Court Opinion

ID: 9574603
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:06:23.209267+00
Date Added: 2024-06-11T12:44:18.652359
License: Public Domain

Fletcher, Justice,
dissenting.
Prior to its 1984 amendment, Internal Revenue Code (IRC) § 152 (e) created a general rule giving the custodial parent the right to claim the parties’ children as tax exemptions, with two exceptions. 26 USC § 152 (e). Under the first exception, a non-custodial parent providing at least $600 per year per child in support payments could claim the exemption if the non-custodial parent was awarded the exemption under the parties’ divorce decree or under a written agreement. Under the second exception, a non-custodial parent providing at least $1,200 per year per child in support payments could claim the exemption if the custodial parent did “not clearly establish that he provided more for the support of such child during the calendar year than the parent not having custody.” IRC § 152 (e) (2) (B) (i) and (ii) (1982). Davis v. Fair, 707 SW2d 711, 712-713, 714 (Tex.Ct.App. 1986).
The pre-1984 law resulted in the IRS becoming the unwilling mediator of factual disputes between divorcing parents over the issue of who actually provided more support for the child. Administrative costs incurred in resolving such disputes were relatively high, with the government generally having little tax revenue at stake; consequently, *16IRC § 152 (e) was amended in 1984. Cross v. Cross, 363 SE2d 449, 457 (W.Va. 1988); Nichols v. Tedder, 547 S2d 766, 771 (Miss. 1989).
With certain exceptions not applicable here, the 1984 amendment gives the custodial parent the right to claim the children as dependents, unless the custodial parent signs a written waiver of the dependency exemption. The waiver may be made yearly, in one written instrument covering a period of years, or in perpetuity. In addition, the custodial parent’s written waiver must be attached to the non-custodial parent’s federal income tax return in order to entitle the noncustodial parent to the exemption. IRC § 152 (e) (2) (A) and (B) (1984).
Since the 1984 amendment, 19 of the 27 states that have addressed the question presented here have definitively recognized that state trial courts have the authority to allocate the exemption. One other state has reached the same basic result, while only seven states, in reliance upon the doctrine of federal preemption, have held to the contrary.
The 1984 amendment, unlike the pre-1984 law, does not make express provision for an award of the dependency exemption by court decree. However, the undisputed purpose of the 1984 amendment demonstrates that Congress is indifferent to the question of which parent claims the exemption so long as the IRS does not have to expend its resources in making the decision.
What the new Code section sought to achieve was certainty in the allocation of the dependency exemption for federal tax administration purposes. By placing the dependency exemption in the custodial parent unless a waiver is executed, the new statute relieves the Internal Revenue Service of litigation. The new statute is entirely silent concerning whether a. domestic court can require a custodial parent to execute a waiver, and this silence demonstrates Congress’s surpassing indifference to how the exemption is allocated as long as the IRS doesn’t have to do the allocating.
(Emphasis in original.) Cross, 363 SE2d at 457. Thus, a state court’s allocation of the dependency exemption to a non-custodial parent does not conflict with any federal tax policy and has not been preempted by any federal tax law. Consequently, neither the Internal Revenue Code nor general principles of federal law, see Cross, 363 SE2d at 458-459, n. 19, prohibit a state court’s award of the exemption.
[W]hat the Davis court missed is that there is no prohibition — express or implied — on a state court’s requiring the *17execution of the waiver, and because state court allocation of dependency exemptions has been custom and usage for decades, it is more reasonable than not to infer that if Congress had intended to forbid state courts from allocating the exemption by requiring the waiver to be signed, Congress would have said so.
Decided March 15, 1991.
Surrett, Walker, Creson & Colley, Carl J. Surrett, for appellant.
Fleming, Blanchard & Bonner, M. Kay Jackson, for appellee.
Dye, Miller, Tucker & Everitt, John B. Long, Benjamin H. *18Brewton, amicus curiae.
*17(Emphasis in original.) Id. at 458.
Because Congress is wholly indifferent to how the exemption is allocated, I would hold that superior courts in Georgia, which act as courts of equity, do have the discretion to allocate the dependency exemption and do have the authority to order the custodial parent to execute a waiver of that exemption in order to enforce the allocation.
A court does not have the authority to grant a taxpayer an exemption or deduction; such is a matter solely for determination by the legislative branch. However, in the situation presented here, the court would not be granting an exemption; the exemption was granted by Congress. The court would merely be allocating that exemption between the custodial and non-custodial parents as a part of the court’s determination of the obligations of the parties to the divorce action.
Contrary to the conclusion of the majority, permitting state courts to exercise their discretion regarding allocation of the dependency exemption is not an imposition of a tax by the courts and does not subject the custodial parent’s income to unauthorized tax liability. We would merely be recognizing that state courts have the same discretion they had prior to the 1984 amendment: the discretion to allocate the dependency exemption. Allocation of that exemption is not the imposition of a tax.
I would also note that the majority’s holding will not simplify the trial of divorce actions where child support is an issue because the adverse impact upon the non-custodial parent’s ability to pay child support, resulting from the dependency exemption remaining with the custodial parent, will, in all likelihood, give rise to a claim for the downward modification of child support.
For the foregoing reasons, I dissent. I .am authorized to state that Justice Bell and Justice Hunt join in this dissent.