Court Opinion

ID: 9685717
Source: CourtListenerOpinion
Date Created: 2023-08-24 14:58:13.804344+00
Date Added: 2024-06-11T09:10:51.839880
License: Public Domain

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 *645law 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 *646Relating 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.