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.