This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

24192 

Vol. 72, No. 84 

Wednesday, May 2, 2007 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 1 

[REG–149856–03] 

RIN 1545–BD01 

Dependent Child of Divorced or 

Separated Parents or Parents Who 

Live Apart 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: This document contains 

proposed regulations relating to a claim 

that a child is a dependent by parents 

who are divorced, legally separated 

under a decree of separate maintenance, 

separated under a written separation 

agreement, or who live apart at all times 

during the last 6 months of the calendar 

year. The proposed regulations reflect 

amendments under the Working 

Families Tax Relief Act of 2004 

(WFTRA) and the Gulf Opportunity 

Zone Act of 2005 (GOZA). 

DATES: Written or electronic comments 

or a request for a public hearing must 

be received by July 31, 2007. 

ADDRESSES: Send submissions to 

CC:PA:LPD:PR (REG–149856–03), Room 

5203, Internal Revenue Service, POB 

7604, Ben Franklin Station, Washington, 

DC 20044. Submissions may be handdelivered Monday through Friday 

between the hours of 8 a.m. and 4 p.m. 

to CC:PA:LPD:PR (REG–149856–03), 

Courier’s Desk, Internal Revenue 

Service, 1111 Constitution Avenue, 

NW., Washington, DC. Alternatively, 

taxpayers may submit comments 

electronically via the IRS internet site 

via the Federal eRulemaking Portal at 

http://www.regulations.gov (indicate 

IRS and REG–149856–03). 

FOR FURTHER INFORMATION CONTACT: 

Concerning the proposed regulations, 

Victoria Driscoll (202) 622–4920; 

concerning the submission of comments 

and/or a request for a hearing, Regina 

Johnson (202) 622–3175 (not toll-free 

numbers). 

SUPPLEMENTARY INFORMATION: 

Paperwork Reduction Act 

The IRS and the Department of the 

Treasury, as part of their continuing 

efforts to reduce paperwork and 

respondent burden, invite the general 

public to comment on proposed and/or 

continuing collections of information in 

accordance with the Paperwork 

Reduction Act of 1995 (PRA) (44 U.S.C. 

3506(c)(2)(A)). This helps to ensure that 

requested data are provided in the 

desired format, reporting burden (time 

and financial resources) is minimized, 

collection instruments are clearly 

understood, and the impact of collection 

requirements on respondents is properly 

assessed. The IRS and the Department 

solicit comments on the information 

collection request (ICR) included in this 

proposed regulatory action. A copy of 

the ICR may be obtained by contacting 

the OMB Unit, SE:W:CAR:MP:T:T:SP, 

Internal Revenue Service, Room 6406, 

1111 Constitution Ave., NW., 

Washington, DC 20224. 

The collection of information in this 

proposed rule is being reviewed by the 

Office of Management and Budget 

(OMB) in accordance with the 

Paperwork Reduction Act of 1995 in 

connection with OMB Control Number 

1545–0074. This control number is 

assigned to all information collections 

associated with individual tax returns 

(series 1040 and associated forms and 

schedules, and related regulatory 

information collections). Information 

collections associated with control 

number 1545–0074 are subject to annual 

public comment and approval by OMB 

in accordance with the Paperwork 

Reduction Act. 

The collection of information in these 

proposed regulations is in § 1.152–4(d). 

The information will help the IRS 

determine if a taxpayer may claim a 

child as a dependent when the parents 

of the child are divorced or separated or 

lived apart at all times during the last 

six months of a calendar year. The 

collection of information is required to 

obtain a benefit. The information will be 

reported on IRS Form 8332. The time 

needed to complete and file this form 

will vary depending on individual 

circumstances. The estimated burden 

for individual taxpayers filing this form 

is included in the estimates shown in 

the instructions for their individual 

income tax return. 

The public is invited to provide 

comments on this information 

collection, particularly comments that: 

Evaluate whether the proposed 

collection of information is necessary 

for the proper performance of the 

functions of the IRS, including whether 

the information will have practical 

utility; 

Evaluate the burden of the proposed 

collection of information, including 

how the burden on those who are to 

respond may be minimized, including 

through the use of appropriate 

automated, electronic, mechanical, or 

other technological collection 

techniques or other forms of information 

technology, such as permitting 

electronic submission of responses; and 

Enhance the quality, utility, and 

clarity of the information to be 

collected. 

Comments should be sent to the 

Office of Information and Regulatory 

Affairs, OMB, Room 10235, New 

Executive Office Building, Washington, 

DC 20503; Attention: Desk Officer for 

the Department of the Treasury. 

Comments may be submitted through 

July 2, 2007. 

Background 

This document contains proposed 

amendments to 26 CFR part 1 relating 

to section 152(e) and the entitlement of 

divorced or separated parents or parents 

who live apart at all times during the 

last 6 months of the calendar year to 

claim a child as a dependent. 

Under section 151, a taxpayer may 

deduct an exemption amount for a 

dependent. Section 152, as amended by 

section 201 of WFTRA (Public Law No. 

108–311, 118 Stat. 1166), defines 

dependent in general as a qualifying 

child or a qualifying relative. 

Section 152(c), which defines 

qualifying child, states that the 

qualifying child must have the same 

principal place of abode as the taxpayer 

for more than one-half of the taxable 

year. Section 152(c)(1)(B). Section 

152(c)(4)(B) provides that, if both 

parents of a child claim the child as a 

qualifying child and do not file a joint 

return together, the child is treated as 

the qualifying child of the parent with 

whom the child resides for the longer 

period of time during the taxable year. 

If the child resides with both parents for 

an equal amount of time during the 

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Federal Register / Vol. 72, No. 84 / Wednesday, May 2, 2007 / Proposed Rules 24193 

taxable year, the child is treated as the 

qualifying child of the parent with the 

higher adjusted gross income. As part of 

the definition of a qualifying relative, 

section 152(d)(1)(C) requires that the 

taxpayer provide over one-half of the 

individual’s support for the calendar 

year. The principal place of abode 

requirement of section 152(c)(1)(B), the 

tie-breaking rule of section 152(c)(4)(B), 

and the support rule of section 

152(d)(1)(C), do not apply if section 

152(e) applies. 

Section 152(e), which was amended 

by section 404 of GOZA (Public Law No. 

109–135, 119 Stat. 2577), provides rules 

for parents who (1) are divorced or 

legally separated under a decree of 

divorce or separate maintenance, (2) are 

separated under a written separation 

agreement, or (3) live apart at all times 

during the last 6 months of the calendar 

year. Under section 152(e)(1), a child of 

parents described in section 152(e) is 

treated as the qualifying child or 

qualifying relative of the noncustodial 

parent if the child receives over one-half 

of the child’s support during the 

calendar year from the child’s parents, 

the child is in the custody of one or both 

of the child’s parents for more than onehalf of the calendar year, and the 

requirements of section 152(e)(2) or 

section 152(e)(3) are met. 

The requirements of section 152(e)(2) 

are met if the custodial parent signs a 

written declaration that the custodial 

parent will not claim a child as a 

dependent for a taxable year and the 

noncustodial parent attaches the 

declaration to the noncustodial parent’s 

tax return. The requirements of section 

152(e)(3) are met if a qualified pre-1985 

instrument allocates the dependency 

exemption to the noncustodial parent 

and the noncustodial parent provides at 

least $600 for the support of the child 

during the calendar year. 

Section 152(e)(4) defines custodial 

parent as the parent having custody for 

the greater portion of the calendar year 

and noncustodial parent as the parent 

who is not the custodial parent. 

If a child is treated as the qualifying 

child or qualifying relative of the 

noncustodial parent under section 

152(e), then that parent may claim the 

child for purposes of the dependency 

deduction under section 151 and the 

child tax credit under section 24, if the 

other requirements of those provisions 

are met. Whether a child is a qualifying 

child for purposes of head of household 

filing status, the child and dependent 

care credit, or the earned income credit, 

is determined without regard to section 

152(e). See sections 2(b)(1)(A)(i) (head 

of household), 21(e)(5) (dependent care 

credit), and 32(c)(3) (earned income 

credit). 

The special rule of section 152(e)(1) 

for parents living apart during the last 

six months of the calendar year was 

added by section 423(a) of the Deficit 

Reduction Act of 1984 (Public Law No. 

98–369, 98 Stat. 494) (the 1984 Act). 

The 1984 Act also amended the 

exceptions in section 152(e)(2). 

Regulations under section 152(e)(1) and 

(2) (§ 1.152–4 of the Income Tax 

Regulations) were published on March 

20, 1971, and amended on October 15, 

1971, and August 20, 1979. Temporary 

regulations reflecting the amendments 

made by the 1984 Act (§ 1.152–4T) 

were published on August 31, 1984. 

Explanation of Provisions 

These proposed regulations update §

1.152–4 by deleting obsolete provisions, 

revising language to improve clarity, 

and incorporating the provisions of §

1.152–4T. The proposed regulations also 

provide guidance on issues that have 

arisen in the administration of section 

152(e). 

1. Definition of Custodial Parent 

Under the proposed regulations, the 

custodial parent is the parent with 

whom the child resides for the greater 

number of nights during the calendar 

year. The noncustodial parent is the 

parent who is not the custodial parent. 

The proposed regulations further 

provide that, if a child is temporarily 

absent from a parent’s home for a night, 

the child is treated as residing with the 

parent with whom the child would have 

resided for the night. However, if the 

child resides with neither parent for a 

night, for example because another 

party is entitled to custody of the child 

for that night, the child is treated as not 

residing with either parent for that 

night. Comments are requested 

specifically on alternative methods of 

allocating nights when a child resides 

with neither parent and whether nights 

residing with neither parent should not 

be allocated to either parent. The 

proposed regulations provide a tiebreaking rule that, if a child resides with 

each parent for an equal number of 

nights during the calendar year, the 

parent with the higher adjusted gross 

income for the calendar year is treated 

as the custodial parent. Cf. section 

152(c)(4)(B). 

Sections 151 and 152, not state law, 

determine whether a divorced or 

separated parent may claim an 

exemption for a child for Federal 

income tax purposes. A state court order 

or decree does not operate to allocate 

the federal exemption between parents. 

2. Requirements for Release of the Right 

To Claim a Child 

Section 152(e)(2) provides that a 

custodial parent may release a claim to 

an exemption for a child by signing a 

written declaration (in such form and 

manner as the Secretary may prescribe 

by regulations) that he or she will not 

claim the child as a dependent. The 

noncustodial parent must attach the 

written declaration to the tax return to 

claim a dependency exemption for the 

child. Section 1.152–4T, Q&A–3, states 

that the written declaration may be 

made on a form developed by the IRS. 

Form 8332, Release of Claim to 

Exemption for Child of Divorced or 

Separated Parents, currently is used for 

this purpose. The temporary regulations 

further provide that any declaration not 

made on that form must conform to the 

substance of the form. Section 1.152–4T, 

Q&A–4, states that a claim to an 

exemption may be released for a single 

year, for a number of years, or for all 

future years, as specified in the 

declaration. 

The proposed regulations incorporate 

these rules and further provide that a 

written declaration must include an 

unconditional statement that the 

custodial parent will not claim the child 

as a dependent for the specified year or 

years. A statement is unconditional if it 

does not expressly condition the 

custodial parent’s waiver of the right to 

claim the child as a dependent on the 

noncustodial parent’s meeting of an 

obligation such as the payment of 

support. The written declaration must 

specify the year or years for which the 

release is effective. A written 

declaration that does not specify a year 

or years has no effect. A written 

declaration that specifies all future years 

is treated as specifying the first taxable 

year after the taxable year the release is 

executed and all subsequent taxable 

years. A court order or decree may not 

serve as the written declaration required 

by section 152(e)(2). 

3. Revocation of Release of Claim 

The proposed regulations provide that 

a custodial parent who released the 

right to claim a child may revoke the 

release for future taxable years by 

providing written notice of the 

revocation to the other parent. The 

revocation may be made on a form 

designated by the IRS, such as Form 

8332, which may be revised for this 

purpose, or by a written declaration that 

conforms to the substance of that form, 

whether or not the release was made on 

the form, and must specify the year or 

years for which the revocation is 

effective. A revocation that does not 

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24194 Federal Register / Vol. 72, No. 84 / Wednesday, May 2, 2007 / Proposed Rules 

specify a year or years has no effect. A 

revocation that specifies all future years 

is treated as specifying the first taxable 

year after the taxable year the revocation 

is executed and all subsequent taxable 

years. The revocation may be effective 

no earlier than the taxable year that 

begins in the first calendar year after the 

calendar year in which the parent 

revoking the release provides notice of 

the revocation to the other parent. The 

parent revoking the release must attach 

the original or a copy of the revocation 

to the parent’s tax return for any taxable 

year the parent claims the exemption as 

a result of the revocation, and keep a 

copy of the revocation and evidence of 

delivery of written notice of revocation 

to the noncustodial parent. 

4. Never Married Parents 

In King v. Commissioner, 121 T.C. 24 

(2003), the United States Tax Court 

decided that section 152(e) applies to 

parents who had never married each 

other. The parents lived apart for the 

years at issue, and each had claimed a 

dependency deduction for the same 

child. In concluding that the Form 8332 

executed by the custodial parent 

released her claim to the deduction, the 

court determined that section 

152(e)(1)(A)(iii), which refers to parents 

who ‘‘live apart at all times during the 

last 6 months of the calendar year,’’ 

encompasses both married parents and 

parents who never married each other. 

The proposed regulations follow the 

decision in King v. Commissioner. 

5. Effective Date 

The regulations are proposed to apply 

to taxable years beginning after the date 

the regulations are published as final 

regulations in the Federal Register. 

Special Analyses 

This notice of proposed rulemaking is 

not a significant regulatory action as 

defined in Executive Order 12866. 

Therefore, a regulatory assessment is not 

required. It has also been determined 

that section 553(b) of the Administrative 

Procedure Act (5 U.S.C. chapter 5) does 

not apply to these regulations and, 

because the regulations do not impose a 

collection of information on small 

entities, the Regulatory Flexibility Act 

(5 U.S.C. chapter 6) does not apply. 

Pursuant to section 7805(f) of the Code, 

this notice of proposed rulemaking will 

be submitted to the Chief Counsel for 

Advocacy of the Small Business 

Administration for comment on its 

impact on small business. 

Comments and Requests for a Public 

Hearing 

Before these proposed regulations are 

adopted as final regulations, 

consideration will be given to any 

written (a signed original and eight (8) 

copies) or electronic comments that are 

submitted timely to the IRS. The IRS 

and Treasury Department request 

comments on the clarity of the proposed 

regulations and how they can be made 

easier to understand. All comments will 

be available for public inspection and 

copying. A public hearing may be 

scheduled if requested in writing by any 

person who timely submits written 

comments. If a public hearing is 

scheduled, notice of the date, time, and 

place for the public hearing will be 

published in the Federal Register. 

Drafting Information 

The principal author of these 

regulations is Victoria J. Driscoll of the 

Office of Associate Chief Counsel 

(Income Tax and Accounting). However, 

other personnel from the IRS and 

Treasury Department participated in 

their development. 

List of Subjects in 26 CFR Part 1 

Income taxes, Reporting and 

recordkeeping requirements. 

Proposed Amendment to the 

Regulations 

Accordingly, 26 CFR part 1 is 

proposed to be amended as follows: 

PART 1—INCOME TAXES 

Paragraph 1. The authority citation 

for part 1 is amended by adding an entry 

to read in part as follows: 

Authority: 26 U.S.C. 7805 * * * 

Section 1.152–4 also issued under 26 

U.S.C. 152(e). 

Par. 2. Section 1.152–4 is revised to 

read as follows: 

§ 1.152–4 Special rule for a child of 

divorced or separated parents or parents 

who live apart. 

(a) In general. A taxpayer may claim 

a dependency deduction for a child (as 

defined in section 152(f)(1)) only if the 

child is the qualifying child of the 

taxpayer under section 152(c) or the 

qualifying relative of the taxpayer under 

section 152(d). Section 152(c)(4)(B) 

provides that a child who is claimed as 

a qualifying child by parents who do not 

file a joint return together is the 

qualifying child of the parent with 

whom the child resided for a longer 

period of time during the taxable year 

or, if the child resided with both parents 

for an equal period of time, of the parent 

with the higher adjusted gross income. 

However, a child is treated as the 

qualifying child or qualifying relative of 

the noncustodial parent if the custodial 

parent releases the claim to the 

exemption under section 152(e) and this 

section. 

(b) Release of claim by custodial 

parent—(1) In general. Under section 

152(e)(1), notwithstanding section 

152(c)(1)(B), (c)(4)(B), and (d)(1)(C), a 

child is treated as the qualifying child 

or qualifying relative of the 

noncustodial parent (as defined in 

paragraph (c) of this section) if the 

requirements of paragraphs (b)(2) and 

(b)(3) of this section are met. 

(2) Support, custody, and parental 

status. The requirements of this 

paragraph (b)(2) are met if the parents of 

the child provide over one-half of the 

child’s support for the calendar year, the 

child is in the custody of one or both 

parents for more than one-half of the 

calendar year, and the parents— 

(i) Are divorced or legally separated 

under a decree of divorce or separate 

maintenance; 

(ii) Are separated under a written 

separation agreement; or 

(iii) Live apart at all times during the 

last 6 months of the calendar year 

whether or not they are or were married. 

(3) Release of claim to child. The 

requirements of this paragraph (b)(3) are 

met if— 

(i) The custodial parent signs a 

written declaration that the custodial 

parent will not claim the child as a 

dependent for the taxable year 

beginning in that calendar year and the 

noncustodial parent attaches the 

declaration to the noncustodial parent’s 

return for the taxable year; or 

(ii) A qualified pre-1985 instrument, 

as defined in section 152(e)(3)(B), 

effective for the taxable year beginning 

in that calendar year, provides that the 

noncustodial parent is entitled to the 

dependency exemption for the child 

and the noncustodial parent provides at 

least $600 for the support of the child 

during the calendar year. 

(c) Custodial parent—(1) In general. 

The custodial parent is the parent with 

whom the child resides for a greater 

number of nights during the calendar 

year, and the noncustodial parent is the 

parent who is not the custodial parent. 

(2) Absences. For purposes of this 

paragraph (c), when a child resides with 

neither parent for a night, the child is 

treated as residing with the parent with 

whom the child would have resided for 

the night but for the absence. However, 

if the child would have resided with 

neither parent for a night during an 

absence (for example, because a court 

awarded custody of the child to a third 

party for the period of absence), the 

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Federal Register / Vol. 72, No. 84 / Wednesday, May 2, 2007 / Proposed Rules 24195 

child is treated as residing with neither 

parent for the night of the absence. 

(3) Special rule for equal number of 

nights. If a child is in the custody of one 

or both parents for more than one-half 

of the calendar year and the child 

resides with each parent for an equal 

number of nights during the calendar 

year, the parent with the higher adjusted 

gross income for the calendar year is 

treated as the custodial parent. 

(d) Written declaration—(1) Form of 

declaration—(i) In general. The written 

declaration under paragraph (b)(3)(i) of 

this section must constitute the 

custodial parent’s unconditional release 

of the parent’s claim to the child as a 

dependent for the year or years for 

which the declaration is effective. A 

declaration is unconditional if it does 

not expressly condition the custodial 

parent’s release of the right to claim the 

child as a dependent on the 

noncustodial parent’s meeting of an 

obligation such as the payment of 

support. A written declaration must 

name the noncustodial parent to whom 

the exemption is released. A written 

declaration must specify the year or 

years for which it is effective. A written 

declaration that does not specify a year 

or years has no effect. A written 

declaration that specifies all future years 

is treated as specifying the first taxable 

year after the taxable year of execution 

and all subsequent taxable years. A 

court order or decree may not serve as 

the written declaration. 

(ii) Form designated by IRS. A written 

declaration may be made on a form 

designated by the IRS (currently Form 

8332, Release of Claim to Exemption for 

Child of Divorced or Separated Parents). 

A written declaration not on the form 

designated by the IRS must conform to 

the substance of that form. 

(2) Attachment to return. A 

noncustodial parent must attach the 

original written declaration to the 

parent’s return for the taxable year in 

which the child is claimed as a 

dependent. If a release of a claim to a 

child is for more than one year, the 

noncustodial parent must attach the 

original written declaration to the 

parent’s return for the first taxable year 

for which the release is effective. The 

noncustodial parent must attach a copy 

of the written declaration to the parent’s 

return for each subsequent taxable year 

for which the noncustodial parent 

claims the child as a dependent. 

(3) Revocation of written 

declaration—(i) In general. A written 

declaration described in paragraph 

(d)(1) of this section may be revoked by 

providing written notice of the 

revocation to the other parent. The 

revocation may be effective no earlier 

than the taxable year that begins in the 

first calendar year after the calendar 

year in which the parent revoking the 

written declaration provides the written 

notice. 

(ii) Form of revocation. The 

revocation may be made on a form 

designated by the IRS whether or not 

the written declaration was made on a 

form designated by the IRS. A 

revocation not on that form must 

conform to the substance of the form. 

The revocation must specify the year or 

years for which the revocation is 

effective. A revocation that does not 

specify a year or years has no effect. A 

revocation that specifies all future years 

is treated as specifying the first taxable 

year after the taxable year the revocation 

is executed and all subsequent taxable 

years. 

(iii) Attachment to return. The 

custodial parent must attach the original 

revocation to the parent’s return for the 

taxable year for which the custodial 

parent claims a child as a dependent. If 

a revocation is for more than one year, 

the custodial parent must attach the 

original revocation to the parent’s return 

for the first taxable year for which the 

revocation is effective and a copy of the 

revocation to the parent’s return for 

each subsequent taxable year for which 

the custodial parent claims the child as 

a dependent. The custodial parent must 

keep a copy of the revocation and 

evidence of delivery of written notice of 

the revocation to the noncustodial 

parent. 

(e) Coordination with other sections. 

A child who is treated as the qualifying 

child or qualifying relative of the 

noncustodial parent under section 

152(e) and this section is treated as a 

dependent of both parents for purposes 

of sections 105(b), 132(h)(2)(B), and 

213(d)(5). 

(f) Examples. The provisions of this 

section are illustrated by the following 

examples which assume that each 

taxpayer’s taxable year is the calendar 

year, one or both of the child’s parents 

provide over one-half of the child’s 

support for the calendar year, the child 

is in the custody of one or both parents 

for more than one-half of the calendar 

year, and the child otherwise meets the 

requirements of a qualifying child under 

section 152(c). In addition, in each of 

the examples, there is no qualified pre1985 instrument in effect. The examples 

are as follows: 

Example 1. (i) B and C, the parents of 

Child, are divorced. In 2007, Child resides 

with B for 7 months and with C for 5 months. 

B signs a Form 8332 for 2007 allowing C to 

claim Child as a dependent for that year. 

(ii) Under paragraph (c) of this section, B 

is the custodial parent of Child in 2007 

because B is the parent with whom Child 

resides for the greater number of nights in 

2007. Because B signs a Form 8332, under 

paragraph (b) of this section, Child is treated 

as the qualifying child of C if C attaches the 

Form 8332 to C’s 2007 return. 

Example 2. (i) D and E, the parents of 

Child, are divorced. In 2007, Child resides 

with D for 7 months and with E for 5 months. 

D, the custodial parent, does not execute a 

Form 8332 or similar declaration for 2007. 

(ii) Because D does not execute a Form 

8332 or similar declaration for 2007, section 

152(e) and this section do not apply to 

determine whether Child is treated as the 

qualifying child of D or E. Instead, whether 

Child is the qualifying child of D or E is 

determined under section 152(c). 

Example 3. F and G, who never married, 

are the parents of Child. In 2007, Child 

spends alternate weeks residing with F and 

G. During a week when Child is residing with 

F, F gives Child permission to spend a night 

at the home of a friend. Under paragraph 

(c)(2) of this section, the night Child spends 

at the friend’s home is treated as a night in 

which Child resides with F for purposes of 

determining whether Child is residing with 

F or G for the greater number of nights in the 

calendar year. 

Example 4. J and K are the divorced 

parents of Child. In 2007, Child spends 

alternate periods residing with J or K. In 

August of 2007, J and Child spend 10 nights 

together in a hotel while on vacation. Under 

paragraph (c) of this section, the 10 nights 

when J and Child are on vacation are treated 

as nights in which Child resides with J for 

purposes of determining whether Child is 

residing with J or K for the greater number 

of nights in the calendar year. 

Example 5. (i) In 2006, L and M, the 

parents of Child, execute a written separation 

agreement. The agreement provides that 

Child will live with L and that M will make 

monthly child support payments to L. The 

agreement further provides that L will not 

claim Child as a dependent in 2007 and in 

subsequent alternate years. The agreement 

does not expressly condition L’s agreement 

not to claim Child as a dependent on M’s 

payment of child support or any other 

condition. The agreement contains all the 

other information requested on Form 8332. M 

attaches the agreement to M’s tax returns for 

2007 and 2009. 

(ii) In 2008, M fails to provide child 

support for Child, and L signs a Form 8332 

revoking the release of L’s right to claim 

Child as a dependent for 2009 and delivers 

a copy of the Form 8332 to M. L attaches the 

Form 8332 revoking the release to L’s tax 

return for 2009 and keeps a copy of the 

revocation and evidence of delivery of 

written notice to M. 

(iii) M may claim Child as a qualifying 

child for 2007 because L releases the right to 

claim Child as a dependent under paragraph 

(b)(3) of this section by executing the 

separation agreement, and M attaches the 

separation agreement to M’s tax return in 

accordance with paragraphs (d)(1) and (d)(2) 

of this section. The separation agreement 

qualifies as a written declaration under 

paragraph (d)(1) of this section because L’s 

agreement not to claim Child as a dependent 

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24196 Federal Register / Vol. 72, No. 84 / Wednesday, May 2, 2007 / Proposed Rules 

is not conditioned on M’s payment of 

support or meeting of any other obligation, 

and the agreement otherwise conforms to the 

substance of Form 8332. For 2009, only L 

may claim Child as a qualifying child 

because in 2008 L revokes the release of the 

claim in accordance with paragraph (d)(3) of 

this section, and the revocation takes effect 

in 2009, the taxable year that begins in the 

first calendar year after L provides written 

notice of the revocation to M. 

Example 6. The facts are the same as 

Example 5, except that the agreement 

expressly states that L agrees not to claim 

Child as a dependent only if M is current in 

the payment of support for Child at the end 

of the calendar year. The separation 

agreement does not qualify as a written 

declaration under paragraph (d)(1) of this 

section because L’s agreement not to claim 

Child as a dependent is conditioned on M’s 

payment of support. Therefore, M may not 

claim Child as a qualifying child in 2007 or 

2009. 

Example 7. (i) N and P are the divorced 

parents of Child. Child resides with N for ten 

months and with P for two months in each 

year 2007 through 2009. In 2007, N provides 

a written statement to P that provides that N 

will not claim Child as a dependent but does 

not specify a year or years. P attaches the 

statement to P’s returns for 2007 through 

2009. 

(ii) Because the written statement provided 

by N does not specify the year or years for 

which P may claim Child as a qualifying 

child, under paragraph (d)(1) of this section, 

the written statement is not a written 

declaration that conforms to the substance of 

Form 8332. Therefore, P may not claim Child 

as a qualifying child in 2007 through 2009. 

Example 8. (i) R and S are the divorced 

parents of Child. Child resides solely with R. 

The divorce decree requires S to pay child 

support to R and requires R to execute a 

Form 8332 to release the right to claim Child 

as a qualifying child to S. R fails to sign a 

Form 8332 for 2007, and S attaches an 

unsigned Form 8332 to S’s return for 2007. 

(ii) Child is the qualifying child of R for 

2007. The order in the divorce decree 

requiring R to execute a Form 8332 is 

ineffective to allocate the right to claim Child 

as a qualifying child to S. Furthermore, under 

paragraph (d)(1) of this section, the unsigned 

Form 8332 does not conform to the substance 

of Form 8332. Therefore, S may not claim 

Child as a qualifying child in 2007. 

(iii) If, however, R executes a Form 8332 

for 2007 and S attaches the Form 8332 to S’s 

return, then S may claim Child as a 

qualifying child for 2007 under paragraph 

(d)(1) of this section. 

(g) Effective date. This section applies 

to taxable years beginning after the date 

these regulations are published as final 

regulations in the Federal Register. 

Kevin M. Brown, 

Deputy Commissioner for Services and 

Enforcement. 

[FR Doc. E7–8378 Filed 5–1–07; 8:45 am] 

BILLING CODE 4830–01–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 165 

[CGD09–07–014] 

RIN 1625–AA00 

Safety Zone; Baileys Harbor Fireworks, 

Baileys Harbor, WI 

AGENCY: Coast Guard, DHS. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The Coast Guard proposes to 

establish a temporary safety zone on 

Baileys Harbor. This zone is intended to 

restrict vessels from a portion of Baileys 

Harbor during the Baileys Harbor July 5, 

2007 fireworks display. This temporary 

safety zone is necessary to protect 

spectators and vessels from the hazards 

associated with fireworks displays. 

DATES: Comments and related material 

must reach the Coast Guard on or before 

May 17, 2007. 

ADDRESSES: You may mail comments 

and related material to Commander, 

Coast Guard Sector Lake Michigan 

(spw), 2420 South Lincoln Memorial 

Drive, Milwaukee, WI 53207. The Sector 

Lake Michigan Prevention Department 

maintains the public docket for this 

rulemaking. Comments and material 

received from the public, as well as 

documents indicated in this preamble as 

being available in the docket, will 

become part of this docket and will be 

available for inspection or copying at 

the Sector Lake Michigan Prevention 

Department between 8 a.m. and 3 p.m., 

Monday through Friday, except Federal 

holidays. 

FOR FURTHER INFORMATION CONTACT: 

CWO Brad Hinken, Prevention 

Department, Coast Guard Sector Lake 

Michigan, Milwaukee, WI at (414) 747– 

7154. 

SUPPLEMENTARY INFORMATION: 

Request for Comments 

We encourage you to participate in 

this rulemaking by submitting 

comments and related material. If you 

do so, please include your name and 

address, identify the docket number for 

this rulemaking [CGD09–07–014], 

indicate the specific section of this 

document to which each comment 

applies, and give the reason for each 

comment. Please submit all comments 

and related material in an unbound 

format, no larger than 81⁄2 by 11 inches, 

suitable for copying. If you would like 

to know they reached us, please enclose 

a stamped, self-addressed postcard or 

envelope. We will consider all 

comments and material received during 

the comment period. We may change 

this proposed rule in view of them. 

Public Meeting 

We do not now plan to hold a public 

meeting. But you may submit a request 

for a meeting by writing to the Sector 

Lake Michigan Prevention Department 

at the address under ADDRESSES

explaining why one would be 

beneficial. If we determine that one 

would aid this rulemaking, we will hold 

one at a time and place announced by 

a later notice in the Federal Register. 

Background and Purpose 

This temporary safety zone is 

necessary to ensure the safety of vessels 

and spectators from hazards associated 

with a fireworks display. Based on 

accidents that have occurred in other 

Captain of the Port zones, and the 

explosive hazards of fireworks, the 

Captain of the Port Lake Michigan has 

determined fireworks launches in close 

proximity to watercraft pose significant 

risk to public safety and property. The 

likely combination of large numbers of 

recreation vessels, congested waterways, 

darkness punctuated by bright flashes of 

light, alcohol use, and debris falling into 

the water could easily result in serious 

injuries or fatalities. Establishing a 

safety zone to control vessel movement 

around the location of the launch 

platform will help ensure the safety of 

persons and property at these events 

and help minimize the associated risks. 

The comment period for this rule has 

been abbreviated to 15 days in order to 

provide a full 30 day notice period after 

publication before the rule becomes 

effective. 

Discussion of Proposed Rule 

A temporary safety zone is necessary 

to ensure the safety of spectators and 

vessels during the setup, loading and 

launching of a fireworks display in 

conjunction with the Baileys Harbor 

fireworks display. The fireworks display 

will occur between 9 p.m. (local) and 11 

p.m. (local) on July 5, 2007. 

The safety zone for the fireworks will 

encompass all waters of Lake Michigan, 

Baileys Harbor, within the arc of a circle 

with a 600-foot radius from the 

fireworks launch site located in position 

45[deg]04’03’’ N, 087[deg]06’08’’ W 

(NAD 83). 

All persons and vessels shall comply 

with the instructions of the Coast Guard 

Captain of the Port or the designated onscene representative. Entry into, 

transiting, or anchoring within the 

safety zone is prohibited unless 

authorized by the Captain of the Port 

Lake Michigan or his designated onscene representative. The Captain of the 

mmaher on DSK3CLS3C1PROD with $$_JOB