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.

SPONSORED REPORT

Why cybercriminals are targeting CPAs

This free report expands on the most commonly found scams, why education and specialized IT knowledge help to lessen security vulnerabilities, and why every firm should plan carefully for how it would respond to a breach.

PODCAST

How tax reform — and Excel — are changing the CPA Exam

Mike Decker, the vice president of examinations at the AICPA, discusses changes being made to the exam as a result of tax reform — and about how Excel will now be available for use on the test.