Court Opinion

ID: 8214152
Source: CourtListenerOpinion
Date Created: 2022-10-14 14:04:54.08062+00
Date Added: 2024-06-11T16:42:27.816930
License: Public Domain

RENDERED: OCTOBER 7, 2022; 10:00 A.M.
                       NOT TO BE PUBLISHED

                Commonwealth of Kentucky
                          Court of Appeals

                             NO. 2021-CA-0862-MR

ASHLEY MARIE LUNA                                                   APPELLANT

               APPEAL FROM CALLOWAY CIRCUIT COURT
v.             HONORABLE STEPHANIE J. PERLOW, JUDGE
                       ACTION NO. 20-CI-00267

LUCIO MANUEL LUNA-
CERVANTES                                                             APPELLEE

                               OPINION
                       VACATING AND REMANDING

                                 ** ** ** ** **

BEFORE: CALDWELL, TAYLOR, AND L. THOMPSON, JUDGES.

CALDWELL, JUDGE: Ashley Marie Luna (hereinafter “mother”) appeals from

the Calloway Family Court’s denial of her motion for reconsideration of the

allocation of the tax exemption for the minor child she shares with Lucio Manuel

Luna-Cervantes (hereinafter “father”). We vacate and remand.
                                          FACTS

                 The Calloway Family Court entered a decree of dissolution of

marriage granting the mother the primary physical custody of the minor child of

the parties. The father, who had not seen the child for approximately six months at

the time of the entry of dissolution, was granted visitation. Additionally, the

mother was granted the ability to claim the tax exemption for the child on her taxes

in even years, the father in odd years.

                 Following the entry of the dissolution order, the mother moved for

modification, arguing that the court abused its discretion in granting the father the

ability to claim the child on his taxes in odd years as she was granted physical

custody of the child and the IRS1 Code provides the custodian of the child shall

have the right to claim the child. The trial court denied her motion, and she

appeals. We vacate and remand this matter back to the trial court. The trial court

shall conduct an evidentiary hearing and make written findings of fact and

conclusions of law regarding the issue of which parent shall claim tax exemption

for the minor child and how that benefits the minor child.

                                STANDARD OF REVIEW

                 We review the decision of a family court in assigning a child tax

exemption for an abuse of discretion. “Discretion, even in determining equity, or

1
    Internal Revenue Service.

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best interests, must have a reasonable and meaningful basis if we are not to

undermine the integrity of judicial decisions and thereby erode public faith in the

judiciary.” Adams-Smyrichinsky v. Smyrichinsky, 467 S.W.3d 767, 784 (Ky.

2015).

                                     ANALYSIS

             The sole issue for our review in this matter is the family court’s denial

of the mother’s motion for a modification of that portion of the court’s order which

granted the father the right to claim the child on his taxes in odd years, despite the

fact that the mother was granted primary physical custody.

             We note that the father failed to file a brief in this matter. Kentucky

Rule of Civil Procedure (“CR”) 76.12(8)(c) provides the following remedies to the

Court when a party fails to file a brief: “(i) accept the appellant’s statement of the

facts and issues as correct; (ii) reverse the judgment if appellant’s brief reasonably

appears to sustain such action; or (iii) regard the appellee’s failure as a confession

of error and reverse the judgment without considering the merits of the case.”

First, we note that we are not compelled to select one of these options but may do

so. “The decision as to how to proceed in imposing such penalties is a matter

committed to our discretion.” Roberts v. Bucci, 218 S.W.3d 395, 396 (Ky. App.

2007). We will accept the mother’s statement of facts as correct, as supported by

the findings of the family court and the record on appeal. “Where those facts

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conflict with findings of fact by the trial court, however, we may accept them only

where we can say that the trial court’s findings are clearly erroneous.” Whicker v.

Whicker, 711 S.W.2d 857, 858 (Ky. App. 1986).

              Typically, and under the Internal Revenue Code,2 it is the parent with

primary physical custody of the child who is considered the custodial parent and

has the right to the exemption. Of course, the parties can agree to a modification

of this scheme, but a court must take caution when granting a noncustodial parent

the right to the exemption.

              In Adams-Smyrichinsky v. Smyrichinsky, 467 S.W.3d
              767, 783 (Ky. 2015), our Supreme Court cautioned that
              the allocation of a federal tax exemption is not a matter
              solely within the discretion of the trial court but is subject
              to Internal Revenue Code and accompanying regulations.
              Id. at 781-82. Consequently, a trial court must do more
              than simply look to which parent has the highest income,
              or divide the exemptions, or direct the parties to take the
              exemption in alternate years. Id. at 784.

                   Nevertheless, the Court also recognized that
              Kentucky courts retain the discretion to allocate the tax

2
              See 26 [United States Code (U.S.C.)] § 152(e) (assigning
              exemption to “custodial” parent); 26 [Code of Federal Regulations
              (C.F.R.)] § 1.152-4 (“The custodial parent is the parent with whom
              the child resides for the greater number of nights during the
              calendar year, and the noncustodial parent is the parent who is not
              the custodial parent.”). Those provisions, however, allow the
              “noncustodial” parent to receive the exemption if the “custodial
              parent” signs a written waiver declining to claim the exemption.
              26 U.S.C. § 152(e)(2).

Adams-Smyrichinsky, 467 S.W.3d at 781-82 (footnote omitted).

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             exemption based upon a finding that it would be in the
             best interest of the child. Id. at 783. So long as a trial
             court can articulate a sound reason why awarding the
             exemption to the noncustodial parent actually benefits the
             child, an appellate court generally will not disturb the
             trial court’s discretion. Id. at 783-84. In this case, the
             DRC [Domestic Relations Commissioner] noted that the
             Internal Revenue Code and regulations generally assign
             the exemption to the parent with whom the child resides
             for the greater number of nights in the calendar year.
             Citing 26 U.S.C. § 152(e)(4)(A); 26 C.F.R. § 1.152-4.
             But as the DRC noted, these rules are not inflexible.

Keith v. Keith, 556 S.W.3d 10, 16 (Ky. App. 2018) (footnotes omitted).

             In the present case, the family court cited no reason for so allocating.

                    It should be clear that assigning a federal tax
             exemption to a party who is not entitled to it under the
             Internal Revenue Code, or even when the court does not
             know who is entitled, cannot be taken lightly, if for no
             other reason than that the Supremacy Clause applies, and
             courts in good faith should recognize this. Indeed, this is
             why a minority of jurisdictions have held that the
             exemption cannot be allocated by a court.
Adams-Smyrichinsky, 467 S.W.3d at 783. The sole reason provided in the order

for granting the father the exemption in odd-numbered years was the fact that the

child would be spending visitation periods with the father. Such is simply

insufficient to conclude that the child would benefit from the grant of the

exemption to the father, particularly when the father is not in the country for long

periods of time so as to enjoy visitation with the child. On remand, the family

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court should be guided by our holding in Keith, supra, and articulate a reason for

why awarding the exemption to the father actually benefits the child.

                                  CONCLUSION

             We vacate the order of the family court denying the mother’s motion

for modification of that portion of the order relating to the child tax exemption and

remand this matter for proceedings consistent with this Opinion. In any

forthcoming order, the family court should provide facts sufficient to support its

justification for not granting the custodial parent the tax exemption on an annual

basis.

             ALL CONCUR.

 BRIEF FOR APPELLANT:                      NO BRIEF FILED FOR APPELLEE.

 Allison S. Whitledge
 Rebecca P. Biehslich
 Fulton, Kentucky

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