                       T.C. Memo. 1995-557



                     UNITED STATES TAX COURT



   THOMAS B. MCCARTHY, JR. AND JANICE R. MCCARTHY, Petitioners
         v. COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 14775-94.                Filed November 27, 1995.



     Thomas B. McCarthy, Jr., pro se.

     Robert E. Williams, Jr., for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION



     PANUTHOS, Chief Special Trial Judge:    This case was heard

pursuant to the provisions of section 7443A(b)(3) and Rules 180,

181, and 182.1



     1
        Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the year in issue.
                               - 2 -

     Respondent determined a deficiency in petitioners' Federal

income tax in the amount of $2,960 for the taxable year 1991.

The only issue in dispute is whether petitioners are entitled to

claimed dependency exemptions.2

     Some of the facts have been stipulated and are so found.     At

the time of filing the petition herein, petitioners resided at

Columbia, Maryland.

     Petitioner Thomas B. McCarthy (hereinafter petitioner) was

married to Rosalie McCarthy on July 18, 1980.   There are three

children of that marriage, born in 1981, 1983, and 1987.    In

March 1989, petitioner and Rosalie McCarthy entered into a

voluntary separation and property settlement agreement.    The

agreement provided for joint legal custody of the children.      The

agreement also provided that the children would reside primarily

with Rosalie McCarthy with weekend, some week night, and summer

visitations with petitioner.   The agreement also provided as

follows:

          Wife agrees that for each calendar year in which
     the Husband shall have made all child support payments
     which he is obligated to make, she shall execute a
     written declaration on a form to be provided by the
     Internal Revenue Service or any applicable state taxing
     authority conforming to the substance of such form
     stating that she will not claim the children as
     dependents for that calendar year. Wife shall give
     such executed declaration to Husband upon his request
     on or after January 1st each year for the calendar year

     2
        Petitioners conceded the adjustment in the notice of
deficiency disallowing $4,120 of the $14,805 mortgage interest
deduction claimed on the 1991 return.
                                 - 3 -

     just ended to enable Husband to attach it to his income
     tax returns.

     A judgment of divorce was entered by the Circuit Court of

Montgomery County, Maryland (hereinafter the county court), on

August 1, 1989.    The March 1989 agreement was incorporated in the

judgement of divorce.

     Subsequent to the divorce decree petitioner married Janice

R. McCarthy.    Rosalie McCarthy also remarried.   Following the

entry of the divorce decree, petitioner and Rosalie McCarthy had

ongoing disputes concerning support payments, visitation rights,

and other provisions of the March 1989 agreement.     Petitioner and

Rosalie McCarthy appeared in the county court on several

occasions in an attempt to resolve some of their disputes.     The

county court issued a number of orders relating to some of the

disputed issues.    At some point in 1991, the county court

determined petitioner to be in arrearage in child support

payments and the county court imposed earnings withholdings

against petitioner's employer.    In early 1992, the county court

reversed its prior ruling and no longer required earnings

withholdings.

     For the taxable year 1991, Rosalie McCarthy was the

custodial parent of the three children.    She did not execute a

written declaration indicating that she was not claiming the

children as dependents.    In fact, Rosalie McCarthy claimed the

children as dependents on her 1991 Federal income tax return.
                                - 4 -

     Petitioner filed a joint 1991 Federal income tax return with

Janice R. McCarthy.    The three children of petitioner's former

marriage were claimed as dependents on the return.    No

declaration of the custodial parent was attached to the 1991

return.

     In the notice of deficiency, respondent disallowed the

claimed dependency exemptions having determined that petitioner,

as the noncustodial parent, is not entitled to claim the

exemptions in the absence of a written declaration from the

custodial parent.    Petitioner argues that he claimed the children

as dependents in prior years and respondent did not disallow said

claim.    He further argues that Rosalie McCarthy wrongfully

refused to provide a written declaration pursuant to the

separation agreement.

     Generally, section 152(e)(1) provides that the custodial

parent is entitled to the exemption for children of divorced or

separated parents.    There are three exceptions to the general

rule.    Section 152(e)(2) provides an exception if the custodial

parent signs a written declaration that the custodial parent will

not claim such child as a dependent for any taxable year

beginning in such calendar year, and the noncustodial parent

attaches such written declaration to the noncustodial parent's

return.    Section 152(e)(3) allows a child to be claimed as a

dependent by a taxpayer other than the custodial parent if there

is a multiple support agreement permitting same.    A further
                                 - 5 -

exception exists in section 152(e)(4) for certain pre-1985

instruments.   In such a situation, a child can be treated as

receiving over half of his support from the noncustodial parent

if a qualified pre-1985 instrument between the parents provides

that the noncustodial parent shall be entitled to any deduction

allowed under section 151, and the noncustodial parent provides

at least $600 of support for such child during such calendar

year.

     It is clear that none of the exceptions apply in this case.

Since petitioners have not satisfied the requirements of section

152(e)(1), they are not entitled to the claimed dependency

exemptions.

     To reflect the foregoing,

                                         Decision will be entered

                                    for respondent.
