Court Opinion

ID: 3187459
Source: CourtListenerOpinion
Date Created: 2016-03-22 00:19:31.702276+00
Date Added: 2024-06-11T14:35:51.949298
License: Public Domain

J.S23044/16

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

VICTORIA L. BERKOWITZ N/K/A                 :     IN THE SUPERIOR COURT OF
VICTORIA S. HOLLISTER,                      :          PENNSYLVANIA
                                            :
                          Appellant         :
                    v.                      :
                                            :
JUDAH S. BERKOWITZ,                         :
                                            :     No. 2777 EDA 2015

                Appeal from the Order Entered August 13, 2015
      in the Court of Common Pleas of Chester County Domestic Relations
                            at No(s): 2005-06278

BEFORE: PANELLA, OTT, and FITZGERALD,* JJ.

MEMORANDUM BY FITZGERALD, J.:                        FILED MARCH 21, 2016.

        Appellant, Victoria L. Berkowitz, n/k/a Victoria S. Hollister (“Wife”),

appeals from the order entered in the Chester County Court of Common

Pleas denying her Petition for Special Relief for Enforcement of Marriage

Settlement Agreement.1 Wife challenges the trial court’s determination that

the exemption for the parties’ child, Emily, became unavailable for use by

the parties when Emily claimed herself as a dependent in her 2014 tax

return. We reverse and remand.

        We glean the undisputed facts from the record.         Appellee, Judah S.

Berkowitz (“Husband”), and Wife were married on April 18, 1986. R.R. at

*
    Former Justice specially assigned to the Superior Court.
1
  The trial court, in the August 13th order, refers to the petition as a petition
for the enforcement of the property settlement agreement (“PSA”). For
consistency, we refer to it as the PSA.
J.S23044/16

28a.2 Husband and Wife entered into a PSA on July 16, 2007. Id. at 29a-

37a.     The PSA was set forth in the Report and Recommendation of the

Master. Id. at 27a-38a. The PSA provided, in pertinent part, as follows:

              18. Starting in tax year 2007, Wife shall be entitled
              to claim Emily[3] and Ann[4] as dependents for tax
              purposes, and Husband shall be entitled to claim
              Rebecca[5] as a dependent. When there is no longer
              a dependency exemption available for Rebecca, then
              Husband shall be entitled to claim Ann and Wife shall
              be entitled to claim Emily. When Ann can no longer
              be claimed as a dependent for tax purposes, then
              each party shall be entitled to claim Emily in
              alternating years.

Id. at 36a-37a. A divorce decree was entered on September 11, 2007. Id.

at 39a. The decree provided that “[t]he agreement reached by the parties,

the provisions which are set forth at length in the Master’s Report, is

incorporated herein.” Id.

        Wife claimed Ann6 and Emily as dependents in her 2014 U.S.

Individual Income Tax Return. Id. at 49a. Wife’s return was rejected by the

IRS for the following reason:

2
    For convenience, we refer to the reproduced record where applicable.
3
 Emily was born on June 8, 1993. In 2014, she was a senior in college. Id.
at 48a.
4
    Ann was born on April 21, 1992. Id.
5
  Rebecca was born on May 16, 1991. Id.
6
  We note that in her income tax return, Wife spells Ann with an “e” unlike
the spelling of the dependent’s name in the PSA.

                                      -2-
J.S23044/16

         Your dependent’s social Security number (SSN) cannot be
         used to claim an exemption on two separate tax returns.
         You claimed a dependent as an exemption on your tax
         return, but this dependent has also filed their own tax
         return claiming a person exemption.

Id. at 51a.      On April 6, 2015, Husband wrote to Wife stating: “When I

prepared Emily’s 2014 taxes for her this year I checked off the box that no

one was claiming her as a dependent.” Id. at 53a.

      On June 15, 2015, Wife filed a petition to enforce the PSA. Id. at 1a-

3a. In the petition, Wife averred, in pertinent part, as follows:

            [Wife] was entitled to a federal income tax refund of
         $2,203.00 when Emily was claimed as a dependent
         exemption. . . .

             Due to [Husband’s] willful and deliberate refusal to
         abide by the terms of the [PSA, Wife] was required to re-
         file her federal and state income tax returns. As a result,
         [Wife’s] federal income tax refund was reduced to
         $1,273.00, a difference of $930.00. . . .

Id. at 3a. Wife requested the court to order Husband to pay her the sum of

$930.00.   Id.    On August 13, 2015, following a hearing, the trial court

denied Wife’s request for relief.     Id. at 66a.     Wife filed a motion for

reconsideration and notice of appeal on September 4, 2015. The trial court

denied the motion for reconsideration on September 8, 2015.

      Appellant raises the following issues for our review:7

7
  We note that the trial court found Appellant waived the issues raised on
appeal for failure to file a Pa.R.A.P. 1925(b) statement of errors complained
of on appeal. See R.R. at 77a-78a. This court has held:

                                     -3-
J.S23044/16

        1. Did the trial court err as a matter of law or abuse its
        discretion in failing to enforce the parties’ PSA with respect
        to the income tax dependency exemption for the parties’
        child to reflect the agreement of the parties as contained in
        the PSA?

        2. Did the trial court err or abuse its discretion by
        concluding that [Husband] did not violate the terms of the
        PSA with regard to the allocation of income tax
        dependency exemptions when the evidence, including
        Husband’s own admission, showed that Husband alone was

           Before addressing the merits of [the a]ppellant’s claims,
        we need to decide whether they are preserved for
        appellate review as required by the Pennsylvania Supreme
        Court in Commonwealth v. Lord, [ ] 719 A.2d 306 ([Pa.]
        1998), which held an [a]ppellant must comply whenever
        the trial court orders the filing of a statement of matters
        complained of on appeal pursuant to Pa.R.A.P.1925: “Any
        issues not raised in a 1925(b) statement will be deemed
        waived.” Id. [ ] at 309.

           However, there are caveats to a finding of waiver.
        First, the trial court must issue a Rule 1925(b) order
        directing an [a]ppellant to file a response within fourteen
        days of the order. Second, the Rule 1925(b) order must
        be filed with the prothonotary. Third, the prothonotary
        must docket the Rule 1925(b) order and record in
        the docket the date it was made.               Fourth, the
        prothonotary shall give written notice of the entry of the
        order to each party’s attorney of record, and it shall be
        recorded in the docket the giving of notice. See Pa.R.C.P.
        236. If any of the procedural steps set forth above are
        not complied with, [an a]ppellant’s failure to act in
        accordance with Rule 1925(b) will not result in a waiver of
        the issues sought to be reviewed on appeal.             See
        Commonwealth v. Hess, [ ] 810 A.2d 1249, 1252 ([Pa.]
        2002).

Forest Highlands Cmty. Ass'n v. Hammer, 879 A.2d 223, 226-27 (Pa.
Super. 2005) (emphases added). In the case sub judice, there was no Rule
1925(b) order on the docket. Therefore, we decline to find waiver. See id.

                                    -4-
J.S23044/16

         responsible for preparing and filing daughter Emily’s tax
         return in direct violation of the express language of
         paragraph 18 of the parties’ [PSA]?

         3. Did the trial court err or abuse its discretion in ignoring
         the IRS definition of dependent, the conclusion of the IRS
         audit of [Wife’s] 2012 Federal income tax return
         confirming Wife’s claim of dependency exemptions, and
         the evidence that the children met the same definition of
         dependent in 2014 as they did in 2012?

         4. Did the trial court err or abuse its discretion in ignoring
         the Internal Revenue Code section which requires an
         individual who qualifies as a dependent of another person
         to not claim him or herself as a personal exemption as the
         exemption belongs to the person on whom the individual is
         dependent? 26 U.S.C. § 151.

Wife’s Brief at 4-5.   We address Wife’s issues together because they are

interrelated.8

8
   In issue three, Wife refers to correspondence from the IRS which stated,
in pertinent part, as follows:

         Thank you for your correspondence received dated March
         20, 2014.        We have evaluated all the submitted
         information and have concluded that you and all three
         dependents are related. According to the court decree,
         starting in the tax year 2007, [Wife] is allowed to claim
         both dependents namely Emily [ ] and Ann[ ] and
         [Husband] is allowed to claim one dependent namely
         Rebecca [ ]. When there is no longer a dependency
         exemption available for Rebecca, then [H]usband shall be
         entitled to claim Ann[ ] and [W]ife shall be entitled to
         claim Emily. When Ann[ ] can no longer be claimed as
         dependent for tax purposes, then each party shall be
         entitled to claim Emily in alternating years.

         Under these orders, [Wife] is allowed to claim both
         dependents Emily and Ann[ ] in 2012. . . .

                                     -5-
J.S23044/16

      Our review is governed by the following principles:

         The law in Pennsylvania with regard to property settlement
         agreements is well-settled.       Generally, courts in this
         Commonwealth possess the broad authority to enforce the
         terms of a parties’ property settlement agreement. . . .

         In Pennsylvania, we enforce property settlement
         agreements between husband and wife in accordance with
         the same rules applying to contract interpretation.

Cioffi v. Cioffi, 885 A.2d 45, 48 (Pa. Super. 2005) (citations and formatting

omitted). “Because contract interpretation is a question of law, this Court is

not bound by the trial court’s interpretation.     Our standard of review over

questions of law is de novo and to the extent necessary, the scope of our

review is plenary . . . .”9 Stamerro v. Stamerro, 889 A.2d 1251, 1257 (Pa.

Super. 2005) (quotation marks and citations omitted).

      The term dependent is statutorily defined as follows:

         (a) In general.─ For purposes of this subtitle, the term
         “dependent” means─

            (1) a qualifying child . . .

                                   *       *   *

         (c) Qualifying child.─For purposes of this section─

            (1) In general.─The term “qualifying child” means,
            with respect to any taxpayer for any taxable year, an
            individual—

R.R. at 65a.
9
  Given our scope and standard of review, the absence of a Pa.R.A.P.
1925(a) opinion is not consequential. Furthermore, we have the trial court’s
rationale in the August 13th order and opinion. See R.R. at 66a-67a.

                                       -6-
J.S23044/16

              (A) who bears a relationship           to   the   taxpayer
              described in paragraph (2) . . .

                                 *    *    *

            (2) Relationship.─For purposes of paragraph (1)(A),
            an individual bears a relationship to the taxpayer
            described in this paragraph if such individual is─

              (A) a child of the taxpayer or a descendant of such a
              child . . .

            (3) Age requirements.─

              (A) In general.─For purposes of paragraph (1)(C),
              an individual meets the requirements of this
              paragraph if such individual is younger than the
              taxpayer claiming such individual as a qualifying child
              and—

                                 *    *    *

                  (ii) is a student who has not attained the age of
                  24 as of the close of such calendar year.

                                 *    *    *

         (f) Other definitions and rules.─For purposes of this
         section—

                                 *    *    *

            (2) Student defined.─The term “student” means an
            individual who during each of 5 calendar months during
            the calendar year in which the taxable year of the
            taxpayer begins─

              (A) is a full-time      student   at    an    educational
              organization . . . .

26 U.S.C. § 152(a), (c), (f).

                                     -7-
J.S23044/16

      The Code provides that where a deduction is allowable to another

taxpayer, a personal exemption is disallowed.

         (2) Exemption amount disallowed in case of certain
         dependents.─ In the case of an individual with respect to
         whom a deduction under this section is allowable to
         another taxpayer for a taxable year beginning in the
         calendar year in which the individual's taxable year begins,
         the exemption amount applicable to such individual for
         such individual’s taxable year shall be zero.

Id. § 151(d)(2) (emphasis added).

      In Miller v. Miller, 744 A.2d 778 (Pa. Super. 1999), this Court

addressed the legislative history of Section 152.

         In recommending the changes to § 152(e), the House
         Ways and Means Committee stated:

            The present rules governing the allocations of the
            dependency exemption are often subjective and
            present    difficult   problems     of    proof  and
            substantiation.      The Internal Revenue Service
            becomes involved in many disputes between parents
            who both claim the dependency exemption based on
            providing support over applicable thresholds. The
            cost to the parties and the Government to resolve
            these disputes is relatively high and the Government
            generally has little tax revenue at stake in the
            outcome. The committee wishes to provide more
            certainty by allowing the custodial parent the
            exemption unless that spouse waives his or her right
            to claim the exemption.          Thus, dependency
            disputes between parents will be resolved
            without the involvement of the Internal
            Revenue Service.

         H.R.Rep. No. 432, 98 th Cong., 2d Sess., pt. 3, at 1498-99
         (reprinted in 1984 U.S.Code Cong. & Admin. News 697,
         1140). It is clear from this legislative history that the
         “purpose [of the amendments] was to alleviate the
         administrative burden which had been placed on the

                                     -8-
J.S23044/16

        Internal Revenue Service (I.R.S.) due to the necessity for
        it to become involved in making determinations as to
        which parent provided the larger portion of a child’s
        support if the parties disagreed and both sought to claim
        the exemption.” This legislative history does not suggest
        that the changes were made to preclude state courts from
        exercising their authority regarding the exemption.
        Instead, “this silence demonstrates Congress’ surpassing
        indifference to how the exemption is allocated so long as
        the IRS doesn't have to do the allocating.”

Id. at 784-85 (citations omitted and emphasis added).

     In the case sub judice, the trial court opined:

        [Wife and Husband] entered into a PSA in September
        2007.   The PSA allows the parties to share the IRS
        dependency exemption (“exemption”) for their three
        daughters. . . .

                                 *    *    *

           [Wife] argues that she has the right to claim an
        exemption for two daughters, Ann and Emily, on her 2014
        Tax Return. [Husband] did not object to this claim to the
        extent that the exemptions remain “available” in 2014.

           The evidence presented to the [c]ourt shows that Emily,
        a 21 year old in 2014, claimed herself as a dependent
        in her 2014 Tax Return. As a result, her exemption
        became unavailable for use by the parties.

                                 *    *    *

        . . . The simple fact is that Emily, acting upon her
        own right to claim herself as a dependent on her tax
        returns has made her exemption unavailable to her
        parents . . . . Consequently, . . . Husband is not in
        breach of the PSA and deny Wife’s request for relief.

R.R. at 66a-67a (citations omitted and some emphases added).

                                     -9-
J.S23044/16

       We find that the trial court erred in finding that Emily claimed herself

as a dependent.       See id.    On the contrary, she claimed a personal

exemption. See id. at 51a. Emily qualified as a dependent child. See 26

U.S.C. § 152(a), (c), (f). As a dependent child, Emily was not permitted to

claim a personal exemption. See id. § 151(d)(2).          It is undisputed that

Husband prepared Emily’s tax return and “checked off the box that no one

was claiming her as a dependent,” in derogation of the PSA.        See R.R. at

53a.

       Pursuant to the PSA, Wife was entitled to claim Emily as a dependent

for the income tax dependency exemption. See Cioffi, 885 A.2d at 48; R.R.

at 36a-37a.    We find the trial court erred in finding that “Emily, acting upon

her own right to claim herself as a dependent on her tax returns has made

her exemption unavailable to her parents.”      See R.R. at 67a; 26 U.S.C. §

151(d)(2); 26 U.S.C. § 152(a), (c), (f).      It is beyond cavil that husband

prepared Emily’s tax return erroneously.        See 26 U.S.C. § 151(d)(2).

Therefore, we reverse and remand to the trial court to enter an order

consistent with this memorandum. See Miller, 744 A.2d at 784-85.

       Order reversed. Case remanded. Jurisdiction relinquished.

                                     - 10 -
J.S23044/16

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 3/21/2016

                          - 11 -