Dependency Custody Ends When Child Reaches Age of Majority

Dependency – “Custody” Ends When Child Reaches Age of Majority

Mr. Boltinghouse had a few difficulties filing his 2003 income tax return. First he filed a Form 1040A showing zero income and claiming a refund of the entire withholding taxes (using normal tax protestor arguments). IRS refused to process the return. Then Mr. Boltinghouse filed a Form 1040NR again claiming he was not subject to taxation by the United States. Finally after receiving a Notice of Deficiency and filing a petition to Tax Court, Mr. Boltinghouse gave IRS an unsigned Form 1040 with a Schedule A and claiming an exemption for Brandi, his daughter. Brandi lived with Mr. Boltinghouse’s ex-wife during 2003.

Tax Court agreed with IRS on denying the dependency exemption for Brandi. The court case write up does not mention whether a Form 8332 was signed by Mr. Boltinghouse’s ex-wife, however Tax Court clearly stated the special rules for children of divorced parents does not apply here. Brandi had turned 18, the age of majority in Virginia, during March 2003 and was therefore not in the legal custody of either parent for more than ½ of the year. Since neither parent had legal custody for more than ½ of the year, the special rules were not applicable.

This left Mr. Boltinghouse having to show the total cost of Barndi’s support for the year 2003 and that he provided more than 50% of the total. Although the total amount does not have to be precise, it must be convincing enough to show Mr. Boltinghouse provided over 50% of the total. Since Mr. Boltinghouse did not provide the total amount spent for Brandi’s support for 2003, he was unable to prove he had spent over 50% of Brandi’s support.

The issue of a dependency exemption for a child reaching the age of majority was also discussed in other cases including Ferguson (TC Memo 1994-114) and Kaechele (TC Memo 1992-457).

Michael K Boltinghouse, TC Memo 2007-324

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This text has been shared with you courtesy of: David & Mary Mellem, EAs & Ashwaubenon Tax Professionals, 920-496-1065 (fax 920-496-9111) [email protected], [email protected], [email protected], and [email protected].

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