AICPA Comments on Child Regs

The AICPA suggested modifications to proposed regulations concerning children claimed as dependents by parents who are separated or divorced. REG-149856-03, released in May, amends Treas. Reg. § 1.1152-4, which specifies support, custody and parental status requirements for children to qualify as dependents of parents who are divorced, separated or live apart from each other. The provisions reflect amendments under the Working Families Tax Relief Act of 2004 and the Gulf Opportunity Zone Act of 2005. In general, they prescribe how a parent may claim a child who spends the greater part of a year with him or her, determined by counting the number of nights the child spends with that parent.

Suggestions by AICPA members and staff on the Individual Tax Technical Resource Panel (TRP) included looking to existing guidance to deal with a potential difficulty also noted by other commenting parties: how to count nights when a child stays with neither parent. Existing guidance already covers temporary absences, but not when a child is away for longer periods, which could be addressed specifically, the TRP said. The group also suggested requiring that a written declaration to release a custodial parent’s claim to the child be made on Form 8332, Release of Claim to Exemption for Child of Divorced or Separated Parents.