No. 98–432 (Part 2), at 1498
                                     (1984), 1984 U.S.C.C.A.N. 697, 1140; see also Miller v.
                                     Commissioner, 114 T.C. at 187. In 1984, Congress amended
                                     section 152(e) to remove the requirement for the noncustodial
                                     parent to pay child support in excess of certain thresholds.
                                     See Deficit Reduction Act of 1984, Pub. L. No. 98–369, sec.
                                     423(a), 98 Stat. at 799. Instead, Congress required that the
                                     custodial parent sign a written declaration that he or she
                                     ‘‘will not claim’’ the child as a dependent. See id.; sec.
                                     152(e)(2)(A). This amendment removed the substantial evi-
                                     dentiary disputes that this Court previously had to resolve in
                                     determining which parent could claim the deduction. If the
                                     dependency exemption deduction was permitted to be
                                     released upon the satisfaction of a conditional declaration,
                                     this Court would have to revert to resolving those ‘‘difficult
                                     problems of proof and substantiation’’ that we were supposed
                                     to leave behind with the prior scheme. See Armstrong v.
                                     Commissioner, 139 T.C. at 475.
                                        Petitioner argues that we should reconsider our previous
                                     Opinions in Miller, Armstrong, and Shenk regarding the sig-
                                     nature and unconditional waiver requirements because the
                                     import of the transitional rule as it affects the signature and
                                     unconditional waiver requirements was not before the Court
                                     in those cases. We decline this invitation. Those cases all
                                     involved the sufficiency of purported written declarations
                                     made prior to July 2, 2008, and correctly considered the
                                     statutory and regulatory requirements in existence at the
                                     time the writings were created. The transition rule does not
                                     eliminate any requirements for a valid written declaration
                                     that were in existence before July 2, 2008. In fact, the transi-
                                     tion rule confirms the validity of the requirements that were
                                     in existence before the effective date. See sec. 1.152–4(e)(5),
                                     Income Tax Regs. (quoted supra p. 135).
                                        The agreed entry provided that Mr. Swint would be enti-
                                     tled to claim the minor child only if he was current in his




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                                     (131)                           SWINT v. COMMISSIONER                                         139


                                     child support obligations. If Mr. Swint was not current on
                                     those obligations, then Ms. Wilson would have been entitled
                                     to claim the minor child. The release of the dependency
                                     exemption deduction by Ms. Wilson in the agreed entry was
                                     conditional. Accordingly, we hold that the declaration in the
                                     agreed entry did not satisfy the unconditional declaration
                                     requirement of section 152(e)(2)(A).
                                           Conclusion
                                        As of February 13, 1998, section 152(e)(2)(A) required the
                                     custodial parent to sign a written declaration that he or she
                                     ‘‘will not claim’’ the child as a dependent. The agreed entry
                                     did not satisfy the signature requirement or the uncondi-
                                     tional declaration requirement. Accordingly, we hold that the
                                     agreed entry did not satisfy the requirements for the form of
                                     a written declaration as of February 13, 1998. Therefore,
                                     under section 152 the minor child was not a qualifying child
                                     of Mr. Swint for the year at issue. As a result, petitioner is
                                     not entitled to a dependency exemption deduction for the
                                     minor child for the year at issue.
                                     Child Tax Credit

                                        A taxpayer is entitled to a child tax credit for ‘‘each quali-
                                     fying child’’, as defined in section 152, who has not reached
                                     the age of 17. Sec. 24(a), (c)(1). Given our determination that,
                                     under section 152, the minor child was not a ‘‘qualifying
                                     child’’ of Mr. Swint for the year at issue, it follows that peti-
                                     tioner is not entitled to a child tax credit for the minor child
                                     for that year.
                                        In reaching our decision, we have considered all arguments
                                     made by the parties, and to the extent not mentioned or
                                     addressed, they are irrelevant or without merit.
                                        To reflect the foregoing,
                                                                           Decision will be entered for respondent.

                                                                               f




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