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How to Split the Tax Baby: What Would Solomon Do?

35 Pages Posted: 10 Mar 2011  

Robert Nassau

Syracuse University College of Law

Date Written: 2010


For as long as taxpayers have been able to claim deductions or credits for their children, separated parents have argued over which of them is entitled to those benefits. In 1967, Congress enacted legislation to resolve these disputes. That legislation did not accomplish its objectives, so Congress revised those rules in 1984. With a minor tweak those rules remain in place today.

Under the current statute, the parent having custody for the greater portion of the year is generally entitled to the tax benefits. However, that “Custodial Parent” can transfer some of those benefits to the “Noncustodial Parent” by signing a written declaration, in such manner and form as the Treasury Department prescribes, stating that he will not claim the benefits.

For twenty-five years, the Treasury Department allowed an unconditional divorce decree or separation agreement to serve as the written declaration necessary for transferring tax benefits. Abruptly, however, in 2008, the Treasury Department issued new Regulations under which divorce decrees and separation agreements are no longer acceptable. Now, the Noncustodial Parent must obtain a signed Internal Revenue Service Form from the Custodial Parent in order to qualify for the tax benefits – even in cases where the decree or agreement – binding under State law – provides that the Noncustodial Parent is entitled to the benefits.

This Article will explain why there was no reasonable justification for changing the Regulations, and why the Regulations will create unexpected, unnecessary, unreasonable, and difficult-to-surmount problems for Noncustodial Parents. The new Regulations are plain bad and should be repealed.

Keywords: deduction, credit, divorced, separated, tax

Suggested Citation

Nassau, Robert, How to Split the Tax Baby: What Would Solomon Do? (2010). Syracuse Law Review, Vol. 61, No. 1, p. 83, 2010. Available at SSRN:

Robert Nassau (Contact Author)

Syracuse University College of Law ( email )

Syracuse, NY 13244-1030
United States
315-443-4582 (Phone)
315-443-3636 (Fax)

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