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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