Case Name: YOUNG v. YOUNG
Court: Michigan Court of Appeals
Jurisdiction: Michigan
Decision Date: 1990-03-19
Citations: 182 Mich. App. 643
Docket Number: Docket No. 112325
Parties: YOUNG v YOUNG
Judges: Before: Griffin, P.J., and Gillis and Sawyer, JJ.
Reporter: Michigan appeals reports; cases decided in the Michigan Court of Appeals.
Volume: 182
Pages: 643–667

Head Matter:
YOUNG v YOUNG
Docket No. 112325.
Submitted December 12, 1989, at Detroit.
Decided March 19, 1990.
Michael E. Young sought a divorce from Judith E. Young. The April 9, 1984, judgment of divorce of the Macomb Circuit Court granted custody of the two children of the marriage to defendant, ordered plaintiff to pay child support and granted plaintiff the federal and state income tax exemptions for the children. In March, 1988, defendant filed a motion to increase child support payments and to transfer the tax exemptions for the children from plaintiff to defendant. Following stipulations and a hearing, the trial court, Michael D. Schwartz, J., entered an order transferring the tax exemption for the younger child from noncustodial plaintiff to custodial defendant, but leaving unchanged the right of plaintiff to claim the tax exemption for the older child. Plaintiff appealed, arguing that the trial court lacked the authority to modify the provision of the judgment of divorce relating to federal and state tax exemptions.
The Court of Appeals held:
One of the provisions of the 1984 amendment of the Internal Revenue Code clearly empowers a state court to modify a pre1985 divorce judgment provision which awarded to the noncustodial parent the right to claim the federal income tax exemption for a child to provide that such right to claim the exemption shall be in the custodial parent. Because there is that specific provision in the Internal Revenue Code, it is unnecessary to address the broader question of whether state courts retain the authority to make or modify an award respecting the claiming of federal income tax exemptions under other circumstances.
Affirmed.
Sawyer, J., concurred. While he agreed with the result reached by the majority, he would reach that result on the basis that state courts continue to have the authority to award federal income tax dependency exemptions.
References
Am Jur 2d, Divorce and Separation §§ 1078, 1084.
See the Index to Annotations under Custody and Support of Children; Income Tax.
Divorce — Child Support — Income Tax — Dependency Exemptions — Circuit Courts.
A Michigan circuit court has the power to modify a divorce judgment entered prior to January 1,1985, which provided that the noncustodial parent would be able to claim the state and federal income tax dependency exemption for each child to provide that such exemption shall be taken by the custodial parent.
John J. Grech & Associates, P.C. (by Kenneth A. Skuzenski), for plaintiff.
Jerry W. Drowns, for defendant.
Before: Griffin, P.J., and Gillis and Sawyer, JJ.

Opinion:
Griffin, P.J.
Plaintiff appeals as of right from an order modifying an April 9, 1984, judgment of divorce. The 1984 divorce judgment had granted plaintiff, the noncustodial parent, the federal and state income tax exemptions for the parties' two minor children.
In March of 1988, defendant, the custodial parent, filed a motion for an increase in child support which also requested transfer of the income tax exemptions from plaintiff to defendant. Following a stipulation by the parties as to child support and child care expense levels, the lower court ordered a hearing as to the request for modification of the tax exemptions. Following the hearing, the lower court entered an order which transferred the tax exemptions for the youngest child from the noncustodial plaintiff to the custodial defendant. The tax exemptions as to the oldest child in favor of the plaintiff remained unchanged.
Plaintiff appeals arguing that federal and state law divest the circuit court of authority to so modify a pre-1985 divorce judgment. We disagree.
The divorce judgment in the instant case qualifies as a "qualified pre-1985 instrument" under § 152(e) of the Internal Revenue Code [26 USC 152(e)]:
(B) Qualified pre-1985 instrument. For purposes of this paragraph, the term "qualified pre-1985 instrument" means any decree of divorce or separate maintenance or written agreement
(i) which is executed before January 1, 1985,
(ii) which on such date contains the provision described in subparagraph (A)(i), and
(iii) which is not modified on or after such date in a modification which expressly provides that this paragraph shall not apply to such decree or agreement.
The present divorce decree was entered before January 1, 1985, and provides that the noncustodial parent (plaintiff) shall be entitled to federal and state tax exemptions for the parties' children. It is undisputed that the noncustodial parent (plaintiff) provided at least $600 for the support of each child during the calendar year.
The tax provision at issue requires a pre-1985 divorce judgment to have specifically awarded the dependency exemptions and recognizes only subsequent modifications which are consistent with the act. We construe the operative language to hold that a noncustodial parent may lose his or her exemption under a "qualified pre-1985 instrument" through subsequent modification, but that the noncustodial parent cannot gain an exemption by attempting to transform a nonqualified divorce judgment into a "qualified pre-1985 instrument." As stated in Baron, Modification of Divorce Decrees by Virtue of the 1984 Tax Amendments Relating to Dependency Exemptions, 8 U Ark Little Rock LJ 683, 686-687 (1985):
The new tax provisions make clear that a "qualified pre-1985 instrument" must have specifically provided for the allocation of the dependency exemption as of January 1, 1985, recognizing only subsequent modifications which may serve to remove a pre-1985 instrument from the status of being qualified. In other words, a noncustodial parent may lose his exemption under a "qualified pre-1985 instrument" (if he or she had one) through modifications but the noncustodial parent cannot gain an exemption by attempting to convert an existing nonqualified instrument into a "qualified pre-1985 instrument" through modification.
In the instant case, a "qualified pre-1985 instrument" was modified to transfer tax exemptions from a noncustodial parent to a custodial parent. For the reasons stated, we hold that such a modification is not proscribed by either the Internal Revenue Code or state law.
Finally, at this time we choose not to revisit our holdings in Stickradt v Stickradt, 156 Mich App 141; 401 NW2d 256 (1986), Lorenz v Lorenz, 166 Mich App 58; 419 NW2d 770 (1988), and Varga v Varga, 173 Mich App 411; 434 NW2d 152 (1988), as such decisions are clearly distinguishable.
Affirmed.
Gillis, J., concurred.