IRS gets firm direction from Tax Court on never-married couples with dependents

For reasons political or otherwise, the IRS has been resistant in recent years in allowing dependency exemption rules to apply to couples who have never been married and who are living apart. While Code Sec. 152(e)(1) provides rules for assigning the exemption to non-custodial parents or others who provide support for a child, the IRS has taken the stance that the rules don’t apply in the case of parents who have never married. Now those rules do apply as a result of the Tax Court’s decision in J.R. King. Tax planning professionals can now assign the dependency exemption to the non-custodial parent or even to another person who provides significant support for a child — even if it is less than half of the overall support for the child. Three tax experts provide an overview of the case and its impact in a recent issue of TAXES: The Tax Magazine.

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This story is from the CCH’s monthly Focus on Tax newsletter, which provides advise and guidance on federal and state tax issues for tax and accounting professionals.

Read this article from CCH’s Journal of Taxation of Financial Products.

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Wolters Kluwer Tax and Accounting

Wolters Kluwer Tax and Accounting is a leading provider of software solutions and local expertise that helps tax, accounting, and audit professionals research and navigate complex regulations, comply with legislation, manage their businesses and advise clients with speed, accuracy and efficiency. Wolters Kluwer Tax and Accounting is part of Wolters Kluwer N.V. (AEX: WKL), a global leader in information services and solutions for professionals in the health, tax and accounting, risk and compliance, finance and legal sectors. We help our customers make critical decisions every day by providing expert solutions that combine deep domain knowledge with specialized technology and services. Wolters Kluwer reported 2016 annual revenues of €4.3 billion. The company, headquartered in Alphen aan den Rijn, the Netherlands, serves customers in over 180 countries, maintains operations in over 40 countries and employs 19,000 people worldwide. Wolters Kluwer shares are listed on Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices. Wolters Kluwer has a sponsored Level 1 American Depositary Receipt program. The ADRs are traded on the over-the-counter market in the U.S. (WTKWY).

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