TAX COURT OPINION

Case: Cameron W. Schafer
Docket Number: 21152-16S
Judge: Halpern
Opinion Type: bench
Filed: 10/23/2017
Pages: 5

UNITED STATES TAX COU T WASHINGTON, DC 20217 CAMERON W. SCHAFER, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ) ) ) ) ) ) ) Docket No. 21152-16S. ORDER Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it is ORDERED that the Clerk of the Court shall transmit herewith to petitioner and to respondent a copy of the pages of the transcript of the trial in the above case before Judge James S. Halpern at Albuquerque, New Mexico, containing his oral findings of fact and opinion rendered at the trial session at which the case was heard. In accordance with the oral findings of fact and opinion, decision will be entered for respondent. Dated: Washington, D.C. October 23, 2017 (Signed) James S. Halpern Judge SERVED OCT 2 4 2017 3 1 Bench Opinion by Judge James S. Halpern 2 September 26, 2017 3 Cameron W. Schafer v. Commissioner 4 Docket No. 21152-16S 5 6 7 THE COURT: The Court has decided to render oral findings of fact and opinion in this case, and the following represents the Court's oral findings of fact and 8 opinion. 9 The oral findings of fact and opinion shall not be 10 relied upon as precedent in any other case. 11 This bench opinion is made pursuant to the authority 12 granted by section 7459(b) of the Internal Revenue Code of 13 1986, as amended, and Rule 152 of the Tax Court Rules of 14 Practice and Procedure. 15 Unless otherwise indicated, all section references 16 are to the Internal Revenue Code in effect for the year in 17 issue. 18 Respondent determined a deficiency in petitioner's 19 2014 Federal Income Tax of $3,234. Petitioner claimed head 20 of household on his 2014 Federal Income Tax Return and 21 claimed two dependency exemptions for two of his children. 22 A.S. and M.S. Petitioner did not attach to his 2014 return 23 a IRS Form 8332, Release/Revocation of Release of Claim to 24 Exemption for Child by Custodial Parent. He did attach 25 pages from his marital separation agreement addressing the Cribers (973)406-2250|operations@escribers.net|wwyzescribersaet 4 1 parties to the agreement's rights to claim dependency 2 deductions for their children. Respondent made adjustments 3 changing his filing status to single and denying the two 4 dependency exemption deductions. The parties agree that 5 petitioner's correct filing status for 2014 is single. 6 Petitioner in 2014 was no longer married to Colleen 7 Nelson-Schafer. Petitioner and Ms. Nelson-Schafer had 8 9 three children, including A.S. and M.S., and, for their 2014 taxable year, both claimed the two children as 10 dependency exemptions. Ms. Nelson-Schafer did not execute 11 a Form 8332 for 2014. The marital settlement, as amended, 12 entered into by petitioner and Mrs. Nelson-Schafer provided 13 in relevant part that, if child support has been paid in 14 full for each month, the petitioner would claim A.S. and 15 M.S. as dependency exemptions for 2014. The agreement 16 further provides that, if child support has not been paid 17 in full each month, then Ms. Nelson-Schafer would claim the 18 children as dependents. Ms. Nelson-Schafer also agreed to 19 execute Form 8332, which, for 2014, she did not do. 20 Petitioner relies on the settlement agreement to substitute 21 for a Form 8332 and meet the statutory requirements of 22 section 152(e) for the custodial parent to release that 23 parent's claim to the exemption for the year. 24 The facts here are similar to those that we addressed 25 in Armstrong v. Commissioner, 139 T.C. 468 (2012), aff'd, cribers (973)406-2250|operations@escribersnet|wwwæscribers.net 5 1 2 745 F.3d 890 (8th Cir. 2014). In Armstrong, we said that, in order for a document to comply with the substance of 3 Form 8332 and ultimately the statutory provision regarding 4 the custodial parent's written release of the dependency 5 exemption for a specific tax year, the custodial parent's 6 declaration that she "will not claim" the child as a 7 dependent for that year must be unconditional. We also 8 said that a State-court order stemming from arbitration 9 between taxpayer and his ex-wife regarding support of their 10 two children unambiguously stated that ex-wife's obligation 11 to sign Form 8332 or equivalent release of dependency 12 exemption for one of their children was conditioned upon 13 taxpayer's payment of child support, precluding taxpayer's 14 right to that exemption, regardless of whether taxpayer 15 was, in fact, current in his child support obligations. 16 Because the order in Armstrong did not provide 17 unconditionally that ex-wife would not claim the dependency 18 exemption for that child, we disallowed the exemptions 19 claimed by the taxpayer. 20 The facts here are sufficiently similar to those in 21 Armstrong that the rule of the case governs. The 22 settlement agreement only provided a conditional right for 23 petitioner to claim the dependency exemption deductions. 24 Petitioner did not meet the requirements of section 152(e) 25 and is not entitled to the two dependency exemption (973)406-2250|operations@escribersmet{www.escribers.net 6 1 deductions that he claimed for A.S. and M.S. The fact that 2 the Internal Revenue Service may have treated petitioner 3 differently for a prior year, before the Armstrong case was 4 decided, does not bar the Commissioner for arguing for a 5 different result here. 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 We will enter decision for respondent. That concludes this bench opinion. (Whereupon, at 10:19 a.m., the above-entitled matter was concluded.) (973)406-2250|operations@escribers.net|www.escribersmet